CDI Ends Applied Underwriters’ ‘Bait-And-Switch’ Practices in California

Last week, the California Department of Insurance (CDI) reached a settlement agreement with Applied Underwriters, holding the Berkshire Hathaway subsidiary accountable and ending its bait-and-switch marketing tactics to sell its workers’ compensation products. Applied Underwriters has agreed to drop its petition to block the CDI’s enforcement action and come into compliance with well recognized state filing requirements.

Applied Underwriters’ products has spurred a wave of litigation and enforcement actions from regulators in multiple states, including Vermont, Wisconsin and New York. In the California cases Luxor Cabs v. Applied Underwriters Captive Risk Assurance Company—which was successfully handled by RPNA—and Shasta Linen Supply, Inc. v. Applied Underwriters, Inc., the courts ruled against Applied Underwriters, voiding its EquityComp Reinsurance Participation Agreement since it was not filed with the CDI and was therefore unenforceable.