COMMISSIONER QUACKENBUSH ANNOUNCES ENHANCED"CUT-THROUGH" REINSURANCE AGREEMENT WITHKEMPER INSURANCE COMPANIES TO SUPPORT AND PROTECT SUPERIOR NATIONAL POLICYHOLDERS SACRAMENTO -- Insurance Commissioner Chuck Quackenbush announced today that an enhanced "cut-through" reinsurance agreement has been negotiated with the Kemper Insurance Companies to provide support for the new and renewal insurance policies being written by the Superior National Insurance Companies in Conservation. The Kemper reinsurance covers insurance policies issued by the Superior National Insurance Companies on and after Wednesday, April 5, 2000. The Kemper reinsurance agreement replaces the prior agreement reached with Centre Insurance Company shortly after the conservation of Superior National. "I am extremely pleased to have the support and assistance of Kemper in our effort to rehabilitate Superior National," said Commissioner Quackenbush. "Kemper has a long and distinguished history in the workers’ compensation market nationwide. Kemper adds great value and experience and will help us protect Superior National’s good book of business as we develop a comprehensive solution to the serious issues that face Superior National." The new "cut-through" reinsurance agreement with Kemper provides protection for policyholders and furthers the Department’s aggressive efforts to protect policyholders and injured workers through the rehabilitation of Superior National. "Cut-through" protection provides coverage that allows policyholders and injured workers covered under new and renewal policies to submit claims directly to Kemper in the event Superior National is ultimately unable to pay those claims. The new "cut-through" agreement has no effect on claims submitted under previously issued policies, which continue to be processed by Superior National under the Department’s supervision. Also, the new agreement does not diminish the protection available from the insurance guaranty fund that will pay 100% of California workers’ compensation claims should that protection become necessary. In addition to providing "cut-through" endorsements on new and renewal policies issued during conservation, Kemper will also devote management resources to assist the Department in operating Superior National. Kemper will provide management expertise on issues such as underwriting, policy pricing, risk selection and claims administration. Kemper has also expressed a strong interest in participating in a long-term rehabilitation solution for Superior National. Kemper, with 1999 revenues of approximately $3 billion, is a leading provider of property–casualty insurance and risk management services. It operates countrywide and in many foreign markets. For more information about Kemper, visit the company’s website at www.kemperinsurance.com. Conservation Orders were obtained for four of the Superior National affiliated insurance companies in California on Monday, March 6, 2000. The Conservation Orders allow Commissioner Quackenbush to use Department staff to conduct the business of Superior National. The Department was unopposed in the hearings seeking the Conservation Orders. ### © 2000 Superior National Insurance Group - All Rights Reserved
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