California regulators yesterday took control of TMIC Insurance Co., the mortgage insurer that protected much of the property owned by the failed real estate partnerships of Equity Programs Investment Corp.

The action clears the way for TMIC, a subsidiary of Los Angeles-based Ticor, to participate in a reorganization of the EPIC partnerships, most of which filed for bankruptcy in September.

EPIC's troubles last summer triggered the collapse of its parent, Community Savings & Loan of Bethesda.

The reorganization plan calls for TMIC and other companies that insured EPIC mortgages to make cash advances so that the partnerships can resume payments on $1.4 billion worth of defaulted mortgages.

The participation of TMIC, the insurer for more than 40 percent of the EPIC property, had been deemed critical to success of the plan. The plan is scheduled to come before an Alexandria bankruptcy court next week for final approval.

Ticor officials and California regulators said that a plan submitted to a Los Angeles court yesterday would permit TMIC to meet the financial requirements of the EPIC plan, as well as to pay off all of its non-EPIC claims -- a critical concern of the California Insurance Department.

A California regulator said that TMIC, with roughly $306 million in assets, is the third-largest company to be placed into conservatorship by the state's insurance department.

The key part of the rehabilitation plan calls for Ticor to make a $30 million infusion of cash into its mortgage-insurance subsidiary over the next four years. In addition, the conservatorship will allow TMIC to stretch out payment of its claims on its non-EPIC business.

"The capital contributions to TMIC under the rehabilitation plan, coupled with renewal premiums and investment income, are projected to provide sufficient cash so that all expected future policy holder claims will be fully paid with interest under controlled circumstances," said Laddie A. Schmidtbauer, TMIC's president.

Winston V. Morrow, Ticor's chief executive officer, said that TMIC expects to pay approximately $194 million in claims and interest from its EPIC business and a comparable amount from its non-EPIC business. Mortgage-insurance companies protect savings institutions in the event of defaults on the mortgages they hold.

"We were very anxious to join the EPIC workout plan, but the problem was dealing with the non-EPIC liability of TMIC," said Morrow. "We needed the protection of a conservator to make sure that everybody will be paid in full."

Norris W. Clark, chief of the California Insurance Department's financial analysis division, said that without the stretching out of claims called for under the plan, TMIC would probably have "run out of cash before all the claims were settled."

Under the plan, which must be approved by the California state court, all valid claims on most primary mortgage-insurance coverage would be paid on a pro-rated basis over three years, with an 8 percent interest on the deferred claim amount. Savings and loans institutions that invested in EPIC mortgages protected by TMIC would be paid under provisions of the EPIC reorganization plan.