Best’s News & Research Service - August 18, 2017 09:07 AM (EDT)
A.M. Best Downgrades Credit Ratings of JSC Salem Insurance Co.; Places Credit Ratings Under Review With Negative Implications
- August 18, 2017 09:07 AM (EDT)
London //BestWire// - 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.
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