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Insurer Connected to Ricardo Lara’s Political Controversy Ordered to be Taken Over by the State

Insurer Connected to Ricardo Lara’s Political Controversy Ordered to be Taken Over by the State

November 27, 2019 Controversy, News

California Insurance Commissioner Ricardo Lara’s political controversy continues as a judge has ordered the insurance company at the heart of his political controversy to be taken into immediate conservatorship by government regulators. San Mateo County Judge George A. Miram made the order earlier this month appointing the Department of Insurance’s conservation and liquidation office to be in full control of the California Insurance Co., which is a subsidiary of Applied Underwriters. The ruling is the result of a petition filed by the state Department of Insurance in San Mateo Superior Court. According to court records, California Insurance Co. announced a merger with a New Mexico company last month in order to expedite a sale that California regulators had yet to approve, so the state sought permission to assume control of the company. The Department of Insurance issued the following statement after Judge Miarm’s decision was announced,

California law is unequivocal in giving the Department of Insurance the responsibility and power to review transactions of California-based insurers in order to protect policyholders and the public. No company can evade this authority if it wants to sell insurance in this state.

This was a significant request by the Department of Insurance due to the fact that Lara had previously met privately with Steven Menzies, the president of Applied Underwriters, at least twice and accepted over $46,000 in campaign donations from people associated with his insurance companies. The San Diego Union-Tribune disclosed the contributions in July and then also reported that Lara had accepted over $270,000 in total in insurer-related donations. The newspaper also revealed that Lara’s staff had overturned hearing officers in at least five proceedings to benefit Applied Underwriters, which has dozens of complaints pending before the Department of Insurance. Lara claimed that he would return the money and remove himself from any further decisions involving Applied Underwriters.

The majority of Applied Underwriters’ business involves selling worker’s compensation insurance policies. California regulators called EquityComp, one of the company’s main products, a “bait-and-switch” plan before they banned its sale. Judge Miram’s order precludes company officials from taking any actions to consummate the sale of the company or to cancel or attempt to cancel any policies. According to the Department of Insurance, the insurance company still has $185 million in premiums written in California. We will have to see how this issue is resolved and if any more political controversies involving Lara emerge.

Read the full article here

Tags: Applied UnderwritersCalifornia Department of InsuranceCalifornia Insurance Co.California Insurance CommissionerCampaign DonationsConservatorshipContributionsControversyGeorge A. MiramRegulatorsRicardo LaraSan Diego Union-TribuneSan Mateo CountySteven Menzies
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