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NY State Workers’ Compensation Board to Start Legal Proceedings Against CRM Holdings

Posted on Oct 10, 2008

CRM Holdings Ltd. received a letter from the New York State Workers’ Compensation Board stating that it planned to start legal proceedings against the company for CRM’s actions as administrator and broker for eight self-insured groups.

CRM Holdings is a provider of workers’ compensation insurance products. According to a filing with the U.S. Securities and Exchange Commission, CRM Holdings responded to the New York State Workers’ Compensation Board’s letter by filing an action in the New York State Supreme Court against the board and the groups.

The company stated that it is seeking judgment from the court that it did not breach its duties to the groups or engage in any self-dealing or deceptive activities. CRM Holdings also said that the New York State Workers’ Compensation Board does not have the legal authority to pursue claims on behalf of the groups.

CRM Holdings is not pursuing any monetary damage. However, if the legal matter does not go in favor of CRM Holdings or if the matter has to be settled, it could negatively impact the company’s financial condition.

The eight self-insured groups involved in this dispute, include the Healthcare Industry Trust of New York, Wholesale and Retail Workers' Compensation Trust of New York and the New York State Association of Cemeteries Trust.

CRM Holdings’ headquarters is in Bermuda and the company’s main business activities include underwriting primary workers' compensation policies, underwriting workers' compensation reinsurance and excess insurance policies, and providing fee-based management and other services to self-insured entities. CRM Holdings offers primary workers' compensation insurance to employers located in the states of California, Arizona, Florida, Nevada, New Jersey, New York, and others. According to CRM Holdings’ website, “the Company reinsures some of the primary business underwritten and provides excess workers' compensation coverage for self-insured organizations. CRM is also a provider of fee-based management services to self-insured groups in California.”