S&P Affirms Trenwick Group’s units ‘CCC’ Ratings

June 25, 2003

Standard & Poor’s Ratings Services announced that it has removed from CreditWatch and affirmed its ‘CCC’ counterparty credit and financial strength ratings on Trenwick Group Ltd.’s operating subsidiaries: Trenwick America Reinsurance Corp., Dakota Specialty Insurance Co., Insurance Corp. of NY, LaSalle Re Ltd., and Trenwick International Ltd. All of the ratings carry a “negative” outlook.

S&P then announced that it has withdrawn “these ratings at the request of management.” S&P credit analyst Karole Dill Barkley indicated the “ratings had been placed on CreditWatch on March 4, 2003, because of the companies’ weakened condition and the possibility of regulatory action.”

S&P added “Following the cessation of the Chubb Corp. underwriting arrangement with Trenwick America Reinsurance Co., the operations at Lloyds are the only Trenwick operations that are not effectively in runoff.

“At year-end 2002, Trenwick’s auditors noted that because of the debt obligations and Trenwick’s potential inability to satisfy certain collateral obligations, there was substantial doubt about the company’s ability to continue as a going concern. Filings with the SEC further disclose that Insurance Corp. of America and Trenwick America Reinsurance Co. are operating with considerable guidance and close oversight from their regulators under letters of understanding.”

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