California’s Enforcement against W.R. Berkley Ends in $12M Settlement

May 23, 2017

California Insurance Commissioner Dave Jones today announced that the enforcement action taken against W.R. Berkley Corp. entities and operating units has resulted in a $12 million settlement.

Admiral Insurance Co., Admiral Risk Insurance Services Inc. nka BXM Insurance Services Inc., and other entities agreed to settlements for licensing violations and unlawfully transacting surplus line insurance in California.

The case came to the California Department of Insurance as a referral from the Surplus Line Association of California. The CDI began an investigation in 2011 and found that Admiral Risk and its employees transacted surplus line insurance without holding surplus line broker licenses from November 2003 through June 2011. Admiral Risk was also found to have acted as a managing general agent for affiliated company Admiral Insurance Co., an insurer not admitted to transact business in California.

After the department began its investigation, Admiral Risk and its employees obtained the necessary licensing. W.R. Berkley Corp. later hired outside counsel to conduct an independent review of its operations, and self-disclosed compliance issues to the CDI.

The settlement agreement specifies that Admiral Risk Insurance Services Inc. nka BXM Insurance Services Inc., in lieu of license suspension, will pay a monetary settlement of $1.5 million and also pay a cost recovery fee of $42,500 to reimburse the CDI for expenses incurred. Admiral Insurance Co. will pay the same monetary settlement and cost recovery fees for its actions.

W.R. Berkley Corporation has also agreed to pay a $9 million settlement and $15,000 for cost recovery. In recognition of the self-reporting and remedial actions already implemented by W.R. Berkley Corp., the settlement provides that $6 million of the settlement is suspended.