Life Insurance

California Insurance Company applauds Attorney General’s support for redomestication plan

Filed earlier this year, CIC’s lawsuit claims that the defendants – CDI commissioner, Ricardo Lara, deputy commissioner Kenneth Schnoll, and deputy commissioner Bryant Henley – violated the Commerce Clause of the United States Constitution and the insurer’s right to due process.

Read more: California Insurance Company accuses regulator of “illegal interference” in lawsuit

In Balderas’ petition for an amicus filing, the attorney general supported the claims made by CIC in its efforts to be released from CDI’s “unusual hold” on the company and its approved redomestication.

CIC has responded favorably to Balderas’ filing.

“We applaud Attorney General Balderas’ forthright action recognizing that our position is valid and also that the CDI has acted in a manner that hurts his state since the presence of the California Insurance Company in New Mexico means jobs, enhanced insurance availability for the state’s majority-minority (Hispanic and Native American) consumers, and tax dollars for the State,” said Jeffrey Silver, Esq., executive VP and general counsel of Applied Underwriters, which CIC is affiliated with through parent company North American Casualty Group.

According to Silver, the amicus filing would support the views of industry observers, who observed the CDI’s “seemingly cavalier use of its power”, especially after the regulator had initially approved the redomestication plan. The general counsel added that conservatorship – CDI’s plan to allegedly control CIC – is typically used for insolvency or when policyholder danger exists.

“California had already approved the redomestication, together with the approvals of several other States’ insurance regulators,” Silver said. “The subsequent conservatorship action was among the most unusual ever seen, that is, using a mechanism created for cases of potential policyholder peril to accomplish the irrational blocking of a solid financial entity.  This is a first: the CDI has never before used the conservation proceeding for anything other than financial concerns.

“Thankfully, now a most creditable petitioner has indicated he will join in the case to help move it to a just conclusion and to enable New Mexico’s regulators to continue their critical processes, currently frustrated by the CDI’s actions.”

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