Calif. insurer's president quits after posting of loss

October 29, 1994|By Bloomberg Business News

20th Century Industries said yesterday that President James Curley resigned "to pursue other interests," three days after the insurer announced a $449.4 million loss for the first three quarters.

Separately, the company said it will appeal to the U.S. Supreme Court a decision in August by the California Supreme Court requiring 20th Century to pay $120 million in consumer refunds. Yesterday, a Superior Court judge in Los Angeles agreed to consider the company's request to delay the refunds, pending the outcome of its petition to the Supreme Court.

Mr. Curley, 52, who also resigned from 20th Century's board, won't be replaced, the company said. His duties will be assumed by CEO Neil Ashley and William Mellick, chief operating officer. Mr. Curley's resignation is effective Monday.

"I'm not aware of what Mr. Curley's future plans are," Rick Dinon, vice president, said in a telephone interview. "This has been a very difficult year for the company."

The company's stock closed at $12.125, down 12.5 cents. It's down 59 percent from a 52-week high of $29.625 reached Nov. 1.

When it lost the court case on the refunds, the Woodland Hills, Calif.-based insurer was already on the verge of insolvency because of $815 million in casualty losses from January's earthquake, centered in the Los Angeles suburb of Northridge.

Almost two-thirds of 20th Century's capital was wiped out by claims. The company suspended its dividend, and rating companies downgraded their opinions on the company's ability to pay claims.

On Aug. 19, the California Supreme Court reinstated a lower court order requiring 20th Century to pay about $120 million in refunds to California consumers due under Proposition 103, a 1988 insurance reform measure.

California Superior Court Judge Dzintra Janavs yesterday scheduled a hearing Nov. 10 to consider the company's request for permission to delay sending out refunds.

Last month, American International Group Inc., a New York insurer, agreed to bail out 20th Century with an investment of at least $216 million, subject to shareholder and regulatory approval.

On Monday, 20th Century said it lost $449.4 million, or $8.74 a share, for the first nine months, compared with a profit of $89.8 million, or $1.75 a share, a year ago. Revenue increased to $891.9 million, from $817.3 million.

20th Century is pulling out of the homeowner and earthquake insurance markets in the next three years, leaving it to rely heavily on auto insurance.

It developed a strong niche over the years selling low-priced insurance directly to consumers, without agents. It kept rates low by only accepting drivers with good records and maintaining strict underwriting rules, such as refusing to insure sports cars.

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