![]() What happens when a company is liquidated? See Insurance Code Section 1011 for the full list of reasons. There are many different reasons, but the most common is that the company is in financial trouble such that its further transaction of business would be hazardous to its policyholders, or creditors, or to the public. Why does the Commissioner conserve an insurance company? The CLO was created by the Commissioner to assist him in fulfilling his duties as a court-appointed Conservator and Liquidator. ![]() The Conservation & Liquidation Office ("CLO") is comprised of insurance professionals, e.g., Claims Officer, Reinsurance Officer, Chief Financial Officer, Information Technology Officer, etc., who oversee departments that operate and liquidate insurance companies. What is the "Conservation & Liquidation Office"? ![]() A company that is in conservation or liquidation is called an "estate". ![]() Liquidation usually occurs after conservation and after the Commissioner has determined that the insurance company cannot be rehabilitated and that it would be futile to continue with the conservation. During liquidation, the Commissioner sells the company's assets, e.g., furniture, fixtures, equipment, in order to generate cash to pay policyholders' claims and other creditors. "Liquidation" is the process whereby the Commissioner, upon a Superior Court's order, terminates an insurance company's insurance business by canceling all insurance policies and by not issuing any new or renewal policies. During conservation, one of the Commissioner's main duties is to conduct a thorough examination of the insurance company's books and records to determine whether the company can be rehabilitated so that it may continue operating as a "regular" insurance company (i.e., without the day-to-day management by the Commissioner). As a court-appointed Conservator, the Commissioner may continue as much, or as little, of the insurance business as the Commissioner deems appropriate. There are many different reasons for the Superior Court to issue such a "Conservation Order", but most of the time it is because the insurance company is insolvent, and the Commissioner must operate the company in order to conserve assets for the benefit of policyholders, creditors, and other persons interested in the assets of the company. "Conservation" is when the Insurance Commissioner ("Commissioner"), upon a Superior Court's order, takes over the operations of an insurance company licensed in California. If the receivership involves a California company, additional information may be obtained from the Conservation and Liquidation Office's website.įor more information please visit the CLO web site for a complete list of open estates and list of closed estates.įrequently Asked Questions About Conservation and Liquidation The GRID database maintains receivership information from all U.S. Information regarding companies in receivership may be accessed from the Global Receivership Information Database (GRID) Reports maintained by the National Association of Insurance Commissioners (NAIC). The Conservation & Liquidation Office (CLO) has become one of the premier receivership operations in the country and will continue to manage the affairs of conservatorship and receivership in California for the benefit and protection of policyholders and other creditors interested in the assets of the estates.
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