ENP Newswire - 25 August 2014
Release date- 22082014 - 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 ratings 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.
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