In late 2000, Fremont's workers' compensation insurance subsidiaries entered into an agreement with the California Department of Insurance providing for increased regulatory oversight and supervision. The A.M. Best rating was downgraded to "E" to reflect the fact that the workers' compensation businesses were under regulatory supervision.

Fremont General's filings with the Securities and Exchange Commission describe the subsequent restructuring of its workers' compensation insurance business and a fronting agreement that Fremont reached with Clarendon Insurance Group in the second quarter of 2001. That agreement provided Fremont's insurance businesses with the ability to issue workers' compensation new and renewal policies with an "A"-rating.

As of October 31, 2001, a total of $53.2 million in estimated gross annual premium was in force under the fronting facility, according to the company's filings.

Currently, Fremont General is focusing its attention and resources on its financial services businesses, including it's industrial bank, Fremont Investment & Loan, the company said in today's announcement. The company also reported net income of $60.5 million, or 93 cents per share, for 2001.