INSURANCE COMMISSIONER OF THE STATE OF CALIFORNIA V. SUPERIOR NATIONAL INSURANCE COMPANY AND CONSOLIDATED PROCEEDINGS

BS0611974-1

APPLICATION FOR APPROVAL OF REINSURANCE COMMUTATION AND SETTLEMENT AGREEMENTS WITH LGD REINSURANCE CORPORATION AND ENSTAR (US) INC./CIGNA REINSURANCE COMPANY

TENTATIVE RULING

Grant application for approval of both Agreements

DISCUSSION

I. Background

On September 26, 2000, the Insurance Commissioner was appointed as liquidator of the Superior National Insurance Companies, including Superior Pacific (“the Insolvent Insurers”), pursuant to orders appointing the Insurance Commissioner as Liquidator and Restraining Orders. Prior to their insolvency, the Insolvent Insurers entered into a number of reinsurance agreements with various reinsurers to reinsure their workers’ compensation obligations. In an effort to wind up the Insolvent Insurers’ affairs, the Commissioner has negotiated with reinsurers to commute reinsurance agreements, and to fully and fin