New Mexico Attorney General Hector Balderas is asking another California court for permission to file an amicus brief in the ongoing dispute between the California Department of Insurance and Applied Underwriters’ California Insurance Company. The first request was in a federal court action which was subsequently dismissed and now is in the San Mateo Superior Court that is handling CIC’s conservation proceeding.
The application was filed by the same private firm that handled the federal amicus filing earlier this year (see Commissioner Lara…). Whereas the first filing backed Applied Underwriters’ opposition to the state’s ultimately successful motion to dismiss the federal action, this filing supports CIC’s position papers on the rehabilitation plan. These position papers have yet to be filed with the court and are not due until the end of the month.
The San Mateo Court also agreed to push back the date for the rehabilitation plan hearing. It was scheduled for October 14, 2021, but is now set for November 18, 2021, at the request of both parties. Applied Underwriters’ raised concerns that it would not be finished with discovery in the case in time for the earlier hearing. The hearing has already been delayed numerous times and is now set to be reviewed two years and two weeks after the carrier was put under state conservatorship.
Balderas maintains in the filing that New Mexico has an interest in the case because of the state’s earlier approval of a merger between CIC and the New Mexico corporation known as CIC II. “The uncertainty generated by the conservatorship – including its lengthy and indefinite duration – harms New Mexico’s interest in permitting the consummation of a merger that has been approved by the State’s Superintendent of Insurance,” Balderas maintains in the proposed brief. “Instead, CIC II’s creation remains in limbo, with CIC II unable to establish a business in New Mexico and write policies for the State’s market.”
Applied is operating for all intents and purposes as if the merger had occurred and Berkshire Hathaway- the company from which Applied and CIC were purchased – has not been named in any litigation.
Surprisingly, this is the same argument – literally word for word – that Balderas made in the first filing. New Mexico insurance department officials noted that Balderas made that filing on his own accord and not at the department’s request.
As of this publication’s deadline, the court had not taken any action on the New Mexico AG’s request.