Applied Underwriters says a San Mateo Superior Court judge’s proposed statement of decision and tentative order is based in part on “legal error” and would adopt a rehabilitation plan that is “punitive.” The filing includes six pages of general objections to the judge’s proposed order to adopt the California Department of Insurance’s rehabilitation plan for California Insurance Company, as well as thirty-one specific objections.
The carrier maintains that section 2.2 of the plan should be rejected. The section provides for an auction process to find an independent reinsurer to take over CIC’s California book of business. Absent an independent buyer, the plan would require the use of an independent third-party administrator if the policies are transferred to a CIC affiliate such as Continental Indemnity Company.
“The forced sale of CIC’s assets is not a fair market transaction because it is not between a willing buyer and a willing seller, the most basic precept of a fair market sale,” the carrier maintains in its filing. It calls the auction a “punitive liquidation of a going concern.”
The filing also outlines CIC’s opposition to Section 2.6 of the rehabilitation plan that includes the settlement provisions for the pending policyholder litigation over the reinsurance participation agreement. “The Proposed Order’s justification for Section 2.6 also is a mistaken matter of law,” says CIC. “The Plan rests on unproven allegations made by plaintiff-policyholder lawyers in ongoing litigations against CIC who have no personal knowledge of the facts they allege,” says CIC.
The carrier also challenges the court’s conclusion that CIC’s counsel misrepresented the contents of a document to indicate that it supported his position. In the filing, CIC maintains that the characterization its attorney mispresented anything “is wrong and the record must be removed and corrected.”
Copies of CIC’s general and specific objections to Judge Susan Greenberg’s Proposed Statement of Decision and Tentative Order After Hearing are available in our Resources section or by clicking here.