Calif. Insurance Regulators Seek Dismissal of Applied Underwriters Lawsuit

SACRAMENTO, Calif. — California insurance regulators have moved to dismiss a lawsuit in which Applied Underwriters Inc. (AUI) accuses them of unlawfully planning to shut down its former affiliate, California Insurance Co. (CIC), as part of a long-running “vendetta” involving AUI’s “EquityComp” workers’ compensation program.

In a Nov. 17 motion filed in the U.S. District Court for the Eastern District of California, defendants contend that federal jurisdiction is lacking because it would upset “the delicate balance between federal and state court systems.” They further argue that plaintiffs have failed to adequately plead violations of their constitutional rights.

AUI and its …