Quarter Earnings Drop for Amwest Insurance
Amwest Insurance Group, a Woodland Hills insurance holding company, said a Dec. 14 California State Supreme Court decision will result in decreased earnings for the fourth quarter that ends Sunday.
State lawmakers exempted Amwest and other companies from the provisions of Proposition 103, an insurance reform initiative approved by voters in 1988.
But the recent unanimous court ruling paved the way for $100 million in premium rollbacks to insurance customers with surety policies.
The 20% rollback, which applies to premiums written in 1989, will result in Amwest taking a one-time-only charge in the fourth quarter. The amount is still being calculated by state regulators, said Steven Kay, Amwest chief financial officer.
The court ruled that the exemption can be lifted because lawmakers acted illegally. An initiative cannot be altered without clear authorization from voters, the court said.
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