S&P Details Actions Taken on ‘Public Information’ Ratings

December 10, 2007

Standard & Poor’s Ratings Services has announced various rating actions on insurance companies with public information (pi) ratings. S&P explained that “ratings with a ‘pi’ subscript are based on an analysis of an issuer’s published financial information, as well as additional information in the public domain, and are provided without fee to investors and to the public.”

However, S&P cautioned that such ratings do not “reflect in-depth meetings with an issuer’s management and are therefore based on less comprehensive information than ratings without a ‘pi’ subscript.” It usually reviews such ratings annually. They may, however, be raised, lowered or withdrawn, as are other ratings.

In addition S&P explained that “public information financial strength ratings are a current opinion of the financial security characteristics of an insurance organization with respect to its ability to pay under its insurance policies and contracts in accordance with their terms. This opinion is not specific to any particular policy or contract, nor does it address the suitability of a particular policy or contract for a specific purpose or purchaser. Furthermore, the opinion does not take into account deductibles, surrender or cancellation penalties, timeliness of payment, nor the likelihood of the use of a defense such as fraud to deny claims.”

The list released by S&P is as follows:

Ratings lowered:– Homesteaders Life Co. and Motorists Life Insurance Co. – counterparty credit rating to ‘BBBpi’ from ‘Api;’ financial strength rating to ‘BBBpi’ from ‘Api.’
— Louisiana Farm Bureau Mutual Insurance Co. – counterparty credit rating to ‘BBpi’ from ‘BBBpi;’ financial strength rating to ‘BBpi’ from ‘BBBpi.’

Ratings raised:
— Amerisafe Group; American Interstate Insurance Co. of GA; Silver Oak Casualty Inc. – counterparty credit rating to ‘BBBpi’ from ‘BBpi;’ financial strength rating to ‘BBBpi’ from ‘BB’pi.’
— Aurora National Life Assurance Co. – counterparty credit rating to ‘BBBpi’ from ‘BBpi;’ financial strength rating to ‘BBBpi’ from ‘BBpi.’
— Country Insurance & Financial Services Group; Country Mutual Insurance Co.; Middlesex Mutual Assurance Co.; Holyoke Mutual Insurance Co. in Salem; Country Casualty Insurance Co.; Country Preferred Insurance Co.; Modern Service Insurance Co.; MSI Preferred Insurance Co. – counterparty credit ratings raised to ‘AApi’ from ‘Api;’ financial strength ratings to ‘AApi’ from ‘Api.’
— Erie Insurance Group; Erie Insurance Exchange; Erie Insurance Co.; Erie Insurance Co. of New York; Erie Insurance Property & Casualty Co.; Flagship City Insurance Co. – counterparty credit ratings raised to ‘AApi’ from ‘Api;’ financial strength ratings to ‘AApi’ from ‘Api.’
— Farm Bureau Group; Farm Bureau Mutual Insurance Co. of ID – counterparty credit rating to ‘Api’ from ‘BBBpi;’ financial strength rating to ‘Api’ from ‘BBBpi.’
— Federated Mutual Group; Federated Mutual Insurance Co.; Federated Service Insurance Co. – counterparty credit rating to ‘AApi’ from ‘Api;’ financial strength rating to ‘AApi’ from ‘Api.’
— FM Global Group; Factory Mutual Insurance Co.; Affiliated FM Insurance Co.; Appalachian Insurance Co. – counterparty credit rating ‘Api’ from ‘ BBBpi;’ financial strength rating ‘Api’ from ‘BBBpi.’
— Guarantee Trust Group; Guarantee Trust Life Insurance Co.; Guarantee Security Life Insurance Co. of AZ – counterparty credit ratings raised to ‘ Bpi’ from ‘ CCCpi;’ financial strength rating to ‘Bpi’ from ‘CCCpi.’
— INSCO DICO Group; Developers Surety & Indemnity Co.; Indemnity Co. of CA – counterparty credit rating to ‘BBBpi’ from ‘BBpi;’ financial strength rating ‘BBBpi’ from ‘BBpi.’
— International Fidelity Insurance Co. – counterparty credit rating to ‘BBBpi’ from ‘BBpi;’ financial strength rating to ‘BBBpi’ from ‘BBpi.’
— Kentucky Farm Bureau Mutual Insurance Co.- counterparty credit rating ‘AApi’ from ‘Api;’ financial strength rating to ‘AApi’ from ‘Api.’
— Lumbermens Underwriting Alliance; American Compensation Insurance Co. – counterparty credit rating to ‘BBpi’ from ‘Bpi;’ financial strength rating to ‘BBpi’ from ‘Bpi.’
— New Era Life Group; New Era Life Insurance Co. ;New Era Life Insurance Co. of the Midwest – counterparty credit rating to ‘BBpi’ from ‘Bpi;’ financial strength rating to ‘BBpi’ from ‘Bpi.’
— New Jersey Manufacturers Group; New Jersey Manufacturers Insurance Co. New Jersey Re-Insurance Co. – counterparty credit rating to ‘AApi’ from ‘Api;’ financial strength rating to ‘AApi’ from ‘Api.’
— Pekin Insurance Group; Farmers Automobile Insurance Assoc.; Pekin Insurance Co. – counterparty credit rating to ‘Api’ from ‘BBBpi;’ financial strength rating to ‘Api’ from ‘BBBpi.’
— SCPIE Group; SCPIE Indemnity Co.; American Healthcare Specialty Insurance Co.; American Healthcare Indemnity Co. – counterparty credit rating to ‘BBpi’ from ‘Bpi;’ financial strength rating to ‘BBpi’ from ‘Bpi.’

Ratings affirmed then withdrawn
— Physicians Insurance Co. of WI; First Surety Corp. (formerly known as West Virginia Fire & Casualty Co.) – counterparty credit rating ‘NR BBBpi;’ financial strength rating ‘NR BBBpi.’

Ratings assigned
— American Interstate Ins Co. of TX – counterparty credit rating ‘BBBpi;’ financial strength rating ‘BBBpi.’
— Cotton States Mutual Insurance Co.; Shield Insurance Co. – counterparty credit rating ‘AApi;’ financial strength rating ‘AApi.’
— Western Community Insurance Co. – counterparty credit rating ‘Api;’ financial strength rating ‘Api.”

Source: Standard & Poor’s – www.standardandpoors.com

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