S&P Lowers PAULA Insurance Co. Rating to ‘R’

Standard & Poor’s said it revised its financial strength rating on PAULA Insurance Co. to ‘R’ because of insolvency.

On April 26, 2002, PAULA Insurance Co. was placed under an order of conservation by the Los Angeles County Superior Court, which was granted to California Commissioner of Insurance Harry W. Low. The order of conservation was filed because PAULA Insurance Co. reported a negative policyholders surplus of more than $22 million thus making it insolvent. The Conservation & Liquidation Office will manage PAULA Insurance Co. paying all claims in full and on time.

PAULA Insurance Co. underwrites workers’ compensation and employment practices liability insurance with specialization in the agribusiness industry.

An insurer rated ‘R’ is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the regulators may have the power to favor one class of obligations over others or pay some obligations and not others. The rating does not apply to insurers subject only to nonfinancial actions such as market conduct violations.