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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-2
Current Report
Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934
Date of Report: February 26, 1997
INTERCARGO CORPORATION
(Exact name of registrant as specified in charter)
DELAWARE 0-16748 36-3414667
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1450 American Lane, 20th Floor, Schaumburg, Illinois 60173
(Address of principal executive offices)
Registrant's telephone number, including area code: (847) 517-2990
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Item 4. Changes in Registrant's Certifying Accountant.
On February 26, 1997, the Board of Directors of Intercargo Corporation (the
"Company"), upon the advice of its Audit Committee, elected to not retain KPMG
Peat Marwick LLP ("KPMG") as its certifying accountant for fiscal year 1997.
The decision to change accountants was based upon a cost analysis of services
provided. There were no disagreements between management of the Company and
the former accountants on any matters of accounting principles or practices,
financial statement disclosures, or auditing scopes or procedures during the
Company's two most recent fiscal years and any subsequent interim period
through the date of the dismissal, March 31, 1997. The accountant's reports on
the financial statements of the Company in the 1996 and 1995 fiscal years were
unqualified, not modified as to uncertainty, audit scope or accounting
principles, and did not express any adverse opinion or disclaimer of opinion.
On March 31, 1997 KPMG issued a letter (dated February 21, 1997, the date of
substantial completion of field work) to the Board of Directors describing as a
material weakness in internal control that accounts receivable detail and
intercompany accounts receivable and payable were not properly reconciled on a
regular basis. KPMG also issued a similar letter as part of the 1995 fiscal
year audit. The Company has requested KPMG Peat Marwick LLP to furnish a
letter addressed to the Commission stating whether it agrees with the above
statements. A copy of that letter, dated April 8, 1997 is filed as Exhibit 1
to this Form 8-K/A-2.
In addition, on February 26, 1997, the Audit Committee recommended, and the
Board of Directors approved, the appointment of Ernst & Young LLP as the
Company's new independent accountants, effective for fiscal 1997, but subject
to ratification of the appointment by the stockholders of the Company at the
annual meeting of stockholders currently scheduled to be held on May 16, 1997.
The selection of Ernst & Young LLP was through a request for proposal process
initiated pursuant to a Board of Directors resolution on October 31, 1996, with
no consideration requested or made on the application of accounting principles,
the type of audit opinion that might be rendered on the financial statements,
or any other factor for reaching a decision as to accounting, auditing or
financial reporting issues.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERCARGO CORPORATION
BY: /s/ Michael L. Rybak
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Michael L. Rybak
Chief Financial Officer
and Vice President
Dated: April 8, 1997
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Exhibit 99.1
April 8, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
We have been principal accountants for Intercargo Corporation and, under the
date of February 21, 1997, we reported on the consolidated financial statements
of Intercargo Corporation and subsidiaries as of and for the years ended
December 31, 1996 and 1995. On February 26, 1997, our appointment as principal
accountants was terminated effective upon completion of our audit of Intercargo
Corporation's consolidated financial statements as of and for the year ended
December 31, 1996 and the issuance of our report thereon.
We have read Intercargo Corporation's statements included under Item 4 of its
Form 8-K/A-2 dated April 8, 1997, and we agree with such statements, except
that we are not in a position to agree or disagree with Intercargo
Corporation's statements that the change was recommended by the Audit Committee
and approved by the Board of Directors, the stated reason for the change, and
that Ernst & Young LLP was not engaged regarding the application of accounting
principles or the type of audit opinion that might be rendered or any other
accounting, auditing, or financial reporting issues.
Very truly yours,
KPMG Peat Marwick LLP
