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Department takes additional legal action against Access Insurance Company to protect policyholders

News: 2018 Press Release

For Release: January 23, 2018
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Department takes additional legal action against Access Insurance Company to protect policyholders
Two Orders to Show Cause issued to insurer alleging financial distress
SACRAMENTO, Calif. — The California Department of Insurance yesterday issued two additional Orders to Show Cause against Access Insurance Company. The first alleges Access Insurance Company is conducting its business and affairs in a manner that threatens to render it insolvent or in a financially hazardous condition in violation of the California Insurance Code. The second alleges Access Insurance Company has failed to pay over $5 million in premium taxes, interest and penalties.

The first Order to Show Cause alleges that Access Insurance Company conducts its business in a hazardous manner that results in a risk of loss to the policyholders, creditors and the public. The order alleges the company has failed to properly account for its future obligations. The company's reserves are $22.5 million deficient and it has failed to pay premium taxes, penalties and interest in excess of $5 million dollars resulting in a total deficiency of nearly $27.2 million available to pay policyholders on their claims.

The department staff alleges that as a result of the deficiency noted above Access Insurance Company failed to maintain the capital required by law and the Insurance Commissioner is authorized to place Access Insurance Company under regulatory control. As a result, the Access Insurance Company may be subject to conservation or liquidation proceedings. Irreparable loss and injury to the property and business of the company may occur unless the Insurance Commissioner acts to correct, eliminate, and remedy such conduct and conditions.

The second Order to Show Cause charges Access Insurance Company with repeatedly failing to pay premium taxes to the State of California, and alleges that the company currently owes over $5.2 million in delinquent taxes, interest, and penalties. Pursuant to California Revenue and Taxation Code Section 12802, Access Insurance Company's Certificate of Authority shall be revoked unless the company can establish that the taxes, interest and penalties currently outstanding and due have been paid. The department staff alleges that this outstanding tax liability is in addition to the inadequate reserves identified in the first Order to Show Cause.

"As Insurance Commissioner, my first priority is protecting consumers," said Insurance Commissioner Dave Jones. "To do this I must ensure all insurance companies are following the law, acting with financial integrity, and delivering on their promises to consumers."

A public hearing will be held on February 28, 2018 at 10:00 a.m. at the Department of Insurance in San Francisco after which the Insurance Commissioner will determine whether to issue a cease desist order and or revoke Access Insurance's Certificate of Authority to transact insurance.

A separate Order to Show Cause, Accusation, and Notice of Non-Compliance were filed in July 2017 charging Access Insurance Company and some of its affiliates with engaging in improper claims handling and improper rating and underwriting practices in violation of the California Insurance Code and the Fair Claims Settlement Regulations. These actions are still pending.

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Media Notes:

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.

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