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A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘B’ (Fair) and issuer credit rating of “bb” of Oklahoma’s General Agents Insurance Company of America, Inc. Both ratings have been removed from under review with positive implications and assigned a stable outlook. At the same time Best withdrew the ratings and assigned a category NR-5 (Not Formally Followed) to General Agents of America. “Effective November 1, 2007, GAINSCO, INC. and MGA Insurance Company of Dallas, TX sold General Agents of America to Montpelier Re U.S. Holdings Ltd., a subsidiary of Montpelier Re Holdings Ltd. (Hamilton, Bermuda) as a shell with all prior liabilities assumed by MGA,” Best explained. “Under the new ownership, the company will be renamed Montpelier US Insurance Company.” General Agents of America had been a wholly owned stock subsidiary of GAINSCO, INC. and a member of the General Agents Group. The FSR of ‘B’ (Fair) for MGA, which was also a member of General Agents Group, is unaffected by this sale.
Standard & Poor’s Ratings Services has lowered its counterparty credit rating on Torchmark Corp. to ‘A’ from ‘A+’. S&P also lowered its counterparty credit and financial strength ratings on Torchmark’s strategically important subsidiaries, American Income Life Insurance Co., United American Insurance Co., Globe Life & Accident Insurance Co., and Liberty National Insurance Co. to ‘AA-‘ from ‘AA’ and lowered the counterparty credit and financial strength ratings on United Investors Life Insurance Co., considered not strategically important, to ‘A’ from ‘A+’. The outlook for all the ratings is stable. “These downgrades reflect the group’s weakened competitive position following the second year of slowing of growth in its new sales, which are across multiple distribution sources,” explained S&P credit analyst Kevin Maher. The ratings on Torchmark also reflect its extremely strong operating performance and very strong operating company capitalization.
A.M. Best Co. has downgraded the financial strength rating (FSR) to B (Fair) from B+ (Good) and issuer credit rating (ICR) to “bb” from “bbb-” of Philadelphia-based PMA Capital Insurance Company (PMACIC) and assigned the ratings a negative outlook. Best also affirmed the ICR of “bb” of PMACIC’ s parent, PMA Capital Corporation of Blue Bell, PA) and the FSR of ‘A-‘ (Excellent) and ICRs of “a-” of PMA Insurance Group and its members. The outlook for these ratings is stable. Concurrently, Best has affirmed the debt and indicative ratings of PMA Capital and PMA Capital Trust I and II. “The downgrading of PMACIC’ s ratings reflects the significant reduction in its stand-alone capitalization due to the combined impact of the third quarter reserve charge related to a limited number of ceding companies on PMACIC’ s claims made general liability business, primarily related to professional liability claims from accident years 2001-2003 and the planned commutation of an adverse development cover in fourth quarter 2007, which will further increase PMACIC’ s reserve liability, Best explained. “These events follow the withdrawal of extraordinary dividends by PMA Capital, which had previously reduced excess surplus within its run-off operations.”