A.M. Best Downgrades Rating of Providence Washington Insurance Companies.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--May 28, 2004 A.M. Best Co. has downgraded the financial strength rating to B- (Fair) from B+ (Very Good) of Providence Providence, city (1990 pop. 160,728), state capital and seat of Providence co., NE R.I., a port at the head of Providence Bay; founded by Roger Williams 1636, inc. as a city 1832. Washington Insurance Companies (PW) (Providence, RI). The rating remains under review with negative implications. The rating applies to the four inter-company pool members led by Providence Washington Insurance Company. This rating action follows PW's announcement today regarding the company's decision to cease all new and renewal business (to the extent permitted by law). In addition, PW has entered into a renewal rights transaction with OneBeacon Insurance Company which, upon finalization Writing the table of contents (TOC) on a recordable CD or DVD disc. The finalization process ensures that the disc can be played back on most CD and DVD players. See disc-at-once. , would include the rights to a significant portion of PW's commercial package business. Management has already received approval from the Rhode Island Rhode Island, island, United States Rhode Island, island, 15 mi (24 km) long and 5 mi (8 km) wide, S R.I., at the entrance to Narragansett Bay. It is the largest island in the state, with steep cliffs and excellent beaches. Insurance Department and is in the process of meeting other state regulators over the next few weeks. This action also takes into consideration the additional reserve charge taken in the first quarter of 2004, the continued decrease in policyholders' surplus and the considerable loss reserve development reported in recent years. In light of the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. reserve charge and the potential for further adverse loss reserve development, the rating remains under review pending A.M. Best's meeting with management and a review of Providence Washington's run-off plan. This rating action follows the rating 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. in March 2004, the substantial reserve charge reported by Providence Washington at year-end 2003 and the resulting deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in risk-adjusted 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. . As a consequence, A.M. Best placed the rating under review with negative implications and has been in discussions with management concerning potential capital raising alternatives. At that time, the negative implication signaled the risk associated with the capital raising initiatives and the likelihood of a further downgrade. In the absence of new capital, PW's management determined that an orderly run off would be in the best interest of the company and its policyholders. The financial strength rating has been downgraded to B- (Very Good) from B+ (Very Good) for the following companies: -- American Concept Insurance Company -- Providence Washington 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 -- Providence Washington Insurance Company -- York Insurance Company 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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