Golden State Mutual Life Insurance Co., the Los Angeles-based company that failed to make a profit for five straight years, was seized by California regulators after the insurer sold assets to cover losses.

Golden State, which operates in 12 states, was served an “order of conservation” and must stop selling new policies immediately, Insurance Commissioner Steve Poizner said today in a statement. The regulator will oversee payment of claims and receipt of premiums as it winds the company down.

Life insurers have reported losses and profit declines in the past year as investments they hold to back policies fell in value. A.M. Best Co., which rates the ability of insurers to pay claims, said in May the investment losses will cause an increasing number of companies to be seized by state regulators this year and next.

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