Question of Jurisdiction Stymies Applied Underwriters’ Effort to Argue the Merits of Illegal CDI Action

Omaha -- April 6, 2021 -- Applied Underwriters’ and the California Insurance Company’s ongoing effort to have their “day in court” to argue the merits of the illegal California Department of Insurance (“CDI”) interference in their operations was stymied again last week when a California federal court ruled that jurisdictional concerns were enough to have the court abstain and not get involved at this time. Applied’s lawsuit against the CDI was dismissed upon technical jurisdictional grounds, leaving the essence of the Company’s charges against the CDI to be set for another venue and another day.

The case against the CDI is based upon a central claim: that the CDI placed the A rated carrier into conservatorship, a format through which the CDI may influence directly the Company’s activities, selection of vendors, attorneys and priorities. Conservatorship is generally reserved for companies in dire straits, a condition that is the opposite of Applied and the California Insurance Company’s condition, according to all of the insurance reporting agencies.

Mr. Jeffrey Silver, Esq., Executive Vice President and General Counsel of Applied, reacted to the decision as follows: “We will certainly continue our fight to undo this gross injustice. The current decision hinged clearly upon technical jurisdictional issues, not on the merits. We are confident that when we do get a hearing on this, and we will, and have our ‘day in court’ that we will roundly prevail. The illegal power grab that the CDI has made in yet another case will be exposed readily and undone fully. We will attack and expose this illegal, immoral usurpation of bureaucratic power and the parallel, exotic regulatory overreach that has facilitated it. It will not stand.”

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

For more information about the CDI lawsuit, please visit: https://www.auw.com/calupdate

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.

California Insurance Company holds an A.M. Best Rating of “A”.
Ratings issuer AM Best has affirmed the Financial Strength Rating of ‘A’ (Excellent) and Long-Term Issuer Credit Ratings of ‘A’ of five companies collectively referred to as North American Casualty Group (NAC). The companies with the affirmed ratings are: California Insurance Co. (CIC), Continental Indemnity Co., Illinois Insurance Co., Texas Insurance Co. and Pennsylvania Insurance Co. All companies are domiciled in Santa Fe, New Mexico. NAC’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed at the strongest level, and AM Best expects it to remain at a similar level in prospective years. Balance sheet strength also benefits from the company’s strong liquidity profile, conservative investment strategy and disciplined reserving. The ratings agency said NAC has a track record of “strong operating earnings, underpinned by its robust underwriting performance” and demonstrated by a five-year average return on equity ratio of 13.1% and a combined ratio averaging 75% (2015-2019).