A.M. Best Downgrades Ratings of North Carolina Mutual Life Insurance Company; Ratings Remain Under Review.OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength rating to C+ (Marginal) from B- (Fair) and issuer credit rating to "b-" from "bb-" of North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. Mutual Life Insurance Company (NCM NCM National Corvette Museum (Bowling Green, Kentucky) NCM Nordic Council of Ministers NCM New California Media NCM Nomenclatura Común del Mercosur NCM Non-Commissioned Member (Canadian Military) ) (Durham, NC). The ratings remain under review with negative implications, reflecting the uncertainty surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. the successful execution of a number of initiatives designed to increase the capital position of NCM. The rating downgrades recognize NCM's second quarter 2009 reduction in surplus and continued operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. . However, losses have significantly declined from the prior year. Given the volatility of the current economic environment, A.M. Best also is concerned with NCM's increase in below-investment grade bond holdings in 2009 and its commercial mortgage exposure, as each investment component represents a significant portion of its surplus. NCM's ratings remain under review with negative implications, reflecting the uncertainty surrounding the successful execution of various initiatives being undertaken to strengthen its capital position and return to profitability. These initiatives include the additional use of 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. to stabilize stabilize See peg. its surplus position and further reduction in costs. As NCM's risk-based capital position is marginal, it is imperative that these initiatives come to fruition fru·i·tion n. 1. Realization of something desired or worked for; accomplishment: labor finally coming to fruition. 2. Enjoyment derived from use or possession. 3. . If NCM's strategies are unsuccessful in the near term, A.M. Best may take additional rating actions. For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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