Posted On: June 18, 2009, 2:19 pm CDT

Posted By: Arthro

WCFL, obviously you didn't read the story before you posted your comments. I have copied the parts of the press release that you obviously missed. Read below,especially the part where it explains the impact of decreased revenues due to non-renewals and the reinsurance program which results in a big PML which is significant but manageable.

You also missed the fact that on the same day, AM Best downgraded Argus from a C to an D. Another Florida domestic, along the lines of Coral and Peoples'Trust, seems headed for a meltdown.

By the way, aren't Coral, Argus, and People's trust part of the 40 companies Kevin McCarty says are going to save Florida when State Farm leaves?

"...The deterioration was driven by a sharp decline in net premiums written due to non renewals, wind mitigation discounts, increased reinsurance costs, rate decreases and the suspension of writing most new homeowners and commercial business...."

"...However, due to the company's comprehensive reinsurance program, which includes reinsurance from State Farm Mutual, the Florida Hurricane Catastrophe Fund and external reinsurers, the net PML is significant but manageable. Although the parent has continued to provide significant support as noted, A.M. Best believes further support may be required in the case of a significant catastrophic event. Based on State Farm Mutual's history of supporting the majority of its separately capitalized, stand-alone subsidiaries, A.M. Best anticipates that State Farm Florida's claims paying ability will be maintained in both the near and intermediate terms...."