Best Downgrades Paula Financial

A.M. Best Co. has downgraded the financial strength rating to D (Poor) from B- (Fair) for PAULA Insurance Company (PAULA), Pasadena, California, a subsidiary of PAULA Financial (NASDAQ: PFCO), and removed it from under review. The rating had been under review since March 9, 2001, due to uncertainty regarding the company's recapitalization plans following a series of significant year-end reserve charges and the resulting deterioration in policyholder surplus. The downgrade follows the February 28, 2002, announcement by PAULA Financial that PAULA will post a reserve charge of $37 million in ...