Delaware Firm Would Assume Policies : Officials Reportedly Near Mission Insurance Deal

California officials said Tuesday that they are close to striking a deal under which insurance policies written by insolvent Mission American Insurance will be turned over to a Delaware company eager to enter the state’s lucrative workers’ compensation insurance market.

Insurance Commissioner Roxani Gillespie said a “definitive plan” to transfer the business without liquidating Mission American--the sole survivor of once-flourishing Mission Insurance Group--could be reached within 30 days. Meanwhile, she said, National American Insurance of California has agreed to renew Mission American policies expiring after June 1.

National American is a subsidiary of Kramer Capital Partners, a Delaware-chartered limited partnership, she said in a brief statement issued by the department.

Lack of Procedure

Although Mission American stopped issuing policies Jan. 30, there has been no procedure to assure continued coverage as policies expire, according to William S. Price, the former insurance executive appointed by the state to run Mission American, which the state took over Feb. 2.

He said the Kramer organization became interested in Mission American as a quick means of entering the workers’ compensation insurance market in the West.

Under the interim agreement announced Tuesday, National American will pay Mission American commissions and “other considerations” for the policies it renews, Gillespie said, adding: “All parties will continue working on a rehabilitation plan which will benefit all Mission American policyholders.”

The renewal agreement represents the “first phase” of a potential rehabilitation plan that would transfer Mission American’s assets and liabilities to another company, Price said in an interview.

Mission American would then disappear as an operating company but, instead of being liquidated, as the other Mission subsidiaries are, it would remain as an investor in the Kramer operation through a distribution of stock based on the company’s value.

Fund Paying Claims

Meanwhile, the industry-funded California Insurance Guarantee Assn. continues paying claims for the four Mission subsidiaries being liquidated, according to John Gates, the association’s executive director. “We’re paying claims very rapidly over here,” Gates said.

Gates said he is unable to estimate total claims paid so far, pending compilation of April’s results, but that the sum “is substantial.”