S&P Assigns White Hall Mutual Insurance Co. ‘R’ Rating

April 25, 2003

Standard & Poor’s Ratings Services announced that that it has assigned its ‘R’ financial strength rating to White Hall Mutual Insurance Co., a 160-year-old P/C insurer based in Doylestown PA, following the order from the Pennsylvania Insurance Department that the company be liquidated on the basis of insolvency, effective April 10, 2003.

“In 2002, White Hall’s impaired financial position reflected emerging loss development trends that required the company to record about $1 million in development on prior-accident-years losses and loss adjustment expenses,” indicated S&P credit analyst James Sung. “In addition, the company’s financial position was hurt by reinsurance rate increases that affected profit margins and unrealized capital losses attributable to the weak equity markets.”

In 2002 White Hall reported about $8 million in assets, $1 million in surplus, and $970,000 in net losses. S&P noted that ‘an insurer rated ‘R’ is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the regulators may have the power to favor one class of obligations over others.”

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