California Insurance Company Will Press for its “Day in Court” to Argue Merits of its Case, after Procedural Technicalities Effectively Offer a “No Win” to Parties

Procedural issues cloy the path to an airing of ‘A’ rated CIC’s case against the California Department of Insurance’s arbitrary, exotic imposition of a conservatorship to block its re-domestication

**Sacramento -- July 8, 2021 -- ** Basing a decision upon procedural and technical grounds, United States District Court Judge, Hon. William B. Shubb, United States District Court, Eastern District of California, granted the motion by the California Department of Insurance (CDI) to dismiss the lawsuit filed by California Insurance Company II against the CDI. In granting the CDI’s motion to dismiss, which furthers the CDI’s effective efforts to circumvent due process, Judge Shubb acted in a manner consistent with his previous decision in the Applied Underwriters, Inc. case. California Insurance Company (CIC) has indicated it will file an appeal to the United States Court of Appeals for the Ninth Circuit as Applied Underwriters did in a prior federal case for an eventual return to argue the merits of its dispute with the CDI. While CIC’s conservation was put into place almost two years ago in an ex parte hearing where CIC was not even present to defend itself, CIC has still not been granted a hearing in court to hear the actual merits of the case including the legitimacy of the conservation. Judge Shubb’s decision again puts off CIC’s “day in court,” whereupon it will argue against CDI’s arbitrary and illegal imposition on ‘A’ rated CIC of a conservatorship, an action exclusively reserved for financially distressed insurers. This decision will forestall temporarily the deposition of CDI staff and the examination of its internal processes and decision making. The court declined in this instance to interfere with an ongoing departmental procedure, leaving aside any arguments as to its unusual misapplication of conservatorship powers or other related issues.

“Point is, this narrow decision was based on technicalities and did not weigh the merits of the case, a prospect that will be enabled when we pursue any of our available actions and appeals in the next round to set the path to a judgment on the actual merits,” stated CIC’s General Counsel, Jeffrey Silver, Esq. He continued, “CIC will raise issues of constitutional law in its effort to terminate the conservatorship imposed by CDI after it agreed with CIC’s planned move to New Mexico, then suddenly reversed its position and used the conservatorship in what is arguably an illegal manner.” Mr. Silver added, noting that CIC has vowed to pursue its constitutional rights to protect the Company, its policyholders and, as a by-product, the integrity of the insurance regulatory environment itself: “We have yet to be heard on the merits of this case, stymied temporarily on procedural matters as put in our path by the CDI, designed to extend the reach of the CDI well beyond its charge and to damage CIC needlessly.”

Mr. Silver explained: “The CDI has used every possible bureaucratic, intricate technical means to block our re-domestication to New Mexico, a move that was approved by New Mexico, Texas, Iowa and California itself, before its inexplicable reversal, a move that many in the media and in the insurance field see as a vendetta against CIC possibly related to some insiders’ unlawful agenda. That’s why we believe that the CDI is fearful of the discovery process that could prove damaging to CDI and to specific individuals employed there. We are not alone in being stymied by the CDI in the discovery process and wonder what it is that they are hiding. Our vow to fight to the finish is spurred by the clear-cut issue of justice itself in this case, as CDI staff insiders ride roughshod over the rights of insurers with no open airing in court. Our next step in what has become a needless round-by-round battle started by the CDI and funded with taxpayer monies will be to bring the CDI’s actions and actors to light, getting well past the obstructionist technicalities that threaten our access to due process. That done, we are confident CIC will be fully vindicated and able to operate its long-standing ‘A’ rated business in its new, chosen home, New Mexico. New Mexico State’s Attorney General has filed a brief supporting our position. We have many rounds to go, but we are ready and determined to stay the course.”

For further information contact:
Ryan Gerding, Public Relations, at +1 (913) 602-8531 or at press@auw.com.

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 (www.auw.com)
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.