Less than one month after being deemed under-reserved and in hazardous financial condition, Superior National Insurance Group is planning to sue Foundation Health Corp. over the 1998 purchase of Business Insurance Group, its workers’ compensation insurance operations.
Foundation Health Corp., a subsidiary of Foundation Health Systems made the announcement Thursday, saying the suit had no merit. Superior’s suit will attempt to pin its financial problems on the acquisition rather than California’s poor-performing workers’ comp. market, according to Foundation reports.
The allegations remain to be seen as no formal suit has been filed. Superior could not be reached for comment.
The California Department of Insurance seized Superior National along with other Superior insurance subsidiaries last month, saying the company was under-reserved and in hazardous financial condition. The New York DOI is contemplating similar action for Commercial Compensation Insurance Co., a Superior affiliate domiciled in New York.
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