A hush-hush plan to convert CompSource Mutual to a stock company has been challenged by a policyholder and a law firm who argue the proposal for Oklahoma’s largest workers’ comp insurer amounts to a raid on CompSource’s $1 billion surplus for an aggressive expansion plan.
A class-action lawsuit, brought by Oklahoma City law firm Whitten Burrage, ongoing for four years, alleges that CompSource’s $1 billion surplus holdings have accrued, at least in part, from decades of bundling of phantom policies that never pay out on claims.
Speaking through statements issued by a public relations firm, CompSource claimed to have no intention to sell shares in the new company. However, the statements masked a complicated reorganization scheme that would give a subsidiary of the newly formed company the ability to issue shares…