Alistar Receives ‘R’ Rating but Fights Hard to Stay Alive
By Michelle Logsdon - April 23, 2002Alistar Insurance Co. received an ‘R’ rating from Standard & Poor’s April 23. The rating is based on the fact that the Fresno County Superior Court recently granted the California Department of Insurance (CDI) a conservation order for Alistar.
The Fresno-based workers’ compensation carrier voluntarily submitted to a CDI takeover April 11. Mark Pasculli, Alistar’s interim president and CEO, told adjustercom.com that the CDI and Alistar are working in conjunction on a rehabilitation plan.
That plan involves pulling Alistar out of the workers’ compensation and automobile insurance markets to focus on surety bonds. “The program we’re running right now in conservation is a bond program and so far that has been profitable,” said Pasculli.
It’s safer for a smaller company to work with lower risk insurance products like surety bonds, according to Pasculli. “The workers’ compensation market can be pretty volatile.”
Vahan Chamlian formed Alistar in 1995 and entered the property/casualty workers’ compensation market at a pivotal point in time. California had just introduced an open-rating system and price wars ensued. The stiff competition, and the rising cost of claims due to higher medical costs led to Alistar’s insolvency.
In November 2001, the company informed the CDI of its capital and surplus. The annual statement for Alistar, filed March 31, 2002, showed the company at $939,000 in policyholder surplus. For the classes of insurance that Alistar is licensed to transact, the minimum amount for that surplus is set at $1,950,000. CDI investigators also found that Alistar was under-reserved by $4 million.
Alistar is domiciled in California with one office in Fresno. Currently, the company employs four claims adjusters. Pasculli said as long as Alistar is working closely with the CDI on the rehabilitation plan that office will remain open for business as usual.
Those adjusters are working on approximately 430 workers’ comp claims in run-off. A third-party administrator, CenCal Insurance Services in Danville, is handling the automobile claims. | 
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