Team of California litigators obtains win in reinsurance/director and officer litigation.
Nixon Peabody recently obtained a $22-million settlement on behalf of the California insurance commissioner after a six-month trial in Los Angles Superior Court. The case, Commissioner v. Rampino et al., was brought on behalf of the commissioner as liquidator of Fremont Indemnity Company, a national workers compensation insurer, against former members of the Fremont board. The settlement was reached while the case was awaiting decision after trial and included Fremont’s parent entity, Fremont General Corporation.
The commissioner alleged that the board acted recklessly in causing Fremont to embark on a program of “net line underwriting” under which the pricing and underwriting of workers compensation policies were changed to advantage Fremont at the expense of its reinsurers. Fremont’s reinsurers eventually discovered the change in underwriting practices and asserted claims for rescission of their reinsurance treaties, which resulted in financial losses to Fremont.
The Nixon Peabody trial team consisted of San Francisco Litigation & Dispute partner Karl Belgum and associate Kathy Kizer.