PAULA Insurance Put In Conservation
NU Online News Service, May 2, 10:12 a.m. EST?California Insurance Commissioner Harry Low applied for, and was granted, a conservation order for PAULA Insurance Company by the Los Angeles County Superior Court last week.
The insurance department said that the 2001 annual statement for the Pasadena-based company, filed on March 1, reported a negative policyholders' surplus of $22 million, which means PAULA Insurance Company is statutorily insolvent.
In late February, PAULA Financial had announced that its workers' compensation insurance subsidiary, PAULA Insurance Company, would voluntarily cease underwriting workers' comp, attributing the decision to claims reserve developments.
The conservation order granted by the court enables the commissioner to conduct the business of the company with the staff of the department's Conservation & Liquidation Office.
The department said that the offices of PAULA Insurance Company will remain open during normal business hours while the department manages the company, and that all claims will be paid in full and on time without interruption in policyholder coverage, during the conservation.
The department said that those with questions about coverage may call the California Department of Insurance Consumer Hotline at (800) 927-HELP.
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