Insurance Suits Settled for $37 Million

State insurance regulators announced Friday they have settled four lawsuits stemming from the 2003 failure of Glendale workers’ compensation insurer Fremont Indemnity Co. The settlements are expected to net $37 million for the state’s insurance company liquidation office.

Fremont was one of the largest insurance carriers to collapse during the workers’ compensation crisis earlier this decade; at the time of its failure, it had $800 million in policyholder premiums outstanding.

Starting in 2004, the California Department of Insurance’s Conservation and Liquidation Office filed four lawsuits aimed at recovering funds. One was filed against parent company Fremont General Corp. and another case was filed against former chief executive Louis Rampino and other directors of the failed carrier.

The settlements announced Friday include payments from sale of the defunct carrier’s art collection (valued at $4 million) and $27 million in creditor claims.

More than two dozen insurance carriers collapsed when claims costs rose, creating solvency problems for the carriers because they had been offering coverage at discount rates.