Following the dismissal of its lawsuit against the California Department of Insurance (CDI), California Insurance Company (CIC) has publicized its intention to have its “day in court” to make its case on why it should be allowed to redomesticate its business from California to New Mexico.
CIC initially filed a lawsuit against the CDI, to stop the regulator from placing the insurance company into conservatorship – a measure the insurer says is reserved only for insolvent companies or when there is a risk to policyholders. CDI had initially ruled that CIC’s redomestication to New Mexico did not present any risks to California policyholders, but later made an “about face” and waged a bad faith campaign against the insurer, according to CIC.
However, that complaint was recently shot down, when US District Court Judge William Shubb of the Eastern District of California granted the motion by the CDI to dismiss CIC’s lawsuit.
In a statement, CIC indicated that in response to its lawsuit being dismissed, it will file an appeal to the US Court of Appeals for the Ninth Circuit for “an eventual return to argue the merits of its dispute with the CDI.”
The company also noted that while its conservation was put into place nearly two years ago in an ex parte hearing where it was not present to defend itself, it has yet to be granted a proper hearing to hear the actual merits of CDI’s case, including the legitimacy of the conservatorship.
CIC also said that Judge Shubb’s decision once again puts off its “day in court,” when the company could contesr the CDI’s seemingly arbitrary and allegedly illegal imposition of a conservatorship.
“Point is, this narrow decision was based on technicalities and did not weigh the merits of the case, a prospect that will be enabled when we pursue any of our available actions and appeals in the next round to set the path to a judgement on the actual merits,” commented CIC general counsel Jeffrey Silver, Esq. “CIC will raise issues of constitutional law in its effort to terminate the conservatorship imposed by CDI after it agreed with CIC’s planned move to New Mexico, then suddenly reversed its position and used the conservatorship in what is arguably an illegal manner.”