Best Affirms and Withdraws Ratings of Rosemont Re

November 8, 2005

  • November 8, 2005 at 1:54 am
    dot_hemath says:
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    Will someone please educate me about how a downgrade affects a company\’s ability to earn the existing unearned premium?

  • November 8, 2005 at 2:30 am
    broker says:
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    There are typically rating clauses in the reinsurance agreements that allow the cedants to cancel the deals mid-term in the event of rating downgrades below a certain level. They could technically earn the premiums unless a company invokes such a clause.

  • November 8, 2005 at 3:15 am
    dot_hemath says:
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    OK, so they might have to RETURN unearned premium (along with associated exposure to future losses). Perhaps not such a bad thing.



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