California Insurance Company’s Statement Replying to Reports of Consumer Watchdog Inquiries into California Department of Insurance Transparency and Related Matters

January 19, 2022 -- In response to articles that have appeared concerning the Consumer Watchdog group’s inquiries into issues of the California Department of Insurance’s (CDI) observance of transparency and probity standards, Mr. Jeffrey Silver Esq., Executive Vice President and General Counsel, California Insurance Company, presented the following statement, including factual corrections and observations concerning the CDI’s practices:

“California Insurance Company is neither a party to this inquiry nor a party in the suit that has been the subject of recent articles outlining Consumer Watchdog’s actions to compel the CDI to disclose important, relevant records of meetings and phone calls between Commissioner Ricardo Lara and others in the CDI with lobbyists. California Insurance Company wishes to set the record straight on certain key points, as reference has been made to the Company in the articles about the inquiry.

“First, the CDI’s level of transparency and probity has been the subject of great concern to the enterprises it regulates and to the public it serves. Its well-known regulatory overreaches, its insider dealings and awards and its vindictive fines and actions are long-standing marks of CDI’s lack of accountability. The election of a Commissioner by the voting public, unlike the practice of gubernatorial appointment observed elsewhere, was set to serve that accountability, but electoral politics has invaded the objectivity of the process. One glaring example is in the courts at present: California Insurance Company, our Company, has been unjustly victimized by what is CDI’s hijacking of our ‘A’ rated insurance company into an unlawful, self-serving conservatorship, a status reserved for failing companies. They did so to block our acquisition and our redomiciling to New Mexico while preserving the claim’s legal work for assignment by the CDI to the CDI’s few, favorite attorneys.

“Our Company, like most important insurers in the United States, maintains a governmental affairs division that often engages outside representatives to interface with Insurance Department officials including Commissioners and Deputies, as required. It is a fact of life for highly regulated insurance companies.

“Factually, it appears that our independent lobbyists did interface with the CDI officials to gain their approval of our transactions, a normal function. However, they were not successful, as the CDI unreasonably obstructed the plans that were presented. In fact, any notion, as reported, that CDI official Bryant Henley issued decisions favorable to our Company is totally incorrect. Mr. Henley’s decisions were uniformly consistent with the stance taken by former Commissioner Dave Jones, Commissioner Lara’s predecessor, and were aimed to impede our Company.

“In fact, it was Bryant Henley who executed a Declaration filed with the California Superior Court to have an Order ex parte (that is, without notice to our Company) entered, placing our ‘A’ rated Company into Conservatorship solely based on a regulatory dispute, and not a financial issue. It was high-handed and, we are arguing in court, illegal.

“As part of our opposition to the conservation, new facts are emerging that will be underlined in depositions and ongoing discovery all of which will need to be resolved before the hearing on the proposed Plan of Rehabilitation. We have yet to have our day in court on the Conservatorship imposed upon our Company, but we will.

“Many see the CDI as a Gothic institution with a penchant for secrecy and manipulation to accomplish goals that serve a coterie of insiders in the legal field and even former CDI employees in private service. Their goal is to keep the lid on their actions and sustain a bureaucratic status quo that is, ultimately, of little or no service to the public. We salute Consumer Watchdog for its insistence upon transparency at the CDI.”

For further information contact:
Jeffrey Silver Esq., at +1 (402) 342-4900 x4141 or at jeffreysilver@silver-law.net

About California Insurance Company (www.nacasualty.com)
California Insurance Company® (CIC) holds an AM Best Financial Strength Rating of ‘A’ (Excellent) and a Long-Term Issuer Credit Rating of ‘a’ (Excellent). The rating pertains to CIC and the seven insurance companies collectively referred to as North American Casualty Group (NAC). According to the ratings agency, “the ratings reflect NAC’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.” The companies with the affirmed ratings are: California Insurance Company, Continental Indemnity Company, Illinois Insurance Company and Pennsylvania Insurance Company, domiciled in New Mexico; Texas Insurance Company, domiciled in Texas; Oklahoma Property and Casualty Insurance Company, domiciled in Oklahoma; and Florida Casualty Insurance Company, domiciled in Florida.

About Applied Underwriters
Applied Underwriters® is a global risk services firm that helps businesses and people manage uncertainty through its business services, insurance and reinsurance solutions. As a company, Applied Underwriters has been distinguished by its innovative approaches to client care and by its strong financial strength. Applied Underwriters operates widely throughout the US, UK, EU and Middle East. Its operational headquarters is located in Omaha, Nebraska.