Pennsylvania insurance regulators are seeking to place troubled Mutual Risk Management Ltd. subsidiary Legion Insurance Company in liquidation.

The news follows Legion being taken over by state insurance regulators earlier this year and is one more piece of bad news for the flailing insurance and financial services company.

During the year Mutual (MRM) has seen its stock plummet to pennies, its delisting from the New York Stock Exchange, numerous rating downgrades and the launch of several class action lawsuits by disgruntled investors. The company's stock closed at three cents on the Over the Counter market Tuesday in contrast to its 52-week high in October of $23.56. The class action suits, which are in addition to other legal actions facing MRM and its subsidiaries, followed the stock's performance and target Mutual Risk Management, with shareholders contending the company's officers issued misleading financial statements that overstated the company's revenue and net income.

The Milwaukee Journal Sentinel reported this week that, Legion, which was placed in "rehabilitation" last April, has not written any new policies since then. Roseanne T. Placey, spokeswoman for the Pennsylvania Insurance Department's Office of Policy, Enforcement and Administration in Harrisburg, Pennsylvania, confirmed that regulators are seeking to place the insurance firm in liquidation, the newspaper said.

She said officials could not comment on details of the case until a judge signs the liquidation order. But general guidelines for the Pennsylvania Insurance Department state that "an order of liquidation normally terminates the company's existence."

Legion sells commercial insurance, such as workers' compensation, medical malpractice, general liability and group accident and health coverage. No new policies have been issued since the Pennsylvania insurance commissioner took control of the company. The Pennsylvania Insurance Department indicated they took over the companies in April when Legion and Villanova ran into trouble after the insurance-rating firm AM Best Co. had concerns about losses posted by Mutual Risk Management's US insurance subsidiaries and lowered its ratings on them.

Mutual Risk Management reported a loss of $99.2 million in 2001. That came after a loss of $5.6 million in 2000. After the ratings downgrade, the flow of new business to Legion and Villanova dried up and helped to create a liquidity problem, a department spokeswoman said last spring. A number of other ratings agencies also lowered their ranking of MRM and its insurance subsidiaries. In addition, the company was hurt by lagging payments to insurance subsidiaries by reinsurers hit by September 11 terrorist claims, the department said.