San Diego-based Golden Eagle Insurance Corp. has sued the California insurance commissioner for $260 million. The suit is in relation to the old Golden Eagle Insurance Co., which was seized in 1997 and sold off to the highest bidder.
Golden Eagle Insurance Corp., now owned by Liberty Mutual Group, has alleged that the Department of Insurance has failed to pay it for claims administration services. The company also says it was shorted on reinsurance funds the DOI has received from reinsurance treaties covering old claims.
According to Golden Eagle, the new Golden Eagle has ended up paying claims in excess of what it had anticipated.
The recent suit, which was filed against the California DOI for claims administration fees and reinsurance proceeds, was to preserve the Statute of Limitations on a matter that goes back to the Conservation of Golden Eagle Insurance Company in 1997.
According to Golden Eagle spokesman Tim Lickness, this is “neither a new matter nor are these new issues.” Lickness noted the parties still seek to work out any differences through negotiation discussions.
CDI Chief Counsel and Deputy Insurance Commissioner Steve Green said his understanding was that the agreement Liberty Mutual entered into with former Commissioner Chuck Quackenbush was an agreement where “not all the i’s were dotted and the t’s were crossed at the end.”
“There is an allegation that Liberty was shorted some money,” Green said. “It’s my understanding that there’s some discussion that the final fee for Liberty to process the old Golden Eagle claims was not finally arrived at. This lawsuit is really an endeavor by Liberty to bring closure to the old issues.”
Noting that the monetary figure Golden Eagle arrived at is up for debate, Green commented, “I’ve seen some things said where Golden Eagle is asking for $260 million. That’s impossible. Golden Eagle estate doesn’t have $260 million. The Department of Insurance would not be obligated to pay that money under the statutory limit of assets of a seized company.”
Green added that the CDI is hopeful the matter can be resolved if not entirely amicably, to at least everyone’s “grin and bear it” satisfaction. “We’re hopeful people can get together,” Green added.
Was this article valuable?
Here are more articles you may enjoy.