S&P’s Assigns Washington Casualty Co. ‘R’ FSR

Standard & Poor’s has assigned its ‘R’ financial strength rating to
Washington Casualty Co. upon its placement into receivership by Thurston County Superior Court.

“This rating action follows the company’s filing of an annual statement for 2002 that showed its liabilities exceeded its assets by about $4.0 million,” Standard & Poor’s credit analyst Neilay Mehta commented. Insurance Commissioner Mike Kreidler has assumed control of the company, and day-to-day operations have been turned over to John Woodall of the Insurance Commissioner’s Office.

The immediate goal is to rehabilitate the company, whereby positive cash flows can be generated and a sufficient level of capitalization exists. If the plan is successful, the company could emerge
from receivership and resume normal operations.

Washington Casualty Co. is the third-largest insurer of hospitals in
Washington based on dollar volume of premiums.

The company insures 46 hospitals in Washington, 20 community health clinics, six Idaho hospitals, and two Oregon clinics.