Old Republic International Corp. (ORI) reported that a previously disclosed third quarter 2009 revenue recognition accounting issue has now been resolved. Premiums received in excess of reinsurance-related receivables previously recorded must be recognized as a gain. In effect, Old Republic recognizes income of $82.5 million currently as a result of the commutations, and will recognize the losses that it is now exposed to because of the termination of the reinsurance in future periods' results when related claim costs are incurred.
The restatement results in an increase of previously reported consolidated premium income of $82.5 million, and a decrease of the reported post-tax loss by $53.6 million or $0.23 per share for both the third quarter and first nine months of 2009. As a further result, the common shareholders' equity account will also be increased by $53.6 million or $0.23 per share as of September 30, 2009.
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