The question loomed for years: Was Deloitte & Touche LLP liable for allegedly faulty audits of Florida’s Poe Financial Group, whose three property insurance subsidiaries went insolvent after a slew of hurricanes in 2004 and 2005?

A jury decided the answer is a resounding “no.”

As the Wall Street Journal reported on May 8, a jury verdict in Leon Country Circuit Court in Tallahassee Fla. Ruled that Deloitte wasn’t liable, and that the Florida Department of Financial Services did not prove its case.

The verdict, reached after more than a day of deliberations, saved Deloitte from facing a liability of up to $850 million in damages. After the onslaught of hurricanes and Poe Financial Group’s insolvency, regulators ultimately took control and established a state fund to pay out policyholder claims. The finally tally, according to the Wall Street Journal: about $1 billion. Regulators accused Deloitte of improperly determining that Poe was financially healthy despite its post-hurricane insolvency.

“We are gratified that the jury confirmed this 2005 insolvency was caused by an unprecedented series of eight hurricanes in 15 months, not by any accounting issue, Deloitte said in a statement released after the verdict and shared with Carrier Management.

The firm added that it was “committed to conducting audits of the highest quality.”

Ashley Carr, spokesperson for the Florida Department of Financial Services, said in a statement forwarded to Carrier Management that the verdict means “it is the people of Florida who lost today.”

“The insolvency of the Poe Insurance Companies represents the largest insurance insolvency in Florida’s History,” Carr said. “It was the Department’s belief that Deloitte & Touche was at fault in this matter and ultimately cost Florida’s taxpayers hundreds of millions of dollars. However, the jury carefully weighted the evidence and reached an alternative conclusion.”

Topics Florida Carriers Hurricane