A.M. Best Downgrades Rating of I.P.C. Group.Business Editors/Insurance Writers OLDWICK, N.J.--(BUSINESS WIRE)--April 17, 2002 A.M. Best Co. has downgraded the financial strength rating to C (Weak) from B+ (Very Good) of the I.P.C. Group, Bermuda, and removed the rating from under review. I.P.C. includes: Mutual Indemnity (Barbados) Ltd., Mutual Indemnity Ltd., Mutual Indemnity (Bermuda) Ltd., and Mutual Indemnity (U.S.) Ltd., all of Bermuda. Mutual Indemnity (Dublin) Ltd., Ireland, has been de-coupled from the group and downgraded to a financial strength rating of D (Poor) due to its significant unrealizable assets associated with Legion Insurance Company. The rating has also been removed from under review. On March 29, 2002, A.M. Best downgraded the financial strength rating to E (Under Regulatory Supervision) of I.P.C.'s affiliated U.S. companies, under Legion Insurance Group: Legion Indemnity Company, Illinois, Legion Insurance Company and Villanova Insurance Company, both of Pennsylvania. At that time, I.P.C. was placed under review with negative implications along with the downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. of Legion Insurance Group. The rating action reflects the uncertainty of the present and future realizable value of the non-liquid assets of I.P.C., making the ability of capital to support an efficient and secure run-off of the liabilities and any asset value shortfall questionable. While remote, it is unclear whether all of the assets of the I.P.C. companies are protected from the possible need to liquidate To pay and settle the amount of a debt; to convert assets to cash; to aggregate the assets of an insolvent enterprise and calculate its liabilities in order to settle with the debtors and the creditors and apportion the remaining assets, if any, among the stockholders or owners of the at the Mutual Risk Management (MRM MRM Marketing Resource Management MRM Mobile Resource Management MRM Metabolic Response Modifiers MRM Multiple Reaction Monitoring (mass spectrometry) MRM Mormonism Research Ministry MRM Mechanically Recovered Meat ) level. With no policy-issuing carrier identified to replace Legion Insurance Company--placed in voluntary rehabilitation rehabilitation: see physical therapy. on April 1, 2002--the operations of I.P.C. are at a standstill standstill /stand·still/ (stand´stil?) cessation of activity, as of the heart (cardiac s.) or chest (respiratory s.) . stand·still n. Complete cessation of activity or progress. . Given the material operating and financial problems, the ability of the rent-a-captive companies to continue as an ongoing concern is doubtful. Sale of the operations is similarly capricious capricious adv., adj. unpredictable and subject to whim, often used to refer to judges and judicial decisions which do not follow the law, logic or proper trial procedure. A semi-polite way of saying a judge is inconsistent or erratic. . MRM--the ultimate parent of I.P.C.--continues to maintain significant debt obligations, the bulk of which is now short-term bank debt. Without restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , holding company debt perpetuates uncertainty, and the inability to repay debt obligations may require MRM to liquidate. Therefore, instability continues for all of the MRM companies. 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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