Zenith National Gets Calif. Probe Letter
NU Online News Service, Dec. 28, 2:40 p.m. EST?Zenith National Insurance said it received letters of inquiry from the California Department of Insurance seeking information about the company's dealings with its agents and brokers.[@@]
Zenith National, based in Woodland Hills, Calif., said it intends to fully cooperate and respond to the department's inquiry. The company added that it believes its arrangements and dealings with agents and brokers are "in compliance with all applicable statutes and regulations."
According to Zenith National, the California insurance department said it is concerned that the state's insurers could be involved in, or be aware of, some of the abusive practices alleged in a suit against Marsh & McLennan Companies by New York State Attorney General Eliot Spitzer's office.
The suit involves steering and manipulation of the placement of insurance business with carriers in return for payment of profitable volume-driven contingent commissions.
Zenith National also said that the department is requiring some California domestic carriers, including the carrier?s California-domiciled units, to assist in the state regulators' review of sales practices in the insurance industry and the arrangements between insurers and agents and brokers.
Zenith National Insurance, through its subsidiaries Zenith Insurance, ZNAT Insurance and Zenith Star Insurance, underwrites workers' compensation policies as well as reinsurance treaties. More than 2,000 independent agents and brokers, mostly in California and Florida, sell the company's insurance products.
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