Glendale Insurer to Pay $38-M in Worker’s Comp

Employment and Labor - Local News June 15, 2009

Glendale – The California Department of Insurance has asked Fremont Indemnity Co, a Glendale-based workers’ compensation insurer, to pay nearly $37.3 million as settlement in four lawsuits, which will be distributed to workers and its creditors.

The settlement brought to end a long legal dispute that started when Fremont collapsed in 2003 and the government had stopped mandating prices on workers’ compensation insurance, sending prices to sink. The company had written more than $800 million in premiums the year it was liquidated.

Since then, state regulators had filed four lawsuits against Fremont; one against its parent company, Fremont Compensation Insurance Group and another, against seven of its former executives.

State regulators said $27 million of the settlement money will come from two general creditor claims while the rest will come from various sources including cash from the insurer’s sub-prime mortgage lender and the sale of its corporate art collection.