New York, New York--(Newsfile Corp. - August 4, 2020) - Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in ProAssurance Corporation ("ProAssurance" or the "Company") (NYSE: PRA) of the August 17, 2020 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you invested in ProAssurance stock or options between April 26, 2019 and May 7, 2020 and would like to discuss your legal rights, click here: www.faruqilaw.com/PRA. There is no cost or obligation to you.
You can also contact us by calling Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to firstname.lastname@example.org.
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Attn: Richard Gonnello, Esq.
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The lawsuit has been filed in the U.S. District Court for the Northern District of Alabama on behalf of all those who purchased ProAssurance common stock between April 26, 2019 and May 7, 2020 (the "Class Period"). The case, Sheet Metal Workers Local 19 Pension Fund v. ProAssurance Corporation et al., No. 2:20-cv-00856 was filed on June 16, 2020, and has been assigned to Magistrate Judge Gray M. Borden.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) ProAssurance lacked adequate underwriting process and risk management controls necessary to set appropriate loss reserves in its Specialty P&C segment; (2) ProAssurance failed to properly assess a large national healthcare account that experienced losses far exceeding the assumptions made when the account was underwritten; and (3) as a result, ProAssurance was subject to materially heightened risk of financial loss and reserve charges.
Specifically, on January 22, 2020, ProAssurance announced that because of a deteriorating loss experience related mainly to one large healthcare account underwritten in 2016, the Company was estimating a $37 million adverse development in its Specialty P&C loss reserves for the fourth quarter of 2019. Additionally, the Company stated that since mid-2019 it had been executing a "comprehensive underwriting strategy in response to emerging trends and changing conditions in healthcare professional liability."
On this news, the Company's stock price fell from $37.58 per share on January 22, 2020 to $33.40 per share on January 23, 2020: a $4.18 or 11.12% drop.
Later, on February 20, 2020, ProAssurance announced its 2019 fourth quarter and full year results. The Company revealed that the adverse development from this one large national healthcare account was actually $51.5 million, much larger than the initial estimate of $37 million only a month prior. The Company discussed that "[i]n the span of twelve months, we restructured the majority of our executive team [and] consolidated our Specialty P&C operations" under new leadership.
Then, on May 8, 2020, ProAssurance announced that the large healthcare client would likely not renew its policy and instead would likely exercise an option for tail coverage that would result in an additional $50 million in losses in the second quarter of 2020. This loss, when combined with the $51.5 adverse development, meant that the Company would suffer over $100 million in losses from a single account.
On this news, the Company's stock price fell from $20.33 per share on May 7, 2020 to $15.95 per share on May 8, 2020: a $4.38 or 21.54% drop.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding ProAssurance's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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