Applied Underwriters Files Federal Lawsuit Against California Commissioner of Insurance Charging Violations Of US Constitution

San Francisco, CA (WorkersCompensation.com) -  Applied Underwriters, Inc. and Applied Risk Services, Inc. today filed a lawsuit against the Insurance Commissioner of the State of California and others in U.S. District Court for the Eastern District of California, asserting five claims under the U.S. Constitution.

Represented by trial lawyers from Boies Schiller Flexner LLP, Applied Underwriters and Applied Risk Services allege that the California Department of Insurance acted in bad faith and abused its authority under state law in ways that have caused substantial harm to the companies.

As Applied Underwriters and Applied Risk Services allege in the complaint, the California Department of Insurance placed California Insurance Company (“CIC”) into a conservatorship under false pretenses and has abused its authority by trying to force Applied Underwriters to relinquish its rights in connection with the Department’s unlawful actions.

According to Mr. Alan Quasha, Chairman of Applied, “The California Department of Insurance has held CIC hostage in a conservatorship for over a year, despite the fact that CIC is fully solvent, has an “A” rating, and remains fully committed to its California customers. Despite many good faith efforts to resolve these issues, the Department unfortunately seems intent on wasting state resources, harming consumers, and attacking businesses that provide

essential services to consumers in California and around the country. It is time to put an end the Department’s abusive behavior and hold it accountable for the harms it has caused.”

According to Mr. Quasha, “The California Department of Insurance has repeatedly acknowledged California Insurance Company’s considerable capital, surplus, and deposits, and that the proposed CIC merger presents no risk to California policyholders. While there may be situations where a conservation makes sense, this is certainly not one of those. There is no justification for the Department’s ongoing campaign to harm not only CIC but also Applied Underwriters. The California Department of Insurance has instituted and appears set on maintaining an unnecessary and unlawful conservation over a fully solvent private company, which is a wasteful use of taxpayer money and precious state resources. Instead of using its authority in good faith and to protect California consumers, the California Department of Insurance seems intent on punishing CIC and also Applied Underwriters. The law protects against this sort of abusive behavior, and Applied Underwriters now seeks to hold the California Department of Insurance accountable for its actions.”

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