Regulator takes control of small failing insurer
News: 2018 Press Release
SACRAMENTO, Calif. — California’s insurance regulator took expedited legal action today to secure the assets of and take control of Merced Property & Casualty Company, in an effort to protect the company’s policyholders, including those who suffered losses in the Camp Fire. The volume of claims associated with the catastrophic Camp Fire—the deadliest and most destructive fire in California history—has overwhelmed the small insurer to the point of insolvency.
“California law gives us the authority to take over insurance companies that face insolvency. Protecting Camp Fire policyholders who have already suffered through so much was my first consideration,” said Insurance Commissioner Dave Jones. “We are moving aggressively to take the necessary legal action to take control of the company and to trigger the state law enabling the California Insurance Guarantee Association to immediately begin the process of evaluating losses and paying claims.”
This afternoon the department filed with the Merced County Superior Court an expedited request for an order enabling the takeover of the company. The California Insurance Department’s Conservation and Liquidation Office, established by law to handle the liquidation of failing insurance companies, is managing the transfer of the company’s claims handling to CIGA.
While current insurance policies remain in-force for 30 days, anyone insured with Merced Property & Casualty Company should seek coverage with another insurer immediately. Once the court issues the requested order, the Conservation and Liquidation Office will notify policyholders about where and how to file a claim with CIGA for insured losses or the return of any unearned premium on their policy.
Given the unprecedented scale of recent wildfires, Jones directed the department to conduct additional detailed reviews of every property insurer domiciled in California to make sure they are properly managing their exposures. The department has received no reports of other insurers in a similar situation.
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Consumers who have difficulty finding homeowners coverage or receive a non-renewal notice from their existing home insurer, should consider consulting an insurance broker who can shop many different companies for appropriate coverage. The FAIR Plan is available for consumers unable to find homeowners coverage.
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.