A.M. Best Downgrades Rating of HIH America Group.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Mar. 21, 2001 A.M. Best Co. has downgraded the financial strength rating of HIH HIH abbr. Her (or His) Imperial Highness America Group, San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden , CA, to C (Weak) from B+ (Very Good). The rating action reflects HIH America's current run-off status and the liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of HIH Insurance HIH Insurance was Australia's second largest insurance company, which was placed into provisional liquidation on 15 March 2001. The demise of HIH is considered be the largest corporate collapse in Australia's history, with liquidators estimating that HIH's losses totalled up to $5. Ltd., the group's Australia-based parent. On October 31, 2000, HIH America ceased writing new business and announced the sale of the renewal rights and other tangible assets associated with its large account California workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. business to Alaska National Insurance Company. On December 1, 2000, HIH America announced the sale of the renewal rights and other tangible assets associated with its non-California workers' compensation business to Argonaut Insurance Company. HIH America continues to manage the run off of its in-force policies and outstanding claims. On March 15, 2001, Australia's HIH Insurance Ltd. placed itself into provisional liquidation. As HIH America's parent, HIH Insurance provided the potential for financial backing and significant 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. protection for the U.S. operations. With the uncertainty of HIH Insurance's current financial condition, the protective cover it once offered HIH America has been significantly reduced, potentially exposing the U.S. operations to further economic stress. Accordingly, the rating for HIH America has been downgraded into the "vulnerable" category. 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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