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FOR IMMEDIATE RELEASE
LONDON - AUGUST 18, 2017 09:06 AM (EDT)
A.M. Best has downgraded the Financial Strength Rating to C (Weak) from C+ (Marginal) and the Long-Term Issuer Credit Rating to “ccc+” from “b-” of JSC Salem Insurance Company (Salem) (Kazakhstan). Concurrently, A.M. Best has placed these Credit Ratings (ratings) under review with negative implications.
The rating downgrades follow the suspension by the National Bank of Kazakhstan (NBK) of Salem’s voluntary insurance licence for three months from 4 August 2017. The company has breached a number of regulatory requirements during 2017, including the solvency margin prescribed by the NBK. The action taken by the national regulator has highlighted inadequacies in the company’s risk management practices, particularly in respect of operational and regulatory risks, and is likely to negatively affect Salem’s profile in Kazakhstan’s competitive insurance market.
The ratings have been placed under review with negative implications, as A.M. Best needs to assess the implications of the regulatory action on the company’s profile and its ability to continue to write insurance business in Kazakhstan. Additional regulatory action, for example full suspension or withdrawal of the company’s insurance licence, or deterioration in Salem’s risk-adjusted capitalisation, likely will result in further negative rating actions.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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