California has taken over workers' compensation insurer Majestic Insurance Co., Insurance Commissioner Dave Jones announced.
In a statement April 21, the commissioner said his office had filed a motion seeking court approval of a rehabilitation plan that would transfer San Francisco-based Majestic's liabilities to Cleveland-based AmTrust North America Inc.
AmTrust, which provides workers comp coverage for small and midsize companies, would administer policyholder claims.
Components of the deal include a loss portfolio transfer, sales of renewal rights and the purchase of assets.
The conservation, meanwhile, will not cause any delay in injured workers receiving benefits, the commissioner said in a statement.
“For some time, my department has been concerned with Majestic's financial condition, and has been carefully monitoring the company to determine if an intervention is warranted to make certain that Majestic can continue to honor its claim commitments,” the commissioner said in the statement.
In 2009, the New York State Workers' Compensation Board filed suit seeking $400 million in damages from Majestic and Majestic Capital for losses resulting from the failure of several group workers compensation trusts.
Majestic Insurance's parent, Majestic Capital Ltd., changed its name last year from Compensation Risk Managers L.L.C.
Aside from California, Majestic Insurance provided workers' comp coverage to employers in Arizona, Nevada, New York, New Jersey and other states. During 2010 it wrote $69 million direct premiums in California, the commissioner said.