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Jan. 14-- Twenty-seven years after it went broke, Missouri insurance regulators have finally wrapped up the controversial case of Transit Casualty Co.. It had moved to Los Angeles by 1985, when it was found insolvent, but it remained under the jurisdiction of Missouri insurance regulators. In 2001, the Post-Dispatch won a three-year legal battle to discover the...
Jan. 14--Twenty-seven years after it went broke, Missouri insurance regulators have finally wrapped up the controversial case of Transit Casualty Co.
A Cole County judge last week declared the receivership over, ending a case that left claimants waiting for decades for payment while receivers and others made millions of dollars administering the mess.
Missouri Insurance Director John Huff said the department secured enough assets to pay 87 percent of claims. State insurance guarantee associations paid the other 13 percent.
Transit Casualty was founded in 1945 in St. Louis as an insurer of bus companies. It had moved to Los Angeles by 1985, when it was found insolvent, but it remained under the jurisdiction of Missouri insurance regulators.
In 2001, the Post-Dispatch won a three-year legal battle to discover the compensation paid to receiver J. Burleigh Arnold, a lawyer and Democratic Party activist who had been appointed to the job by the administration of Republican Gov. John Ashcroft.
Arnold had been paid $14 million in salary and bonuses from 1987 through 2001. He worked under the supervision of his friend, then Cole County Circuit Judge Byron Kinder.
The long delay in settling he case was blamed on trouble collecting from more than 1,000 reinsurance firms, and in resolving long-running claims for problems such as asbestos or environmental cleanups. For a fee, reinsurance firms take on part of the responsibility for paying claims.
Transit Casualty was the second-longest receivership in Missouri history.
The Department of Insurance also ended the receivership of International Financial Services Life Insurance Co., which failed in 1999. All policy claims were paid, the department said.
When an insurance company fails, a court can order state regulators to take over the company to protect policy holders and creditors.
Huff said a receivership often take many years, but it provides an orderly process for winding down the business while protecting consumers.
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