BANKING / FINANCE

Executives at Earthquake Mutual Insurance Corp. in Costa Mesa are negotiating with a number of insurance firms as they attempt to attract their first customers.

Formed earlier this year, EMIC is the nation’s first insurance company devoted exclusively to covering losses from earthquakes. Its founders figured insurance carriers would be eager to lay off the risk of loss in homeowner policies for earthquake damage.

“We’re at the point where we’ve done all the talking and all the presenting, and now we’ve got to identify the carriers in need of this kind of service,” said David L. Morris, vice president for marketing.

But EMIC is having a few problems getting that first carrier to sign on, even though the firm has lined up $65 million worth of reinsurance from domestic and London-based companies to protect itself from major losses.

Recently, EMIC put on an all-day meeting for about 20 insurance executives to explain how the firm operates and to list benefits that the carriers could receive.

Included in the meeting were representatives from Farmers, Transamerica, California Casualty and Western Mutual insurance carriers, Morris said.

One stumbling block is that EMIC needs $20 million in reserves, which is what it hopes to get from carriers who transfer their earthquake risks to the firm.

So far, no carrier has signed on.

“If it goes past three or four months (without signing up customers), the $65 million goes to the wind,” Morris said. “The commitments in London, though, are somewhat flexible. They’re not cutting us off at midnight on Jan. 1.”