Western General Insurance Company: Frequently Asked Questions
On August 5, 2021 the California Insurance Commissioner was appointed statutory Liquidator of Western General Insurance Company ("WGIC") by order of the Los Angeles County Superior Court ("the Court"). This action was initiated in order to protect policyholders, claimants, creditors and the public from further harm which might be caused by WGIC's continued operation. The Commissioner, through his Conservation and Liquidation Office, is authorized and charged with the responsibility to liquidate WGIC and its assets for the benefit of WIGC's claimants, creditors and shareholder as provided by the California Insurance Code. The entry of the liquidation order with a finding of insolvency triggers the obligations of the various insurance guaranty associations in the states where WGIC wrote coverage.
Q. Why did I receive this notice?
A. You have been identified as a policyholder, claimant, insured, broker, agent or creditor of WGIC and therefore have received this notice to inform you of the formal liquidation of WGIC. Other possible parties in interest: Reinsurer, a Vendor to WGIC, an Attorney representing WGIC.
Q. Why was WGIC placed into liquidation?
A. WGIC was placed into liquidation by the Court and now operates under the authority of the California Insurance Commissioner as liquidator because the company was unable to meet its financial obligations as they became due and was found to be operating in a hazardous financial condition. The Commissioner was appointed statutory liquidator of WGIC to preserve and protect the assets of the company for the benefit of policyholders, creditors and shareholders.
Liquidation is similar to bankruptcy in that the liquidation order directs the Commissioner to take the necessary steps to liquidate (wind-up the affairs of) WGIC under the supervision of the Court.
Q. Will my insurance claim payments continue to be paid?
A. WGIC policy claims may be eligible for coverage from the various Insurance Guaranty Associations in the states where WGIC wrote business. Upon entry of the liquidation order all of WGIC's open claims will be transferred immediately to the respective guaranty associations for consideration.
Q. What is a Guaranty Association and what does it do?
A. Insurance Guaranty Associations are entities created by state law to provide protection to policyholders and claimants in the event of a member insurer's insolvency. The state laws that create the guaranty associations also have limitations and other eligibility requirements, including certain limitations on the amount of coverage available or the types of policyholders and claims covered by the respective guaranty associations.
Q. Will my claim(s) be paid in full by the insurance guaranty associations?
A. By law each state's guaranty association will have maximum benefit limitations and will need to determine if a claim is covered by guaranty association statutes and by the WGIC policy. If that coverage determination results in any portion of the claim not being covered by the guaranty association, any unpaid portion will continue to be a claim against the remaining assets of WGIC subject to a Proof of Claim ("POC") process. Following is the contact information for those guaranty associations where WGIC had open claims at the time of the liquidation:
If you are a WGIC California Policyholder or a Third-party Claimant in California contact:
If you are a WGIC Colorado Policyholder or a Third-party Claimant in Colorado contact:
Colorado Insurance Guaranty Association
c/o Western Guaranty Fund Services
1873 S. Bellaire Street #920
Denver, CO 80222-4386
800-303-7565 or 303-759-5066 (office) 303-759-5312 (fax)
If you are a WGIC Texas Policyholder or a Third-party Claimant in Texas contact:
Q. What will happen to my active policy with WGIC?
A. All active WGIC insurance policies are required by law to be cancelled effective 30 days from the date of the liquidation order. The respective guaranty associations in the states where WGIC wrote business are responsible to pay any unearned premium that is due back to insureds for coverage that extends beyond the cancellation date.
Insureds are encouraged to work with their insurance brokers to replace your WGIC insurance coverage immediately.
Q. Who do I call if I have additional questions?
A. Please continue to call WGIC at 800-758-3311 and also additional information can be obtained on the WGIC website at http://www.westerngeneral.com. You may also contact your insurance broker for questions about your policy and /or securing replacement coverage.
NOTE: Policyholders (including claims for unearned premium) are not required to file a POC since their claim is automatically deemed filed by the Liquidator. Additional information concerning the POC process will be made available on the CLO website;www.caclo.org/wgic
Q. I am not a policyholder and I am not a third-party claimant. I am a creditor. What does this Liquidation mean for me?
A. The Liquidator will continue to marshal and preserve all company assets for the benefit of all persons that might have an interest in the assets of the insolvent insurance company. Over the next number of weeks, the Liquidator will be determining the essential services necessary to properly address the requirements of the liquidation.
If you have a claim against WGIC and wish to pursue recovery of that claim, you must file a POC by the court mandated Claims Bar Date of February 28, 2022 for your claim to be considered in one of the priority creditor classes.
Q: What happens to my general creditor ("non-policy related") claim against WGIC?
A: The Liquidation Order provides legal protections for WGIC against certain conduct. All creditors should read the Liquidation Order carefully as there are restrictions, including penalties, for violations of the statutory legal protections. As a result of the entry of the Liquidation Order WGIC is unable to pay its claims at this time. Over time the Liquidator will monetize the remaining assets of WGIC and evaluate the claims asserted against WGIC. Once the Liquidator evaluates all claims asserted against the estate, the Liquidator will make recommendations to the Court. Once the process of liquidating WGIC's assets and determining the estate's liabilities is complete, the remaining available assets will be distributed to classes of claimants with approved POCs in the legal priority established in the California Insurance Code.
Q. What happens if I want to bring a lawsuit against WGIC?
A. In accordance with the terms of the Liquidation Order, except with the consent of the Court and after a hearing in which the Liquidator had reasonable notice, no action at law or equity or in arbitration shall be brought against WGIC or the Liquidator, whether in California or elsewhere, nor shall any existing actions be maintained or further presented after entry of the Liquidation Order. The Liquidator may intervene in any action against WGIC in order to protect WGIC's assets.
If your lawsuit is against a WGIC policyholder or insured, then - at the election of the responsible guaranty association - that association may seek a stay of that litigation until such a time as the claim files and information related to that litigation are received by the guaranty association and the claim is evaluated for coverage.
