A.M. Best Downgrades Rating of Coregis Insurance Company and Revises Outlook to Stable.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--June 15, 2004 A.M. Best Co. has downgraded the financial strength rating to B+ (Very Good) from A- (Excellent) of Coregis Insurance Company (South Bend South Bend, city (1990 pop. 105,511), seat of St. Joseph co., N Ind., on the great south bend of the St. Joseph River, in a farming and mint-growing region; inc. as a city 1865. , IN). The outlook is being revised to stable from negative. This rating action was taken following the execution of an intercompany loan Intercompany loan Loan made by one unit of a corporation to another unit of the same corporation. from Coregis to its parent, GE Global Insurance Holding Corp. (Overland Park Overland Park, city (1990 pop. 111,790), Johnson co., NE Kans., a residential suburb of Kansas City; inc. 1960. There is printing and publishing, and the manufacture of apparel, aircraft parts, cement, prepared foods, salt, chemicals, marine accessories, and signs. , KS) an amount that as a capital reduction has weakened the company's risk-adjusted capitalization. Coregis sold the renewal rights of its public entity business lines to Argonaut Group (San Antonio San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. , TX) in November 2003, placing all remaining liabilities into run off. With minimal new business activity forecast for 2004, the company is in the process of executing a new business plan. Coregis has historically experienced poor underwriting and operating performance despite previous remedial underwriting actions, which caused its current management by Employers 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. Corporation (ERC (database) ERC - An extended entity-relationship model. ) (Overland Park, KS) to undertake a new strategy. Thus, with its risk-adjusted capital declining below the threshold for an A- (Excellent) rating, compounded by an uncertain future and historically weak underwriting and operating performance, these factors together precipitated the rating downgrade. The rating outlook is stable based on Coregis' relative size and the stop loss protection afforded it through ERC. 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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