Highlands Revised to ‘R’

Standard & Poor’s Ratings Services revised its financial strength ratings (FSR) on Highlands Insurance Co. and affiliated companies to “R” from triple-“Cpi” following insurance holding company Highlands Insurance Group Inc.’s announcement on Oct. 31, 2002, that it filed for Chapter 11 bankruptcy protection in Delaware.

The company filed a reorganization plan and cancelled its common stock with no consideration paid to shareholders. Prior to filing for bankruptcy protection, Highlands Insurance Group Inc. was already in the process of a plan, adopted in December 2001, to run-off its insurance business and cease issuing new or renewal policies except as otherwise required by law.

Highlands Insurance Co. and its affiliates are wholly owned subsidiaries of the Highlands Insurance Group Inc. As of June 30, 2002, Highlands Insurance Group Inc. listed assets of $1.64 billion and liabilities of $1.82 billion.