The financial strength rating of Frontier Insurance Group and its subsidiaries has been downgraded from B to C++, reflecting the group’s increased financial vulnerability stemming from additional losses incurred as the result of accounting changes arising from the year-end audit.
Some of these financial issues were not anticipated by Frontier Group’s management or by A.M. Best in connection with the previous downgrade on March 17. The accounting changes resulted in a $45.5 million increase in the GAAP net losses reported in the fourth quarter and for the year-end. They will cause a further reduction in statutory surplus in the first quarter 2000.
Frontier responded to the downgrade, saying it disagrees with Best, and has taken the necessary steps to strengthen its financial positions.
“Our policyholders continue to be protected and we have arrangements and contingency plans in place to provide our agents with the support they need,” company President Mark H. Mishler said in a prepared statement.
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