A.M. Best Downgrades Ratings of Kemper Insurance Companies.Business Editors/Insurance Writers OLDWICK, N.J.--(BUSINESS WIRE)--June 10, 2003 A.M. Best Co. has downgraded the financial strength ratings to D (Poor) from C++ (Marginal) of the participants in the Kemper Insurance Companies' (Long Grove Long Grove may refer to:
The downgrading downgrading A reduction in the quality rating of a security issue, generally a bond. A downgrading may occur for various reasons including a period of losses, or increased debt service required by restructuring a firm's capital to include more debt and less of the Kemper Insurance Companies' rating follows the announcement that upon completion of the year-end 2002 independent financial audit, Lumbermens Mutual Casualty Company, the lead company of the inter-company pool, expects its year-end 2002 statutory surplus -- as reflected in its annual statement -- to be substantially lower than currently stated. The reduction is a result of events related to the decision to enter into voluntary run-off and terminate the surplus notes tender offer in 2003, which were evaluated after completing the year-end 2002 statutory statement. The adjustments in policyholders' surplus are primarily attributable to the inadmissibility in·ad·mis·si·ble adj. Not admissible: inadmissible evidence. in of deferred tax assets, impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of certain equity securities, real estate and goodwill and an accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. for deferred revenue in Lumbermens Mutual Casualty Company's service operations. Although the total amount of these adjustments has not been disclosed, management has indicated that if the adjustments had been reflected in its year-end 2002 statutory filing of Lumbermens Mutual Casualty Company, total risk-adjusted capital would fall within the Mandatory Control Level of the risk-based capital calculation required by the Illinois Department of Insurance. Also, A.M. Best has downgraded the financial strength ratings to C++ (Marginal) from B (Fair) of the Eagle Insurance Group (Washington) due to the 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. of its ultimate parent, Lumbermens Mutual Casualty Company, and uncertainty of actions to be taken by the Illinois Department of Insurance. Eagle maintains an above average dependence on 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. recoverables from Lumbermens Mutual Casualty Company. The rating of Eagle Insurance remains under review with negative implications, pending successful and timely conclusion of capital enhancement efforts, including the sale of the Eagle Group and collateralization In medicine, collateralization, also vessel collaterlization and blood vessel collateralization, is the growth of a blood vessel or several blood vessels that serve the same end organ or vascular bed as another blood vessel that cannot adequately supply that end organ of recoverables from Lumbermens Mutual Casualty Company. While a definitive sale agreement currently does not exist, these factors combined would allow A.M. Best to consider a Secure rating of the Eagle Group. 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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