A "scanned" copy of the original court document is available in PDF format (see above PDF icon link). In compliance with the American Disability Act, an alternate version is available below, in HTML format, suitable for text browsers and screen readers. While this HTML version was produced using OCR (Optical Character Recognition) software, then manually edited and verified, no responsibility is assumed for any error, omission, or inaccuracy. Please contact webmaster@caclo.org to report any errors or accessibility problems. For a true copy of the court document, please refer to the PDF version.
BILL LOCKYER, Attorney General
of the State of California
W. DEAN FREEMAN
Lead Supervising Deputy Attorney General
MARK P. RICHELSON
Supervising Deputy Attorney General
RAYMOND B. JUE
Deputy Attorneys General
State Bar No. 61656
300 South Spring Street, Room 1702
Los Angeles, CA 90013
Telephone: (213) 897-2480
Facsimile: (213) 897-5775
Attorneys for Applicant, Insurance Commissioner
of the State of California
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
INSURANCE COMMISSIONER OF THE
STATE OF CALIFORNIA,
Applicant,
v.
LEGION INSURANCE COMPANY and
VILLANOVA INSURANCE COMPANY,
Pennsylvania corporations,
Respondent.
Case No.: BS 075861
DECLARATION OF ROBERT
LOO IN SUPPORT OF
VERIFIED APPLICATION FOR
ORDER OF LIQUIDATION
Date: April 25, 2003
Time: 9:30 a.m.
Dept: 85
I, Robert Loo, state:
I am employed as a Supervising Insurance Examiner and Chief of the Property and Casualty-1 Bureau, Financial Analysis Division, with the State of California Department of Insurance (the "Department"), located in Los Angeles, California. I graduated in 1973 from California State University at Long Beach with a Bachelor of Arts degree in Business Administration. I hold a professional designation in Associate in Insurance Accounting and Finance ("AIAF") from the Insurance Institute of America ("IIA"), I am a Chartered Property and Casualty Underwriter ("CPCU") from the American Institute of the Chartered Property and Casualty Underwriters ("AIPCU"). In addition, I also completed many other accounting and insurance courses.
I have been employed with the Department for over 30 years. I have held my current position with the Department since November 2000. Immediately previous to my current position, I was Chief of the Property and Casualty Bureau for 11 years and 8 months.
As a Supervising Insurance Examiner and Chief of the Property and Casualty-1 Bureau, I am responsible for supervising and overseeing the financial reviews and analyses by the Department of the financial conditions of property and casualty insurance companies (which includes workers' compensation carriers) assigned to my bureau for the purpose of compliance with the licensing and solvency requirements of the laws and regulations of the State of California. During my employment with the Department, I have participated in the financial reviews, examinations and analyses of thousands of insurance companies.
Through my employment with the Department, and in my capacity as a Supervising Insurance Examiner and Chief of the Property and Casualty Bureau-1, I am familiar with Statutory Accounting Practices ("SAP") as it relates to property and casualty insurance companies, and I am familiar with the statutes and regulations governing the financial activities of property and casualty insurance companies in California including, but not limited to, the statutes and regulations which pertain to solvency, insolvency, minimum statutory capital and surplus requirements, priority status, and reserve requirements, restrictions and limitations to affiliated transactions.
Respondents Legion Insurance Company and Villanova Insurance Company ("Respondents" or "Legion" and "Villanova"), are now and at all times mentioned have been corporations duly organized and existing under and by virtue of the laws of the State of Pennsylvania and domiciled there, with their principal offices in Philadelphia, Pennsylvania.
Respondents filed their respective December 31, 2001 Annual Statements with the Department of Insurance on March 1, 2002. As licensed insurers in California, Respondents are required to file their Annual and Quarterly Statements, together with the Special California Schedule P. The reporting the Department of Insurance received from Respondents is as of December 31, 2001. Respondents have failed to file any of the 2002 Quarterly Statements, 2002 Annual Statements (which were due March 1, 2003), 2001 Special California Schedule P (which were due May 1, 2002) and 2002 Special California Schedule P (which were due March 1, 2003).
I have conducted a financial review of Respondents' financial condition based upon an analysis of their respective annual statements filed with the California Department of Insurance. Based upon my analysis, I have determined that Legion had an adjusted policyholders' surplus of negative $292,334,113 as of December 31, 2001, the date of its last officially filed annual statement with the California Department of Insurance. Legion reported that as of December 31, 2001, it had total net admitted assets of $l,116,131,000 and total liabilities of approximately $817,835,000 resulting in a policyholder surplus of $298,296,000. However, Legion's policyholder surplus as of December 31, 2001, when adjusted to conform to the laws, regulations and accounting practices of California, was negative $292,334,113.
I have further determined that Villanova had an adjusted policyholders' surplus of negative $78,581,803 as of December 31, 2001, the date of its last officially filed annual statement with the California Department of Insurance. Villanova reported that as of December 31, 2001, it had total net admitted assets of $173,162,000 and total liabilities of $145,524,000, resulting in a policyholder surplus of $27,638,000. However, Villanova's policyholder surplus as of December 31, 2001, when adjusted to conform to the laws, regulations and accounting practices of California, was negative $78,581,803.
Respondents' policyholder surplus is less than the minimum amount of capital and surplus required by California Insurance Code §§ 700.01, 700.02 and 700.025, for an insurer transacting the classes of insurance authorized by the Certificate of Authority issued to Respondents by the Insurance Commissioner. Based upon my analysis, Respondents are statutorily insolvent within the meaning of Insurance Code § 985 and are both in a financially hazardous condition.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Executed on March 20, 2003, at Los Angeles, California.