It seems hard to reconcile the Superior A+ rating of CSI Central States Indemnity, with the heightened financial, legal, and reputation risk posed by the ongoing questionable market practices that have drawn the attention of Federal and State regulators, and have led to far reaching,large monetary settlements by their partners in selling CSI products.
A closer examination of settlement agreements and proceedings leading up to demonstrate that the most egregious behaviors toward consumers went on, and appear to be ongoing at CSI and its subsidiary companies.
The A+ rating above appears to underestimate the potential impact of future regulatory penalties, in terms of financial, and operational risks. To the extent that CSI could be subject to sanctions that limit its ability to continue in certain markets/ and or compells CSI to curtail certain practices that have resulted in very low payout rates on claims,the companies ability to generate revenue and capital going forward could be very severely impaired.
The A+ (Superior) rating for Central States Indemnity is hard to reconcile with the risks posed by potential regulatory actions related to sales/claims handling practices for various consumer targeted products that have resulted in high profile/high dollar value settlements and penalties for CSI’s financial institution marketing partners.
As an insurer, certainly the regulatory process related these CSI products and practices will take longer to run its course, however, the potential penalties, could severely impact both current capital levels and operating flexibility to continue in some market segments. At a minimum, it would seem , CSI is likely to be forced to abandon practices that have produced extraordinarily low claims payout rates in past periods. The prospective environment for CSI, may be less forgiving for market practices that have historically allowed for very low rates of claims completed and paid. In addition, the reputation risk and potential for being effectively barred from certain market segments, could severely hamper the ability for CSI to maintain and generate capital in the future.
Something to keep a close eye on from a rating stability perspective.
Washington , DC
It seems hard to reconcile the Superior A+ rating of CSI Central States Indemnity, with the heightened financial, legal, and reputation risk posed by the ongoing questionable market practices that have drawn the attention of Federal and State regulators, and have led to far reaching,large monetary settlements by their partners in selling CSI products.
A closer examination of settlement agreements and proceedings leading up to demonstrate that the most egregious behaviors toward consumers went on, and appear to be ongoing at CSI and its subsidiary companies.
The A+ rating above appears to underestimate the potential impact of future regulatory penalties, in terms of financial, and operational risks. To the extent that CSI could be subject to sanctions that limit its ability to continue in certain markets/ and or compells CSI to curtail certain practices that have resulted in very low payout rates on claims,the companies ability to generate revenue and capital going forward could be very severely impaired.
The A+ (Superior) rating for Central States Indemnity is hard to reconcile with the risks posed by potential regulatory actions related to sales/claims handling practices for various consumer targeted products that have resulted in high profile/high dollar value settlements and penalties for CSI’s financial institution marketing partners.
As an insurer, certainly the regulatory process related these CSI products and practices will take longer to run its course, however, the potential penalties, could severely impact both current capital levels and operating flexibility to continue in some market segments. At a minimum, it would seem , CSI is likely to be forced to abandon practices that have produced extraordinarily low claims payout rates in past periods. The prospective environment for CSI, may be less forgiving for market practices that have historically allowed for very low rates of claims completed and paid. In addition, the reputation risk and potential for being effectively barred from certain market segments, could severely hamper the ability for CSI to maintain and generate capital in the future.
Something to keep a close eye on from a rating stability perspective.
Washington , DC