A.M. Best Co. has placed the financial strength rating of ‘B+’ (Good) and the issuer credit rating (ICR) of “bbb-” of Georgia Casualty & Surety Company under review with positive implications. “The rating actions reflect the pending acquisition of this company, along with its sister company, Association Casualty Insurance Company of Austin, Texas, by Columbia Mutual Insurance Company from Atlantic American Corporation. “The acquisition, which includes Georgia Casualty’s existing infrastructure and employees, is expected to close during the first quarter of 2008,” said Best. “The company is expected to benefit from the resources available to it from its new parent, both financially and through expanded product offerings and geographic diversification. The Georgia Casualty acquisition will allow Columbia Mutual to expand and enhance its presence in the Southern United States. As a result, the rating for Georgia Casualty is likely to increase at the time the transaction closes.”
Fitch Ratings has downgraded the Issuer Default Rating (IDR), senior debt, preferred stock, and insurer financial strength ratings of Conseco Inc. and its subsidiaries. The preferred stock rating is being withdrawn, as there are no current outstanding issues and no plans for issuance. “The rating action affects approximately $1.2 billion in outstanding debt,” said Fitch. “The Outlook remains Negative.” Fitch explained that the downgrades reflect its “ongoing concerns over the company’s financial results for 2007 and uncertainty as to its performance going forward. Charges associated with a litigation settlement, losses and reserve strengthening on the company’s run-off long-term care business, as well as the expectation of a continuing long recovery in that business, have lessened Fitch’s confidence that Conseco is on a clear path toward earnings improvement and stable financial results.”
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