Amwest to Post Gain Due to Unused Rebate Funds

Amwest Insurance Group Inc., a Woodland Hills provider of bail bonds and other surety bonds, said it will record a onetime gain of $797,000 in the third quarter ending Sept. 30 because of a change in California’s insurance laws.

Amwest had set aside that money in case it, along with auto insurers, was ordered to pay rebates to customers under Proposition 103, the insurance-reform initiative passed by voters on Nov. 8, 1988. Many aspects of that measure, including the rate rollbacks, are being challenged in court.

But under a state law that took effect Sunday, the rate rollbacks do not apply to providers of surety, whose policies are bought mainly to guarantee the performance of a third party, Amwest said. Contractors, for instance, often must post surety bonds in case they fail to complete a development.