Insurance Commissioner Jones Announces Successful Implementation of Rehabilitation Plan for Majestic Conservatorship
News: 2011 Press Release
Insurance Commissioner Dave Jones announced today that he has successfully completed implementing a comprehensive plan of rehabilitation for Majestic Insurance Company by closing a series of transactions that transfer all of Majestic's insurance liabilities and certain business obligations to AmTrust Financial Services, Inc. (Nasdaq: AFSI), an "A" rated insurance group. The closing of these transactions on Friday, July 1, was the definitive step in providing full protection for all of the injured workers and policyholders covered under Majestic insurance policies.
"I am extremely proud of the work of my Department in quickly crafting and implementing a business solution to the problems at Majestic," said Commissioner Jones. "Our Rehabilitation Plan not only protects all of Majestic's claimants and policyholders from any loss or payment delay, but in the process we saved more than 80 jobs at the company's California offices who, as AmTrust employees, will work to grow AmTrust's California workers' compensation business and create more jobs."
Majestic was placed into conservation by the Commissioner on April 21, 2011, and on that same day the Commissioner filed a motion to approve his proposed rehabilitation plan. The San Francisco Superior Court set a hearing date for June 2nd, and then approved the Plan on schedule after a full hearing. In less than 30 days, the Commissioner's team completed the tasks required to close the deal and finalize the Plan.
As a result of the Rehabilitation Plan closing:
- All of Majestic's workers' compensation claims are now being administered and paid by AmTrust's lead underwriting company, Technology Insurance Company, Inc.
- The majority of Majestic employees are now employees of AmTrust North America, Inc.
- Insurance Brokers are able to submit all Majestic renewals and new business opportunities to AmTrust's insurance carriers
"AmTrust is very pleased to have been able to assist the Commissioner in developing an innovative solution to Majestic's problems and we look forward to doing our part to strengthen the California workers' comp marketplace," said AmTrust's CEO Barry Zyskind.
For non-insurance, general creditor claims against Majestic which have not, pursuant to the Rehabilitation Plan, been assumed by AmTrust, the final steps in the Rehabilitation Plan will be the establishment of a claims bar date for the submission of such claims. The Commissioner expects to file within the next 90 days a request that the Court set a bar date.
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 www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.