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20th Century Sues Over Garamendi Rebate Order

REGIONAL ROUNDUP

November 19, 1991

20th Century Industries filed suit last week against the state Department of Insurance, challenging Insurance Commissioner John Garamendi's order that the Woodland Hills-based insurer give back $106.5 million to its policyholders as part of Proposition 103.

Garamendi issued a statement calling 20th Century an "insurance outlaw" that is making a "disgraceful attempt" to avoid his order.

In the suit, filed Wednesday in Superior Court in San Francisco, 20th Century complains it does not expect a "full and fair" hearing when it challenges the order in administrative hearings before Garamendi, which are scheduled to begin next month. It also seeks clarification of Garamendi's power to order such a rebate.

Garamendi last month ordered 20th Century, the holding company for 20th Century Insurance, and 13 other insurers to rebate a combined $1.5 billion to their auto and home insurance policyholders. The order resulted from Proposition 103, the insurance-reform measure passed by California voters in 1988.

20th Century previously has called the order "confiscatory and therefore unconstitutional." Several other insurers also have filed suits challenging Garamendi's order.

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