S&P Assigns Statewide ‘R’ Rating

Standard & Poor’s Ratings Services has assigned its ‘R’ financial strength rating to Waukegan, Ill.-based Statewide Insurance Co. after the Illinois Department of Insurance ordered the company to be liquidated on the basis of insolvency, effective Jan. 6, 2004.

This rating action reflects the impairment of Statewide’s statutory surplus in excess of $21 million. Illinois Director of Insurance, J. Anthony Clark will be the statutory liquidator and will marshal the assets and identify the company’s creditors. The Illinois Insurance Guaranty Fund as well as other organizations in the other licensed states will be responsible for the claims and the defense of the policyholders.

Formed in 1979, Statewide has licenses in 26 states. It wrote commercial multiple peril, workers’ compensation, commercial auto, umbrella insurance policies, and surety bond. It marketed its products primarily to small general contractors and artisans. For the first ten months of 2003 it reported $13.7 million in direct premiums written.

An insurer rated ‘R’ is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the regulators may have the power to favor one class of obligations over others or pay some obligations and not others. The rating does not apply to insurers subject only to nonfinancial actions such as market conduct violations.