Ratings Roundup: National Group, Fremont Michigan

August 17, 2011

A.M. Best Co. has downgraded the financial strength rating (FSR) to ‘E’ (Under Regulatory Supervision) from ‘D’ (Poor) and issuer credit rating (ICR) to “rs” from “c” of Florida-based National Group Insurance Company (NGIC), a wholly owned, 100 percent reinsured subsidiary of National Insurance Company (NIC), which is based in Hato Rey, Puerto Rico. Both ratings have been removed from under review with developing implications. The actions on the ratings of NGIC “follow confirmation that the Department of Financial Services of the State of Florida issued an order of rehabilitation for NGIC, effective August 1, 2011,” Best explained. “On May 31, 2011, Best downgraded the FSR to ‘E’ (Under Regulatory Supervision) and the ICR to “rs” of NIC following confirmation that the Office of the Commission of Insurance of Puerto Rico issued an order of rehabilitation for NIC, effective May 16, 2011.”

A.M. Best Co. has withdrawn the issuer credit rating (ICR) of “bbb-” of Fremont Michigan InsuraCorp, Inc. following its August 1, 2011, acquisition by Auto Club Insurance Association (ACIA) of Dearborn, Mich. Best noted that “concurrent with the acquisition, Fremont Michigan is no longer a publicly traded company and has merged with ACG Acquisition Company, Inc., a wholly owned subsidiary of ACIA, with the surviving entity named ACG Fremont InsuraCorp, Inc. The financial strength rating of ‘A-‘ (Excellent) and ICR of “a-” of ACG Fremont InsuraCorp, Inc.’s wholly owned subsidiary, Fremont Insurance Company, is unaffected as a result of this transaction. The outlook for both ratings is stable.”

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