State Takes Over Insurance Firm Hurt by L.A. Riot-Damage Claims
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ANAHEIM — State regulators have taken over operation of AIM Insurance Co., a company that specializes in fire and liability coverage for small businesses that was hurt by excessive claims in the wake of the Los Angeles riots in 1992.
The Anaheim company, which has 4,000 clients and 45 employees, continues operating, however, and is renewing policies and paying claims, state regulators said. It is not writing new policies, however.
The state placed the company in a conservancy last week after its president, Christi Guardiola, and chairman and major shareholder Richard A. Newby both resigned.
State insurance commission officials are reviewing an application by a Delaware holding company to purchase AIM.
Bill Schulz, a spokesman for the insurance commissioner’s office, said Friday that AIM had assets of $20 million and liabilities of $19.2 million at the end of the year--leaving a reserve of just $780,000--considerably lower than the $2.1 million required by regulators.
Most of the shortfall occurred last month when a block of mortgage-backed securities in the company’s reserve fund was devalued from $2.3 million to $1.2 million because of a weakening market for such bonds.
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