CastlePoint National Insurance Co., the sole remaining carrier member of the Tower Group, was placed into conservation in late July by order of the San Francisco Superior Court to protect policyholders and injured workers covered under policies issued by CastlePoint and the other member companies of the Tower Group.
After being appointed conservator of CastlePoint, California Insurance Commissioner Dave Jones filed a motion seeking approval of a conservation and liquidation plan for CastlePoint to further protect policyholders by deconsolidating CastlePoint from the Tower Group and providing for transactions that will bring in more than $200 million in new value for the benefit of policyholders and claimants.
A hearing on the motion to approve the Plan is set for Sept. 13 in Superior Court.
The plan will also a process for liquidating CastlePoint by ensuring that the insurance guaranty funds around the country can assume responsibility for administering and paying CastlePoint’s insurance claims without disruption when the Court issues a final liquidation order, according to a statement from Jones.
During the initial conservation phase there should be no disruption or delay in the delivery of workers’ compensation benefits to injured workers and other claims covered under CastlePoint policies, according to Jones.
The Tower Group’s troubles started emerging during 2013 when it announced that it had deficiencies of nearly $400 million in its aggregate policyholder loss reserves. That was compounded by accounting errors that resulted in the parent company, Tower Group withdrawing its previously filed consolidated financial statements for 2011 and 2012.
In 2014, the Tower Group was acquired by ACP Re, a Bermuda reinsurer with ownership aligned with AmTrust Financial Services Inc. and National General Holdings Corp. While that acquisition improved Tower’s situation, the volatility and deterioration of the pre-acquisition claims continued unabated through 2015. By the end of 2015, the Tower Group reported additional loss reserve deficiencies above $400 million.
Tower was made up of 10 insurance companies that operated on a largely consolidated financial basis through an intercompany reinsurance pooling arrangement.
Topics California Workers' Compensation
Was this article valuable?
Here are more articles you may enjoy.
Insurers Settle With Hotel in Case of Woman Videotaped in the Shower 
FM Global Rebrands As FM 
Wall Street Pushes Back After Activists Escalate Protests 
What Disruptions Have Been Reported After the Global Tech Outage? From This Issue
