A.M. Best Affirms Rating of Accident Compensation Corporation.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) and assigned an issuer credit rating (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "aa" to Accident Compensation Corporation (ACC See adaptive cruise control. ) (New Zealand). The outlook for both ratings is stable. The ratings reflect ACC's status as a Crown entity in New Zealand and its right to operate as the sole provider of personal accident insurance. The ratings also recognize the Corporation's quality investment portfolio and commitment to achieve fully funded status. The Injury Prevention, Rehabilitation, and Compensation Act 2001 charges ACC with providing a fair and sustainable scheme for managing personal injury. This gives ACC greater latitude in setting levies to achieve its commitment of fully funded status by June 30, 2014. A net loss of NZD NZD In currencies, this is the abbreviation for the New Zealand Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 794 million (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 555 million) in fiscal year 2005 contributed to a reserve shortfall of NZD 4.2 billion (USD 2.9 billion). However, A.M. Best recognizes the support of ACC's unfunded liabilities from the New Zealand government. A.M. Best views favourably ACC's relatively conservative investment portfolio. This has acted as an earning stabilizer stabilizer: see airplane. , generating a net investment income of NZD 776.8 million (USD 543 million) for ACC in fiscal year 2005. Offsetting these positive rating factors are the company's volatile underwriting results, lack of catastrophe reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. coverage and the risk of a change in legislation. Without catastrophe reinsurance coverage, ACC is vulnerable to any potential claims arising from unforeseeable Un`fore`see´a`ble a. 1. Incapable of being foreseen. Adj. 1. unforeseeable - incapable of being anticipated; "unforeseeable consequences" unpredictable - not capable of being foretold catastrophe events. ACC's underwriting performance significantly deteriorated in fiscal year 2005. This decline was predominantly due to the impact of interest rates on liability valuation. The corporation's claim liability reserve adjustments are highly correlated with interest rate movements. Finally, ACC's rating is based on the expected continuation of legislated support by the New Zealand government. For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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