A.M. Best Places Subsidiaries of GE Insurance Solutions Corp Under Review With Negative Implications.OLDWICK, N.J. -- A.M. Best Co. has placed the financial strength ratings of the subsidiaries of GE Insurance Solutions Corp (formerly known as GE Global Insurance Holding Corp) (GE Insurance) (Overland o·ver·land adj. Accomplished, traversing, or passing over the land instead of the ocean: an overland journey; an overland route. adv. , KS) under review with negative implications. (Please see listing below.) A.M. Best has also placed the issuer credit ratings of "a" of Employers 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. Corporation (Overland Park Overland Park, city (1990 pop. 111,790), Johnson co., NE Kans., a residential suburb of Kansas City; inc. 1960. There is printing and publishing, and the manufacture of apparel, aircraft parts, cement, prepared foods, salt, chemicals, marine accessories, and signs. , KS) and GE Reinsurance Corporation (Barrington, IL), together known as Employers Re Corp Group, and the issuer credit and senior debt ratings of "bbb+" of GE Insurance under review with negative implications. These rating actions follow an initial meeting with management following General Electric's (GE) (NYSE NYSE See: New York Stock Exchange : GE) recent announcement that GE Insurance will be taking an additional $472 million after tax charge in the fourth quarter associated with adverse reserve development stemming primarily from the 1997-2001 accident years. This brings the total after tax adverse reserve development in 2004 to $750 million, placing further pressure on the group's level of 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. . In November 2004, A.M. Best revised the rating outlook to negative from stable for Employers Re Corp Group following a reported deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in risk-adjusted capitalization levels resulting from estimated losses emanating from Hurricanes Charley Charley elderly poodle that accompanied Steinbeck on trip across U.S. [Am. Lit.: John Steinbeck Travels with Charley in Weiss, 471] See : Dogs , Frances, Ivan and Jeanne. At that time, although management indicated its intention to completely restore the capital level of each company by year-end 2004, A.M. Best believed that the marginal levels of risk-adjusted capitalization left each company exposed in the short term to the potential for further shock losses, adverse loss development or volatility in their investment portfolio stemming from changes in interest rates. Furthermore, A.M. Best believed that despite the ultimate ownership by GE, the financial flexibility remained constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. within the property/casualty (re)insurance subsidiaries. The ratings will remain under review with negative implications over the next 90 days while A.M. Best has further discussions with management regarding the timing, level and quality of capital restoration measures. In the absence of a tangible, long-term plan including support from GE, the ratings will likely be downgraded given the historical poor 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. performance primarily related to 2001 and prior accident years and a decline in risk-adjusted capitalization. The financial strength ratings of A (Excellent) have been placed under review with negative implications for the following subsidiaries of GE Insurance Solutions Corp: --Employers Reinsurance Corporation --GE Reinsurance Corporation --First Specialty Insurance Corporation --Westport Insurance Corporation The financial strength rating of A- (Excellent) has been placed under review with negative implications for The Medical Protective Company, a subsidiary of GE Insurance Solutions Corp. Additionally, the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Employers Reassurance REASSURANCE. When an insurer is desirous of lessening his liability, he may procure some other insurer to insure him from loss, for the insurance he has made this is called reassurance. Corporation have been placed under review with negative implications. The financial strength rating of B+ (Very Good) has been placed under review with negative implications for Coregis Insurance Company, a subsidiary of GE Insurance Solutions Corp. The issuer credit rating of "bbb+" has been placed under review with negative implications for GE Insurance Solutions Corp. The following debt ratings have been placed under review with negative implications: GE Insurance Solutions Corp (formerly GE Global Insurance Holding Corp)-- --"bbb+" on $400 million 6.45% senior unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. notes, due 2019 --"bbb+" on $600 million 7.00% senior unsecured notes, due 2026 --"bbb+" on $350 million 7.50% senior unsecured notes, due 2010 --"bbb+" on $350 million 7.75% senior unsecured notes, due 2030 --"bbb+" on the senior unsecured shelf For Best's Debt Ratings, all other 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 http://www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 330 reinsurance companies, please visit http://www.ambest.com/reinsurance/. 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 http://www.ambest.com. |
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