On Nov. 20, California Attorney General Bill Lockyer, joined by Insurance Commissioner Harry Low, asked a court to void controversial earthquake settlements that allowed insurance companies to donate to foundations rather than face fines for mishandling claims stemming from the 1994 Northridge Earthquake. The officials filed an amended complaint in Sacramento Superior County Court contending that former Commissioner Quackenbush lacked the authority to arrange deals that allowed State Farm, 21st Century (formerly 20th Century), Allstate Corp. and Farmers Insurance to avoid paying roughly $3.3 billion in fines. The complaint also seeks damages from a number of the controversial nonprofit’s board members, including former Deputy Insurance Commissioner George Grays, for allegedly using the charity’s assets for their own personal gain. State Farm spokesman William Sirola said he was surprised at the attempt to void the settlements because his firm had been meeting regularly with California officials to work out a way to resolve the issue.
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