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| | Dave Jones, California Insurance Commissioner, Announces Rehab Plan For Majestic Insurance
By Press Release - modified by Lonce LaMon - July 8, 2011
Davey Jones announced today, Friday, July 8th, that he has successfully completed implementing a comprehensive plan of rehabilitation for Majestic Insurance Company by closing a series of transactions that transfer all of Majestic’s insurance liabilities and certain business obligations to AMTrust Financial Services, Inc. (Nasdaq AFSI), an “A” rated insurance group. The closing of these transactions on Friday, July 1st, was the definitive step in providing full protection for all of the injured workers and policy holders covered under Majestic Insurance policies.
"I am extremely proud of the work of my Department in quickly crafting and implementing a business solution to the problems at Majestic," said Commissioner Jones. "Our Rehabilitation Plan not only protects all of Majestic's claimants and policyholders from any loss or payment delay, but in the process we saved more than 80 jobs at the company's California offices who, as AmTrust employees, will work to grow AmTrust's California workers' compensation business and create more jobs."
Majestic was placed into conservation by the Commissioner on April 21, 2011, and on that same day the Commissioner filed a motion to approve his proposed rehabilitation plan. The San Francisco Superior Court set a hearing date for June 2nd, and then approved the Plan on schedule after a full hearing. In less than 30 days, the Commissioner's team completed the tasks required to close the deal and finalize the Plan.
As a result of the Rehabilitation Plan closing:
• All of Majestic's workers' compensation claims are now being administered and paid by AmTrust's lead underwriting company, Technology Insurance Company, Inc.
• The majority of Majestic employees are now employees of AmTrust North America, Inc.
• Insurance Brokers are able to submit all Majestic renewals and new business opportunities to AmTrust's insurance carriers
"AmTrust is very pleased to have been able to assist the Commissioner in developing an innovative solution to Majestic's problems and we look forward to doing our part to strengthen the California workers' comp marketplace," said AmTrust's CEO Barry Zyskind.
For non-insurance, general creditor claims against Majestic which have not, pursuant to the Rehabilitation Plan, been assumed by AmTrust, the final steps in the Rehabilitation Plan will be the establishment of a claims bar date for the submission of such claims. The Commissioner expects to file within the next 90 days a request that the Court set a bar date.
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