Standard & Poor’s lowered its financial strength rating on medical insurer Lawrenceville Property and Casualty Co., a division of the troubled medical insurer MIIX Group, by two rating categories to single-’Bpi’.
S&P gave as its primary reason MIIX’s $152 million pretax net loss for the year ending Dec. 21, 2001. The “pi” designation indicates that the rating is based on public information.
The announcement indicated that “MIIX Group’s net loss reserves were increased by $64.5 million to address a trend of loss severity that emerged in the last half of 2001. Standard & Poor’s believes the magnitude of these reserve developments weakened the group’s risk-based capitalization. Any additional adverse development could impair the financial strength and ongoing viability of the group.”
S&P said it would continue “to monitor the group for financial developments that might further impair the organization’s financial strength.”
The lowered rating increases the pressure on Stewart J. Gerson, MIIX’s recently appointed CFO, to implement the new business plan designed by the Board of Directors and CEO Patricia Costante, to stem the losses and rebuild the company.
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