Fremont General Cashes in on Conservation By Robert Warne - July 31, 2003
Fremont General’s 99 percent income increase for the second quarter is a sure sign that the Glendale-based financial services holding company has reaped the fruits of conservation.
The main immediate benefit afforded Fremont General after the Department of Insurance (DOI) conserved Fremont Indemnity Co. (FIC), June 4, is that it was excused from any future financial obligation to FIC.
Last year Fremont General made a six-year commitment to the DOI to provide financial contributions to FIC to cover the run-off process and regulatory oversight. As a result of the agreement, Fremont General socked away $119 million in reserves to satisfy its obligation to FIC and the DOI.
But a portion of the language contained in the agreement stipulated that Fremont General would be relieved of its financial obligations if FIC was conserved before March 1, 2004.
So when the conservation order was granted to Insurance Commissioner John Garamendi, Freemont General was free to crack into the $119 million nest egg.
And according to the Fremont General’s second quarter results, there was $44 million left inside that egg to go straight towards the company’s bottom line.
Adjuster / Examiner Claims Examiner Santa Ana Unified School District Santa Ana, CA
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