PIE MUTUAL PROFIT
DECLINED LAST YEARCLEVELAND - PIE Mutual Insurance Co., owner of Insurance Corp. of America (ICA) which has been placed in temporary receivership by Texas officials, reported net income of $770,000 in 1996, vs. $1.12 million for 1995.
''All in all, The PIE Mutual had another good year in 1996 and is going forward from a continued position of strength,'' said Larry E. Rogers, president and chief executive of one of the largest medical pro- fessional liabilities in the country.
The company's financial statement reflects a surplus of $65.6 million at the end of 1996, which continues to meet or exceed all statu- tory and regulatory requirements.
Final 1996 results include a onetime charge of $11.2 million related to the investment in Insurance Corp. of America by PIE Financial Corp., a wholly owned subsidiary.
The company reported that it has sued Icaac Inc., the former parent company of ICA, alleging that certain financial information was misrepresented to PIE Financial Corp. before it purchased ICA in February 1996.
The Texas Department of Insurance has placed ICA in receivership, after PIE Financial voluntarily reported ICA's financial situation following an internal year-end review.
Subsequent to the receivership, the company has no further liability for ICA.
''It is unfortunate that this initiative to expand our role as a professional liability insurer and to add to the base and strength of the PIE Mutual did not work out as we had hoped,'' Mr. Rogers said.
''By the fourth quarter of 1996, it became clear that pending ICA losses exceeded prior estimates,'' he said.
''We simply concluded that it would not be prudent to invest more money to rehabilitate ICA.''