Posted on 25 Mar 2009
OLDWICK, N.J. March 20 (BestWire) — A.M. Best Co. has placed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of BancInsure, Inc. (BancInsure) (Oklahoma City, OK) under review with negative implications. These rating actions are due in part to a 36% decline in BancInsure’s surplus as of December 31, 2008 compared to year-end December 31, 2007.
The rating actions follow BancInsure’s disappointing net loss for 2008 and unrealized investment losses, which combined, produced a $16.1 million erosion in shareholders’ equity in 2008. A.M. Best also is concerned that the continuing turmoil in the financial markets could further erode BancInsure’s capital position and negatively impact its earnings in 2009. A.M. Best recognizes that the company has demonstrated an ability to raise capital from its stakeholders in the recent past.
The under review status will remain in place until a full formal evaluation and analysis of BancInsure’s risk-adjusted capitalization and further discussions are held to determine whether it has sufficient cushion to weather more negative effects of the continuing turmoil in the financial markets, as well as any other unexpected events.
A.M. Best remains the leading rating agency of captive insurers rating a wide variety of more than 200 captives in the United States and throughout the world.
For current Best’s Credit Ratings and independent data on the captive and alternative insurance market, please visit http://www.ambest.com/captive.