Nevada Carrier Takes Over Where Fremont Left Off
By Robert Warne - March 21, 2002Fremont Compensation Insurance Group struck a deal March 15 with Employers Insurance Co. of Nevada. The exclusive agreement was made public March 20 in a letter from Fremont Compensation’s President and CEO Mary-Lou Misrahy. If the transaction goes as planned, Employers Insurance will acquire Fremont’s workers’ compensation insurance business in California.
“Nothing changes,” Misrahy told adjustercom.com. “That’s what’s so eloquent about this deal.” Employers Insurance is a full-service workers’ compensation mutual insurance company that was once Nevada’s state fund.
They want to grow their business said Misrahy. “We have the infrastructure, the people, the systems and the facilities,” to help them do just that. “Our companies compliment each other.”
Fremont’s offices in Glendale, San Francisco and Newbury Park reportedly will be transferred over to Employers Insurance. The company will be picking up Fremont’s ongoing business, but won’t inherit the liabilities of the tail from Fremont’s runoff, which according to Misrahy is minimal.
The letter indicated that the fronting agreement Fremont has with Clarendon Insurance Group would remain intact for Employers Insurance.
According to Misrahy, “We’ve met with Clarendon and they’re excited for the new arrangement.”
Since December 14, 2000 Cambridge Integrated Services has been handling the bulk of Fremont’s runoff claims operations. Misrahy said that the company’s arrangement with Cambridge would not be affected by the Employers Insurance deal.
California regulators are reportedly supportive of the sale. In December 2000 the California Department of Insurance (DOI) put Fremont Compensation under supervision because of its lack of reserves to pay future claims. Rather than conserve the company, the DOI allowed Fremont to discount its loss reserves by dumping a portion of its book of business into runoff mode.
Claims department management was contacted in Glendale and San Francisco, but sources reached did not provide further details.
A claims insider who has survived three recent company name changes while working on the same files said the deal sounds good, but “these things usually have rocky roads however. We'll see, Nevada [Employers Insurance] might not know what they are getting into.”
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