A.M. Best Keeps Paradigm B++ Rating Under Review Implications Changed From Negative to Developing.OLDWICK, N.J.--(BUSINESS WIRE)--June 15, 1999-- A. M. Best Co. today said that the B++(Very Good) Best's Rating Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. of Paradigm Insurance Co., Indianapolis, remains under review with implications changed from negative to developing. The change follows the June 15, 1999 announcement by the company's ultimate parent, Queensway Financial Holdings Ltd.,Toronto, that it has entered into an agreement to sell the entire ownership interest in Paradigm Insurance Co.'s medical malpractice Improper, unskilled, or negligent treatment of a patient by a physician, dentist, nurse, pharmacist, or other health care professional. book of business to California-based, American Healthcare Specialty Insurance Co., a subsidiary of SCPIE SCPIE Southern California Physicians Insurance Exchange Holdings Inc. The transaction is subject to customary regulatory approvals and is expected to close by the end of June 1999. The SCPIE companies currently have a pooled Best's Rating of A (Excellent), which is unaffected by this transaction. Following this transaction, Queensway also intends to remove all assets and liabilities from Paradigm and sell the shell to an undisclosed party after meeting security requirements and obtaining regulatory approvals. The rating will remain under review and will change pending the completion of these transactions and A.M. Best's detailed discussion with future owners regarding Paradigm's prospective business plans and integration into the corporate structure. In the interim, Queensway has committed to maintain Paradigm's policyholders' surplus at the statutory minimum requirement for an excess and surplus lines carrier and to provide for an orderly orderly /or·der·ly/ (or´der-le) an attendant in a hospital who works under the direction of a nurse. or·der·ly n. An attendant in a hospital. transition in operations to insure Insure can mean:
This is consistent with A.M. Best's March 15, 1999 decision to place Paradigm's rating under review with negative implications. This action followed an earlier announcement by Queensway that Paradigm took a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charge of $13.0 million in 1998 and A.M. Best's subsequent review of Paridigm's 1998 year-end financials. The review revealed continued significant adverse development related to pre-1997 accident year loss reserves and increased allowance for disputed 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. that resulted in a decline in policyholders' surplus. Paradigm's policyholders' surplus declined to $15.1 million, which is marginally above the minimum surplus requirement for operation as an excess and surplus lines carrier. A.M. Best previously had expressed concern regarding the company's unfavorable underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. results over the past several years as a result of inadequate pricing and adverse reserve development. A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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