Amwest Insurance Group Expects 4th-Quarter Loss

Amwest Insurance Group, a Woodland Hills provider of bail bonds and other surety bonds, said it expects to report a loss of between $750,000 and $1 million for the fourth quarter of 1989.

Amwest blamed the deficit in part on numerous claims made against contractors’ bonds underwritten by Amwest. When it issues such bonds, Amwest promises to pay to finish a construction project if the contractor can’t finish it for any reason. The bonds at issue were partially guaranteed by the U.S. Small Business Administration, but the claims still helped produce a loss, Amwest said.

The loss also will reflect additional reserves that Amwest has been setting aside because of Proposition 103, an insurance-reform measure whose implementation is still being debated by state authorities. A key part of the measure is a rollback in customers’ premiums, and Amwest has created the reserves in the event it must pay rebates.

For all of 1989, Amwest said, it expects to post a profit of $1.31 million to $1.59 million, down from earnings of $3.62 million in 1988. The exact figures should be released in mid-February, Amwest said.