Standard & Poor’s Ratings Services has stated that its ratings on XL Capital Ltd. (currently ‘A’ / Negative), all of XL’s related operating and holding companies, and Winterthur Swiss Insurance Co. (currently ‘A-’ / Stable) “are likely to be unaffected by an actuarial decision that could result in an additional pretax charge of $909 million for either XL or Winterthur.”
S&P noted that the “eventual decision of the independent actuary relates to the settlement of a three-year reserve-seasoning process between the two companies associated with the sale of Winterthur International, a former subsidiary of Winterthur, to XL Insurance (Bermuda) in July 2001.
“If the actuarial decision goes against XL, Standard & Poor’s expects that XL would be able to offset the charge significantly through improving earnings and the generation of surplus in 2005. If the decision goes against Winterthur, Standard & Poor’s expects that Winterthur would be able to partly offset a potential need to increase provisions by $909 million through improving earnings.”
In addition S&P noted that it “continues to be comforted by Credit Suisse Group’s commitment to provide financial support to Winterthur if necessary as long as Winterthur remains within the group.” S&P rates Credit Suisse “A” with a stable outlook.
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