A.M. Best Downgrades Rating for MIIX Group.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Mar. 22, 2002 A.M. Best Co. has downgraded the financial strength rating to C+ (Marginal) from B- (Fair) for MIIX Group, Lawrenceville, New Jersey Lawrenceville is a census-designated place and unincorporated area located within Lawrence Township in Mercer County, New Jersey. As of the United States 2000 Census, the CDP population was 4,081. Lawrenceville is located roughly halfway between Princeton and Trenton. , with the outlook continuing to be negative. Also, the group's rating was removed from under review. This rating action applies to MIIX Insurance Company and its two subsidiaries, Lawrenceville Property & Casualty Company and MIIX Insurance Company of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . Recently, A.M. Best downgraded the group to B- (Fair) following the February 20, 2002, announcement by MIIX that it had delayed its fourth-quarter 2001 earnings announcement in anticipation of an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. from adverse loss reserve development. Since February 20, MIIX has completed its reserve analysis and filed 2001 financials, enabling A.M. Best to evaluate the full extent of the financial impact of the fourth quarter. This rating action reflects the significantly weakened capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. resulting primarily from adverse loss reserve development, funds held charges and establishment of a valuation reserve to offset a deferred tax asset. As a result, both subsidiaries reported on their financial statements Risk Based Capital (RBC RBC red blood cell. RBC or rbc abbr. red blood cell RBC, n See red blood cell count. RBC red blood cells; red blood (cell) count (see blood count). ) ratios below the minimum threshold required by the National Association of Insurance Commissioners The National Association of Insurance Commissioners (NAIC) is an Internal Revenue Code Section 501(c)(3) non-profit organization which seeks to organize the regulatory and supervisory efforts of the various state insurance commissioners from around the United States. (NAIC NAIC See National Association of Investors Corporation (NAIC). ). The reserve charge reflected a trend of unprecedented loss severity that emerged in the latter half of 2001--particularly in the Pennsylvania institutions book--as well as adverse development associated primarily with physician business in certain other states, most notably Pennsylvania, Texas and Ohio. During the past two years, management has undertaken a number of actions to stabilize stabilize See peg. and strengthen MIIX's overall operations. Recent actions include the closure of regional offices, implementation of a cost reduction plan and actions to shed non-core assets. Further, MIIX will focus operations in New Jersey and the Mid-Atlantic region where they have a strong core insured physician base. A.M. Best remains concerned with the adequacy of loss reserves, the potential for additional reserve strengthening and the future direction of the group following the numerous changes in management over the last two years and changes in the overall business strategy. Accordingly, the rating outlook remains negative. 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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