S&P Assigns Consolidated Prop. & Casualty `Bpi' FSR.

Business Editors

NEW YORK--(BUSINESS WIRE)--Standard & Poor's

Jan. 16, 2001--Standard & Poor's today assigned its single-'Bpi' financial strength rating to Consolidated Property & Casualty Insurance Co. Inc. (Consolidated).

The rating reflects the ultimate parent's recent default on debt payments and Consolidated's limited operating scope, geographic concentration, and volatile operating performance.

Based in Coral Gables, Fla., Consolidated writes mainly commercial auto insurance and commercial multi-peril insurance. Florida, the only state the company is licensed in, constitutes all of its business. Its products are distributed primarily through independent general agents.

Consolidated (NAIC: 34932), which began business in 1989, was acquired in 1998 by Queens Pointe Financial Services Co., a Michigan insurance holding company that is ultimately owned by Queensway Financial Holdings, Ltd. (Queensway) of Toronto, Canada. Queensway is a specialty insurance group operating through a number of subsidiaries in the U.S. and Canada, providing a range of individual and commercial insurance coverages. It is publicly traded on the Toronto Stock Exchange under the symbol QFH.

Major Rating Factors:

-- The rating is constrained to single-'Bpi' as a consequence of Queensway's
December 2000 default on debt payments.

-- The company's business scope is considered limited. Surplus was $5.9 million
at year-end 1999, and total 1999 net premiums written amounted to $6.6 million.


-- The company's five-year average ROR is good at 6.9%. When the return is
further adjusted for volatility, the company score is below that of
higher-rated insurers. Further, the company has no retained earnings, with
year-end 1999 unassigned surplus at negative $2.6 million.

-- The company's geographic and product line concentration is high. The company
is susceptible, on a gross basis, to catastrophes and storm-related losses. In
1999, 100% of direct premiums written were in Florida. Although the company has
made improvements to geographically diversify within Florida, 76% of its
business is currently still in the Miami-Dade County area.

-- At year-end 1999, capitalization was more than adequate at 242.5%.

Ratings with a 'pi' subscript are insurer financial strength ratings based on an analysis of an insurer's published financial information and additional information in the public domain. They do not reflect in-depth meetings with an insurer's management and are therefore based on less comprehensive information than ratings without a 'pi' subscript. Ratings with a 'pi' subscript are reviewed annually based on a new year's financial statements, but may be reviewed on an interim basis if a major event that may affect the insurer's financial security occurs. Ratings with a 'pi' subscript are not subject to potential CreditWatch listings.

Ratings with a 'pi' subscript generally are not modified with "plus" or "minus" designations. However, such designations may be assigned when the insurer's financial strength rating is constrained by sovereign risk or the credit quality of a parent company or affiliated group, Standard & Poor's said.--CreditWire.