Ohio Director, AmTrust Financial Settle Dispute

Ohio Department of Insurance Director Lee Covington, in his capacity as Liquidator of Credit General Insurance Company, announced a settlement with New York-based AmTrust Financial Group resolving all disputes that were the subject of a lawsuit Covington filed in Franklin County Common Pleas Court on Nov. 5, 2001. As part of the settlement, Covington agreed to dismiss with prejudice the lawsuit against AmTrust.

Covington filed the lawsuit in connection with disputes arising out of AmTrust’s agreement to provide reinsurance to Credit General Insurance Company.

Under terms of the settlement, AmTrust will continue to provide coverage to Credit General policyholders pursuant to the reinsurance agreement into which AmTrust and Credit General entered on Sept. 20, 2000. AmTrust had contended that certain policies renewed or issued by Credit General after Sept. 20, 2000 were not eligible for coverage, while Covington had claimed that AmTrust was obligated to administer and to pay all claims and loss adjustments expenses on those policies. Under the agreement, AmTrust will pay all claims and loss adjustments expenses.

In addition, AmTrust and the Director agreed to compromise on a minor dispute relating to commissions payable to Credit General.