On Monday, A.M. Best Co. placed the “A-minus” financial strength rating of pooled and reinsured members of the Tower US Pool under review with negative implications.
The Oldwick, N.J.-based rating agency took the same action with respect to issuer credit ratings (ICR) of “a-minus.”
A.M. Best also has placed under review with negative implications the FSR of “A-minus” and ICR of “a-minus” of CastlePoint Reinsurance Company, Ltd. (Bermuda).
All companies are owned by Tower Group International, Ltd. Best said the under review status reflects Tower’s previously issued press release, which announced the postponement of its financial results for second-quarter of 2013, and an anticipated prior-year loss reserve charge in the range of $60 million to $110 million pre-tax.
In the rating announcement, however, Best said that “even at the high end of the reserve charge, risk-adjusted capitalization is expected to remain supportive of the ratings.”
The ratings will remain under review pending further discussions between A.M. Best and Tower’s management.
The negative implications reflect the reasonable likelihood that the ratings could be downgraded or the outlook revised, Best said.
Best listed the following pooled and reinsured members of Tower US Pool that are subject to the under review status:
- CastlePoint Insurance Company
- CastlePoint National Insurance Company
- Tower Insurance Company of New York
- Tower National Insurance Company
- Preserver Insurance Company
- North East Insurance Company
- Hermitage Insurance Company
- CastlePoint Florida Insurance Company
- Kodiak Insurance Company
- York Insurance Company of Maine
- Massachusetts Homeland Insurance Company
Concurrently, A.M. Best has placed under review with negative implications the ICR of “bbb-” as well as the debt rating of “bbb-” on $142.5 million 5.00% senior convertible notes, due 2014 of the intermediate holding company, Tower Group, Inc.
Source: A.M. Best Company, Inc.