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A.M. BEST RAISES RATING ON LMI INSURANCE COMPANY

 OLDWICK, N.J., Dec. 22 /PRNewswire/ -- A.M. Best Company raised the Best's Rating of LMI Insurance Company (formerly Prudential-LMI Commercial Insurance Company) to "A" (Excellent) from "A-" (Excellent), effective today. This rating action reflects the company's ongoing progress made in reducing its vulnerability to significant catastrophe exposures, particularly in Florida, as well as its maintenance of substantial reinsurance protection.
 This rating action follows the Dec. 18 announcement of Prudential- LMI Insurance Company being sold by Prudential Property and Casualty Insurance Company (PRUPAC) to the Vik Brothers Insurance Group. Prudential-LMI Insurance Company was renamed LMI Insurance Company following the sale. In accordance with terms and conditions of the sale, PRUPAC has provided certain guarantees and assurances protecting LMI Insurance Company, including several measures that insulate the company from any negative financial impacts stemming from Hurricane Andrew losses. In addition, the company will continue to participate in PRUPAC's catastrophe reinsurance program through July 1, 1993.
 PRUPAC's $1.3 billion gross loss estimate from Hurricane Andrew included $88 million attributable to LMI Insurance Company. Unlike PRUPAC, LMI had substantial reinsurance protection which significantly offset its gross losses, resulting in an approximate $4 million net after-tax charge to statutory earnings. LMI's surplus was $38 million as of Sept. 30.
 The sale of LMI Insurance Company to Vik Brothers Insurance Group and the guarantees provided by PRUPAC have several positive implications, as the company's long-term profitability should be enhanced by management's renewed focus on expenses and pricing. In addition, the volatility of its underlying loss reserves will be reduced, and the company will be able to operated with more conservative leverage.
 -0- 12/22/92
 /CONTACT: Christina Stein of A.M. Best Company, 908-439-2200, ext. 5642/


CO: LMI Insurance Company ST: IN: INS SU: RTG

SM-AH -- NY058 -- 9307 12/22/92 17:08 EST
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Publication:PR Newswire
Date:Dec 22, 1992
Words:300
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