State Assumes Control of S & H Insurance

The California Department of Insurance assumed control of a San Diego insurance company Monday because state officials believe the firm is operating in a “financially hazardous” condition.

State regulators took over S & H Insurance Co., with headquarters in Mission Valley, after they discovered that the firm was “paying out more than they were taking in,” said department spokesman Jorge Sandoval.

Sales in the first nine months of 1984 plunged to $12.4 million, after reaching $27 million in 1983, state officials said, adding that they do not know the number of S & H policyholders.

After a conservation order from San Diego Superior Court Judge Thomas Duffy, the department “has become the insurance company--we’re managing the affairs of the company,” Sandoval said.

S & H President Keith D. Griffith would not comment on the takeover.

Despite the silence, Sandoval said that Griffith and his firm have been “real cooperative with us; in fact, he’s been terrific with the department.”

S & H underwrote auto, home, fire, surety, accident and health insurance. The policies now in force will be allowed “to run out,” according to Roxani Gillespie, chief deputy insurance commissioner. “We do not expect any policies to be canceled, and we believe all claims will be paid.”

Ironically, S & H was ordered last Thursday to pay $12 million in compensatory and punitive damages to former S & H executive Frank V. McCullough Sr., who sued for compensation he claims the firm never paid.

The order was part of a $20-million assessment by a Los Angeles Superior Court jury against both S & H and its former parent company, Sperry and Hutchinson Co.