2 More Ailing Workers’ Comp Insurers Seized

State regulators seized two more workers’ compensation insurance companies Friday as the industry continued to reel from deregulation-related turmoil.

The California Department of Insurance said HIH America Compensation and Liability Insurance Co. and Great States Insurance Co., affiliated companies that are based in San Francisco, were insolvent and unable to meet the state’s minimum capital requirements.

The two companies, which have branch offices in Sacramento and Irvine, stopped accepting new business in October, said Deputy Commissioner Scott Edelen. Their Australian parent, HIH Insurance Ltd., had planned for the two companies to eventually go out of business.

But regulatory examinations found the companies were already insolvent. HIH’s liabilities exceeded its $176.3 million in assets by $39.5 million, and Great States owed $15.3 million more than its $76.1 million in assets.

Regulators said all injured workers’ claims would be paid and that there would be no interruption in their coverage.

Last year, the department took over Calabasas-based Superior National Insurance Co. and increased regulatory supervision of Glendale-based Fremont Compensation Insurance Group. California workers’ compensation insurers have suffered severe losses because of price wars that followed deregulation of the market in the early 1990s.