NEW YORK (CNN/Money) - Concerns about Arthur Andersen LLP's ability to pay damages arising out of the Enron collapse are being raised after the auditor missed a $100 million premium payment to a Bermuda insurance company which it intended to use to pay $217 million to settle an Arizona fraud case.

The Wall Street Journal, citing unnamed people familiar with the matter, reported Monday that the missed premium placed the Professional Services Insurance Co. into insolvency. The fraud case involved the Baptist Foundation of Arizona, which Andersen had been auditing since 1984, and which filed for Chapter 11 bankruptcy protection in 1999. The $217 million settlement had been the largest agreed to by a Big Five accountant not related to the savings and loan crisis, but Andersen backed out of the settlement on Friday, citing the insurer's inability to pay.

The Journal said the missed payment underscores Andersen's precarious financial position. It reported an e-mail sent Friday to all U.S. partners from one unnamed U.S. partner which suggested the accounting firm may itself be insolvent.

"I ask you -- are we insolvent and just not recognizing it?" the Journal quotes the e-mail as saying. "Equally important, at what point does one of our creditors realize this situation and file involuntary bankruptcy against us?"

The paper quotes Andersen spokesman Patrick Dorton as saying the Chicago-based accounting firm has no intention to file for bankruptcy protection. The company has been losing major clients in recent weeks and large-scale layoffs are expected soon, perhaps as early as this week.