New Mexico AG Opposes California’s Blocking of California Insurance Company’s Redomestication
New Mexico’s Attorney General has moved to intervene in a lawsuit in which the California Insurance Co.’s is fighting actions by the California Department of Insurance to block CIC’s redomestication to New Mexico.
New Mexico Attorney General Hector Balderas, Jr. on Friday filed a request to submit amicus curiae briefs in support of CIC in the lawsuit aimed at enjoining the CDI from blocking CIC’s move.
Balderas’ filing is related to the federal lawsuit in the Eastern District of California filed by California Insurance Company of New Mexico against Insurance Commissioner Ricardo Lara, Deputy Insurance Commissioner Kenneth Schnoll and Special Deputy Insurance Commissioner Bryant Henley.
In his submission to the court, Balderas supports the claims made by CIC in its efforts to be released from CDI’s hold on the company and the approved redomestication.
“We applaud Attorney General Balderas’ forthright action recognizing that our position is valid and also that the CDI has acted in a manner that hurts his state since the presence of the California Insurance Company in New Mexico means jobs, enhanced insurance availability for the state’s majority minority (Hispanic and Native American) consumers, and tax dollars for the State,” Jeffrey Silver, executive vice president and general counsel of the company, said in a statement.
A CDI spokesman was reached out to for comment and replied with the following statement:
“State and federal courts have repeatedly affirmed the California Department of Insurance’s right to proceed with this valid and proper conservation.”
In 2019 CIC, as part of its buyout from Berkshire Hathaway, sought the CDI’s permission to move to New Mexico, while New Mexico held a hearing to approve the change of domicile. Approval was unanimous, including that of CDI officials. CIC had begun to plan its move to New Mexico, when in November California regulators acted to block the move with the imposition of a conservatorship.
A California federal court in April declined to get involved with a lawsuit that Applied Underwriters and the California Insurance Co. filed against the California Department of Insurance.
California Insurance Company of New Mexico filed suit in federal court in January to enjoin the CDI from continuing to take what the suit asserts are illegal, actions to block the approved redomestication of CIC and to undermine a financially sound insurer by instituting a conservatorship to gain control of CIC.
The suit came after the Office of the Superintendent of Insurance in New Mexico ordered CIC either to comply immediately with all regulations required under its approved redomestication to New Mexico or face financial penalties and possible revocation of the Company’s Certificate of Authority.
CDI got approval last year to place CIC in conservatorship and in January CDI filed a follow-up rehabilitation plan that would force CIC to sell its California business to another insurer.
CIC charges Lara and the other officials named with “unlawful” and “bad faith” action in imposing an arbitrary, illogical and illegal conservatorship of CIC to obstruct its New Mexico redomestication, after that move was approved by several states.
Related:
- CIC of New Mexico Sues to Enjoin California Department of Insurance from Interference
- Applied Underwriters Sues California Over ‘Bad Faith’ Insurer Conservatorship Plan
- Court Orders California Insurance Company Conserved in Another Round in Applied Battle