SAN DIEGO & BIRMINGHAM, Ala.--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP announces that a purchaser of ProAssurance Corporation (NYSE: PRA) filed a class action complaint against the Company for alleged violations of the Securities Exchange Act of 1934 between April 26, 2019 and May 7, 2020. ProAssurance is one of the largest medical insurance providers in the U.S.
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ProAssurance Corporation (PRA) Accused of Misleading Shareholders
According to the complaint, ProAssurance’s most important division is its Specialty Property and Casualty segment (“Specialty P&C”), which has accounted for at least 60% of its gross premiums written since 2015. In 2016, ProAssurance underwrote a very large specialty policy for one large healthcare provider customer, assuring investors that its reserves were "adequate" and "appropriate," and reflecting a "conservative view" when established. Despite assurances, on January 22, 2020, ProAssurance revealed that it was estimating a $37 million adverse development in its Specialty P&C loss reserves for fourth quarter 2019 due to a deteriorating loss experience related to the large account underwritten in 2016. Then one month later, ProAssurance revealed that the adverse development from the 2016 underwritten account was actually $51.5 million rather than the initial estimate of $37 million. Finally, on May 8, 2020, ProAssurance disclosed that its large healthcare client would likely not renew its policy and instead would exercise an option for tail coverage that would result in an additional $50 million in losses, for an aggregate of over $100 million in losses on a single account. Following all of these disclosures, ProAssuranc's stock fell nearly 57% from a closing price of $37 per share on January 22, 2020, to close at $15.95 per share on May 8, 2020.
ProAssurance Corporation (PRA) Shareholders Have Options
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