Casualty Reciprocal Exchange Pool Cut

July 8, 2002

Standard & Poor’s cut to double-“Bpi” from triple-“Bpi” its counterparty credit and financial strength ratings on Casualty Reciprocal Exchange’s interaffiliate pool members Equity Mutual Insurance Co. (EMI) and Casualty Reciprocal Exchange. The action was taken because of a decline in capitalization, marginal operating performance and a lower liquidity ratio based on Standard & Poor’s model.
The pool, which is headquartered in Kansas City, Mo., writes mainly workers’ compensation and private passenger auto with an additional specialization in reinsurance. More than one-half of the pool’s business lies within the states of California, New Jersey, Texas, Florida, and Pennsylvania. The group distributes its products through salaried marketing representatives working through endorsed trade association and program agents targeting selected industry segments (workers’ compensation).

The companies are members of the Dodson Group, a midsize insurance group with surplus of $30.1 million as of year-end 2001 and, together, are licensed in 40 states and the District of Columbia.

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