|[August 22, 2014]
A.M. Best Places Ratings of Preferred Contractors Insurance Company Risk Retention Group, LLC Under Review With Negative Implications
OLDWICK, N.J. --(Business Wire)--
A.M. Best has placed under review with negative implications the
financial strength rating of B (Fair) and the issuer credit rating of
"bb" for Preferred Contractors Insurance Company Risk Retention
Group, LLC (PCIC) (Billings, MT).
These rating actions follow the filing extension to Sept. 1, 2014, of
the company's second quarter 2014 financial statement granted by the
State of Montana, requiring PCIC to obtain an actuarial review of loss
and loss adjustment expense reviews, as of June 30, 2014. The under
review with negative implications status reflects A.M. Best's concern
that the actuarial review could potentially result in additional adverse
loss reserve development and, in that event, cause a deterioration in
operating performance and risk-adjusted capitalization. The ratings will
remain under review until the second quarter filing has been made, at
which time the raings will likely be taken out from under review
following a review of the company's latest financial position.
A.M. Best continues to monitor quarterly performance of PCIC. Any
material negative deviation from the business plan in terms of
management, operating profitability and risk profile, or a decline in
its risk-adjusted capitalization could result in negative rating
pressure. Factors that could lead to positive rating movement are
evidence of sustained favorable operating performance and credit metrics
that improve risk-adjusted capitalization over the long term.
The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best's rating process and contains the different rating criteria
employed in the rating process. Best's Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
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