Continued improvement is needed in the administration of conserved and liquidated insurers.
During conservation, an insurance company is placed under courtordered control to conserve the insurer's assets until the insurer's status is determined by the courts. After completing this procedure, the commissioner is required by the California Insurance Code to apply for a court order to distribute the liquidated company's assets to the policyholders, creditors, and other groups owed by the insurer. After final distribution of the assets takes place and the CLO makes a declaration of that fact to the court, the closure of the insurer is complete. We found that the division had not developed either a strategic plan for the conservation and liquidation of conserved insurers or management plans to close the estates of those insurers under its control. Further, we reported that the division had not developed adequate administrative practices to control effectively its costs for conservation and liquidation activities.