A.M. Best Affirms Ratings of National American Insurance Company (OK); Assigns Issuer Credit Rating.OLDWICK, N.J. -- A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of B+ (Very Good) 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 "bbb-" to National American Insurance Company (OK) (NAICO NAICO Nuclear Accident & Incident Control Officer ) (Chandler, OK). Concurrently, A.M. Best has affirmed the ICR of "bb-" of NAICO's parent, Chandler (U.S.A.), Inc. (Chandler) and the debt rating of "bb-" on Chandler's 8.75% senior unsecured debentures due 2014. The outlook for all ratings is negative. These ratings reflect NAICO's adequate risk-adjusted capitalization and management's corrective actions A corrective action is a change implemented to address a weakness identified in a management system. Normally corrective actions are instigated in response to a customer complaint, abnormal levels if internal nonconformity, nonconformities identified during an internal audit or in recent years, including significantly increasing rates, reducing exposures, improving risk selection and tightening policy terms and conditions. Offsetting the positive rating factors has been the occurrence of adverse loss reserve development, which totaled more than $67 million between 2001 and 2005, as well as the company's continued dependence on 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. . Although the majority of the adverse development during this period impacted accident years 1997 through 2001, more recent accident years began to develop adversely in 2005. Given the continued uncertainty surrounding the adequacy of its reserves, the outlook remains negative. The ratings also consider the financial leverage of the organization on an enterprise basis, as well as fixed charge coverage, which was barely adequate in prior years but improved in 2005. Historically, NAICO has played a significant role in the servicing of debt at Chandler, but management indicated that the obligations can be met by other companies throughout the enterprise, as was done in 2005. Nevertheless, it is possible that dividends from NAICO could be necessary to service the holding company's debt obligations in the future, which could have an adverse impact on surplus and overall capitalization. For Best's Debt Ratings, all other Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , 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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