A.M. Best Co. has placed the financial strength ratings (FSR) of “A-” (Excellent) and issuer credit ratings (ICR) “a-” of New York-based National Financial Group and its members, as well as its sister company, National Life Insurance Company of San Juan, Puerto Rico, under review with negative implications.
According to its web site (http://nationalfinancialgroup.net) the Group focuses “on the sub prime marketplace that is often ignored and under serviced by the traditional bank and finance industries.”
Best’s review placement results from “National Financial Group’s recent disclosure to A.M. Best regarding a significant miscalculation in the property/casualty company’s total risk exposures, which are not commensurate with its risk-adjusted capital.”
The rating agency said the “discovery of this miscalculation raises concerns regarding the group’s organizational risk management.” It plans on further meetings with the Group’s management. Until those meetings are held and until Best is able to assess “the impact of the increase in total exposures as well as the corrective actions implemented by management to ensure the rectification of this problem,” the ratings will remain under review.
Best also indicated that the “rating actions on National Life reflect similar concerns regarding enterprise risk management. National Life maintains close synergies with its affiliated property/casualty companies, as well as a cross ownership position in the property/casualty companies.”
Source: A.M. Best