Golden Eagle Insurance Corp. has filed a $260-million lawsuit against the California Insurance Commissioner for claims administration fees and reinsurance proceeds. The suit is to preserve the Statute of Limitations on a matter that goes back to the conservation of the former Golden Eagle Insurance Company in 1997. At that time, the company was seized and sold off to the highest bidder.
Golden Eagle, now owned by Liberty Mutual Group, has alleged that the California Department of Insurance (CDI) failed to reimburse it for claims administration services. The company also says it was shorted on reinsurance funds the CDI received from reinsurance treaties covering old claims.
According to Golden Eagle, the company has ended up paying claims in excess of what it had anticipated.
Spokespersons for both San Diego-based Golden Eagle and the CDI say that the company’s move to sue the CDI is neither a new matter nor are these new issues.
CDI Chief Counsel and Deputy Insurance Commissioner Steve Green said his understanding was that the agreement Liberty Mutual entered into with former Commissioner Chuck Quackenbush was an agreement where “not all the i’s were dotted and the t’s were crossed at the end.”
“There is an allegation that Liberty was shorted some money,” Green said. “It’s my understanding that there’s some discussion that the final fee for Liberty to process the old Golden Eagle claims was not finally arrived at.
“This lawsuit is really an endeavor by Liberty to bring closure to the old issues.”
Noting that the monetary figure Golden Eagle arrived at is up for debate, Green commented, “I’ve seen some things said where Golden Eagle is asking for $260 million. That’s impossible. Golden Eagle estate doesn’t have $260 million. The Department of Insurance would not be obligated to pay that money under the statutory limit of assets of a seized company.”
Green added that the CDI is hopeful the matter can be resolved if not entirely amicably, to at least everyone’s “grin and bear it” satisfaction. “We’re hopeful people can get together,” Green added.
According to Golden Eagle spokesman Tim Lickness, both parties still seek to work out any differences through negotiation discussions. The company had no further comment on the matter.
Topics Lawsuits
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