A.M. Best Co. said Tuesday that it downgraded the financial strength rating of Indemnity Insurance Corporation, RRG to B (Fair) from A- (Excellent).
Best also downgraded the RRG’s issuer credit rating to “bb” from “a-“, and placed both ratings under review with negative implications.
Best said it took the actions because of a precipitous decline in IIC’s risk-based capitalization due to an unexpected decrease in surplus. The company’s unanticipated decline in risk-based capitalization put the RRG’s capital below Best’s required capitalization levels.
The ratings will remain under review pending the successful completion of IIC’s plans to increase surplus and risk-based capitalization to levels that can support its ongoing business strategy.
Positive rating actions could occur if IIC maintains the required risk-based capitalization levels and operating profits for an extended period of time.
Negative rating actions could occur if risk-based capitalization continues to decline and/or its surplus is affected by another unanticipated event.
Source: A.M. Best