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Ohio places Credit General into financial rehabilitation
On Dec. 12, 2000, the Ohio Department of Insurance (DOI) received an order from Franklin County Court of Common Pleas to place Credit General Insurance Co., into liquidation. The order triggers the participation of state guaranty funds, which, along with assets of the company, will substantially cover all benefit payments to policyholders.
Alleged criminal diversion of funds and a shaky financial condition contributed to Credit General Insurance Co.'s situation.
The DOI filed an order with the Franklin County Court of Common Pleas on Nov. 7 stating that an extensive investigation into Credit General's "deteriorated financial condition" proved the company to be insolvent.
The DOI alleges that Credit General was in financial trouble in part because it was neglected by its parent company PRS Insurance Group, which failed to pay money due to Credit General, and because reinsurers failed to pay their share of claims. In addition, the order alleges that funds belonging to Credit General were diverted in potentially criminal actions by the company's officers.
Credit General operated in 44 states selling high-risk workers compensation policies, contractor's liability policies, and surety bonds.