Pac Rim Holding Boosts Reserves by $12 Million

Pac Rim Holding Corp. boosted its loss reserves by $12 million to satisfy a state review of its finances and prepare for a pending merger.

As a result, in the quarter that ended Dec. 31, the Woodland Hills-based workers’ compensation insurer posted a net loss of $10.2 million, compared to a net loss of $237,000 the same period a year earlier. Revenues in the latest quarter rose 30% to $26.1 million, up from $20 million a year earlier. For the full year, Pac Rim Holding posted a net loss of $15.9 million, compared to a profit of $575,000 in 1995. Revenues for all of last year rose 13% to $95.2 million, up from $84.6 million in 1995.

In July, the state Department of Insurance began an examination of Pacific Rim. In December, it told the company that approval of a pending merger with Superior National Insurance Group Inc. would depend on completing its examination.

Pacific Rim eventually reached an agreement with the Department of Insurance to boost its loss reserves by $12 million. Due to this step, Pacific Rim and Superior National Insurance amended terms of the deal. The new contract calls for Pacific Rim to be sold for $42 million, compared to its earlier sales agreement of $54 million.

Pacific Rim said it expects the Department of Insurance to soon approve the deal with Superior National.