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A.M. Best Places Ratings of Preferred Contractors Insurance Company RRG, LLC Under Review With Negative Implications

August 25, 2014



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.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.

A.M. Best's credit ratings are independent and objective opinions, not statements of fact. A.M. Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. A.M. Best's credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

A.M. Best receives compensation for interactive rating services provided to organizations that it rates. A.M. Best may also receive compensation from rated entities for non-rating related services or products offered by A.M. Best. A.M. Best does not offer consulting or advisory services. For more information regarding A.M. Best's rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the A.M. Best Code of Conduct.

A.M. Best - Europe Rating Services Limited (AMBERS), a subsidiary of A.M. Best Company, is an External Credit Assessment Institutions (ECAI) in the European Union (EU). Therefore, credit ratings issued by AMBERS may be used for regulatory purposes in the EU as per Directive 2006/48/EC.


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Source: ENP Newswire


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