Northridge Quake Claims to Reach $900 Million, 20th Century Expects
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20th Century Industries Inc. said it now expects claims related to last January’s Los Angeles earthquake to be $900 million, up from the $815 million estimated two months ago.
The Woodland Hills insurer said it will have access to the money through its planned sale of preferred stock and warrants representing up to a 40% stake in the company to New York-based American International Group Inc.
As of Wednesday, the company had paid $722 million to its customers for earthquake damages and expenses. In addition, the company paid $46 million for claim adjustment expenses, mainly for independent adjuster services.
The company will hold a special shareholder meeting Thursday to approve its capitalization plan with American International Group. Shareholder approval is anticipated. The plan won approval from state regulators.
Under the plan, 20th Century will receive $216 million in cash in return for convertible preferred stock and warrants.
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