A.M. Best Affirms Ratings of The Atlantic Mutual Companies; Removes From Under Review.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings of B- (Fair) and the issuer credit ratings of "bb-" of The Atlantic Mutual Companies (Atlantic Mutual) (New York, NY) and its property/casualty subsidiaries. At the same time, A.M. Best has affirmed the debt rating of "ccc" of the $100 million 8.15% 30-year surplus notes issued by Atlantic Mutual Insurance Company (New York, NY). All ratings have been removed from under review and assigned a negative outlook.

The affirmation of the group's ratings and the subsequent removal of the under review status reflect A.M. Best's review of its most recent revised business plans and projections, as well as the measures Atlantic Mutual has taken to curtail any recurrence of the recent adverse development in its discontinued commercial lines reserves that caused an approximately $100 million decline in surplus at year-end 2005. While the potential for continued adverse prior year development of the group's loss reserves remains present and fuels the uncertainty regarding its future financial strength, A.M. Best does acknowledge the measures taken to bolster reserves and slow continued adverse development in the short term.

The rating outlook remains negative due to Atlantic Mutual's recently diminished financial strength that remains dependent in the long term upon its underwriting and operating profitability, which, although improving, has remained weak in recent years. Many of the group's recent improvements will require time to deploy, as well as time to work through its results. This remains an ongoing concern as Atlantic Mutual continues to improve its situation. Atlantic Mutual remains challenged to maintain its recently re-stabilized prior year reserve development, continue the improved profitability in its ongoing personal lines operations and protect its remaining capital.

The FSRs of B- (Fair) and the ICRs of "bb-" have been affirmed and assigned a negative outlook for The Atlantic Mutual Companies and its following subsidiaries:

--Atlantic Mutual Insurance Company

--Centennial Insurance Company

The following debt rating has been affirmed and assigned a negative outlook:

Atlantic Mutual Insurance Company--

--"ccc" on $100 million 8.15% 30-year surplus note, due 2028

For Best's Debt Ratings, all other 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.