AM Best has placed under review with developing implications the Financial Strength Rating (FSR) of A (Excellent) and Long-Term Issuer Credit Rating (Long-Term ICR) of “a” of Texas-based National Lloyds Insurance Co. (National Lloyds).
Concurrently, AM Best has placed under review with developing implications the FSR of A (Excellent) and the Long-Term ICR of “a” of American Summit Insurance Co. (American Summit), a National Lloyds affiliate.
National Lloyds and American Summit are domiciled in Dallas and are subsidiaries of Hilltop Holdings Inc. (HTH), a financial holding company based in Texas.
The rating actions follow HTH’s announcement of a definitive agreement with Align Financial Holdings LLC (Align) for the sale of HTH’s wholly owned subsidiary, National Lloyds Corp., an intermediate insurance holding company that owns National Lloyds and American Summit.
The transaction, subject to customary closing conditions and regulatory approvals, is expected to close in second-quarter 2020.
The ratings will remain under review pending the completion of the transaction and AM Best’s discussion with new ownership.
The developing implications are due primarily to the uncertainty and execution risk regarding the transaction and the impact on business profile.
Throughout the under-review period, AM Best will monitor the entities’ risk-adjusted capitalization, operating performance, business profile and enterprise risk management.
Source: AM Best
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