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Associates, Gerling Global, and Healthcare Indemnity Downgraded by Weiss Ratings; 73 Property and Casualty Insurers Downgraded; Only Two Upgraded in Recent Review.

Business Editors

PALM BEACH GARDENS, Fla.--(BUSINESS WIRE)--March 4, 2003

Associates Insurance Company, Connecticut Medical Insurance Company, Gerling Global Reins Corp of America, Healthcare Indemnity Inc., Sterling Casualty, and Washington Casualty were among 73 companies downgraded by Weiss Ratings, Inc., in its recent review of more than 2,200 property and casualty insurers.

Only two companies, Statewide Insurance Company and Sun Surety Company, received upgrades by Weiss, the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

Associates Insurance Company (Irving, Tex.) was downgraded to B (Good) from A+ (Excellent) due to a significant decrease in capital and surplus since June 30, 2002. Capital and surplus plunged $273.3 million, or 71.9 percent, from $380 million as of June 30, 2002 to $106.7 million as of September 30, 2002. The company has also experienced a significant decrease in assets during the same period.

Assets decreased $270.3 million, or 48.8 percent, to $282.9 million at September 30, 2002 from $553.2 million at June 30, 2002. The company maintains a healthy level of capital, on a risk-adjusted basis, and is a member of Citigroup, Inc.

Connecticut Medical Insurance Company (Glastonbury, Conn.) was downgraded to C (Fair) from B- (Good) due to a significant decline in capital since year-end 2001. Capital decreased to $57.2 million at September 30, 2002 from $74 million at December 31, 2001.

In addition, the company suffered a $7.3 million net loss during the first nine months of 2002 compared to a $5.4 million net profit during the same period in 2001.

Gerling Global Reinsurance Corporation of America (New York, N.Y.) was downgraded to D (Weak) from C- (Fair) due to a substantial decline in earnings. The company suffered a $25.6 million net loss in 2000, a $109.6 million net loss in 2001, and has incurred a net loss of $196.8 million during the first nine months of 2002.

The consistent losses have considerably weakened the company's capital position, which dropped 46.8 percent, from $522.7 million at year-end 2001 to $277.9 million at the end of the third quarter 2002.

Health Care Indemnity Incorporated (Nashville, Tenn.) was downgraded to C (Fair) from B- (Good) due to a significant decline in earnings. The company reported a $158 million loss during the first three quarters of 2002, compared to a $72 million profit at year-end 2001. In addition, the company's capital dropped 25 percent to $438 million at September 30, 2002 from $583.8 million at year-end 2001.

Sterling Casualty Insurance Company (Newport Beach, Calif.) was downgraded to D (Weak) from C- (Fair) due to an 82 percent decrease in capital, which plummeted to $3.3 million at September 30, 2002 from $18.4 million at December 2001.

Although premiums increased to $54.5 million in the first nine months of 2002 from $28.4 million at year-end 2001, this increased exposure, coupled with the plunge in capital, caused Sterling's risk-adjusted capital to weaken further. In addition, the company suffered a $4.1 million loss in 2001 and reported a $4 million loss for the first nine months of 2002.

Washington Casualty Company (Bellevue, Wash.) was downgraded to E (Very Weak) from D- (Weak) due to a 22.8 percent decrease in capital, which fell to $5.5 million at September 30, 2002 from $8.6 million at year-end 2001. Net losses in 2000, 2001, and during the first nine months of 2002 have steadily weakened the company's capital base.

Assets declined 36.4 percent to $41.5 million from December 2001 to September 30, 2002.

Weiss Ratings issues safety ratings on more than 15,000 financial institutions, including HMOs, life and health insurers, Blue Cross Blue Shield plans, property and casualty insurers, banks and brokers. Weiss also rates the risk-adjusted performance of more than 11,000 mutual funds and more than 9,000 stocks.

Weiss Ratings is the only major rating agency that receives no compensation from the companies it rates. Revenues are derived strictly from sales of its products to consumers, businesses, and libraries.

Consumers can purchase a rating for as little as $7.95 through www.WeissRatings.com, or starting at $15 by calling 800-289-9222.

Note to editors: A complete list of the quarterly upgrades and downgrades issued by Weiss Ratings to property and casualty insurers is available.
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Publication:Business Wire
Geographic Code:1USA
Date:Mar 4, 2003
Words:734
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