PAULA INS. CO. DOWNGRADED

The “Bpi” financial strength rating on Pasadena, Calif.-based PAULA Insurance Co. was lowered to “CCCpi” by S&P. Major rating factors include the company’s declining surplus level; highly unfavorable recent reserve development; sustained high leverage; and continued marginal operating performance. PAULA Insurance, a member of PAULA Insurance Group and owned by PAULA Financial, mainly writes workers’ comp coverage for agribusiness located throughout California, Arizona, Oregon, Alaska, Idaho, Texas, Florida, New Mexico and Nevada. More than 60 percent of the company’s revenue is derived from California. The rating does not include additional credit for implied group support.