A.M. Best has downgraded the financial strength rating to E (Regulatory Supervision) from C- (Weak) and the issuer credit rating to “rs” from “cc” of Interstate Bankers Casualty Co. (Interstate Bankers) of Chicago, Ill.
The rating actions reflect Interstate Bankers being placed under regulatory supervision by the State of Illinois due to a Finding of Insolvency. The Agreed Order of Rehabilitation was signed and executed on May 1, 2014.
The deterioration in Interstate Bankers’ operating results was driven by adverse loss reserve development on its non-standard automobile book of business, which resulted in a sharp decline in policyholders’ surplus and a significant decrease in risk-adjusted capitalization.
Source: A.M. Best Co.