In the Matter of Ohio Casualty Insurance Company, West American Insurance Company, and American Fire & Casualty Company
Published: Mar. 11, 2000 | Result Date: Oct. 26, 1999 | Filing Date: Jan. 1, 1900 |Case number: FPA1003 Verdict – $4,830,000
Judge
Court
Case Not Filed
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
Larry Baker
(technical)
Roxani M. Gillespie
(technical)
Angele Khachadour
(technical)
Defendant
Richard Barger
(technical)
Facts
In 1992, the Ohio Casualty Group filed applications to withdraw as insurers from the state, surrendered their
certificates of authority to the California insurance commissioner and claim to have stopped writing new and
renewal insurance business in the state.
When southern California experienced brush fires in October and November 1993, and the Northridge
earthquake in January 1994, the California FAIR Plan Association assessed the Ohio Casualty group for FAIR
Plan losses. Created by the State Legislative in 1968, the FAIR Plan is a statutory association serving
California as a property insurer of last resort.
The California FAIR Plan Association contended that the Ohio Casualty Group must pay the assessment
because Insurance Code Section 10095(c) states that "each insurer shall participate in the writings, expenses,
profits and losses of the association in the proportion that its premiums written during the second preceding
calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of
the premiums written attributable to the operation of the association."
Accordingly, the Ohio Casualty GroupÆs assessments for 1993 and 1994 were based on their premiums written
in the calendar years of 1991 and 1992: $64.7 and $45.9 million, respectively.
The Ohio Casualty group argued that the FAIR PlanÆs assessment were improper
because the clear language of the statute, the legistative history, the FAIR Plans own plan of
operation and the California Supreme CourtÆs decision in Travelers Indemnity Company v.
Gillespe make clear, that to be liable for the assessment, an insurer must possess its certificate
of authority and be engaged in writing California basic property insurance during the year for
which the assesssment was made.
Result
After eight days of administrative proceedings before administrative law judge Michael D. Jacobs, the California Insurance Commissioner awarded the California FAIR Plan Association $3.1 million (plus interest). The Ohio Casualty Group has sought judicial review of the Insurance CommissionerÆs decision, alleging that it is invalid as a matter of law.
Length
eight days
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