The insurance regulator in California decided to take over a failing insurance company to protect policyholders including those affected by the massive wildfire in Butte County.
On Friday, The California Department of Insurance filed a legal action to secure the assets and take control of Merced Property & Casualty Company. The regulator’s action comes after reviewing the insurer’s financial records and found that it was insolvent.
Merced Property & Casualty Company incurred significant losses due to the Camp Fire, the deadliest and most destructive wildfire in the history of California. The Camp Fire destroyed 18,793 structures including 13,696 single-family homes, 276 apartment buildings, and 528 commercial buildings. The wildfire claimed the lives of 88 people.
Insurer does not have sufficient liquid assets to pay up all claims
The failing insurance company is incapable of paying up all claims because it does not have sufficient liquid assets. It is also impossible to rehabilitate the business.
