A.M. Best Places Rating of Physicians Insurance Company of Wisconsin, Inc. under Review.OLDWICK, N.J. -- A.M. Best Co. has placed the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A- (Excellent) of the Physicians Insurance Company of Wisconsin, Inc. (PIC (1) (Programmable Interrupt Controller) An Intel 8259A chip that controls interrupts. Starting with the 286-based AT, there are two PICs in a PC, providing a total of 15 usable IRQs. Wisconsin) (Madison, WI) under review with negative implications. This rating action is based on the independent auditor's report Auditor's Report Recorded in the annual report, the auditor's report tests to see that a corporation's financial statements comply with GAAP. This is sometimes referred to as the clean opinion. Notes: Most auditor's reports consist of three paragraphs. , which requires PIC Wisconsin to increase carried loss reserves (at year-end 2005) to the independent actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin firm's indicated estimate. Accordingly, the company will be filing an amended 2005 year-end statutory statement, which will result in a revised net operating loss 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. of $8.6 million (compared to a filed $2.8 million net gain) and a 15% reduction (versus a filed 0.9% reduction) in policyholders' surplus for the year. The amended statutory statement will be filed with the Wisconsin Department of Insurance by the end of second quarter 2006. This increase in unpaid loss reserves is primarily related to the company's Wisconsin medical malpractice Improper, unskilled, or negligent treatment of a patient by a physician, dentist, nurse, pharmacist, or other health care professional. "claims-made" business. As a result, PIC Wisconsin currently maintains a level of risk-adjusted capital that is no longer supportive of its current A- (Excellent) rating. Critical to the rating is the pending sale of PIC Wisconsin to ProAssurance Corp. (ProAssurance) (Birmingham, AL). On December 8, 2005, ProAssurance entered into a definitive agreement and plan of merger to acquire control of PIC Wisconsin through the acquisition of all the outstanding shares of the Class A common stock. On May 17, 2006, the Office of the Commissioner of Insurance of the State of Wisconsin approved the transaction. A shareholder vote to approve the transaction will be held on July 26, 2006. If approved, the rating will remain under review pending discussions with management and ProAssurance regarding post-merger operating and capitalization plans. If the transaction is not consummated, the rating would likely be downgraded. For Best's Ratings 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. , an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. 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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