CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - DECEMBER 20, 2016 02:47 PM (EST)
A.M. Best has downgraded the Financial Strength Rating to B- (Fair) from B (Fair) and the Long-Term Issuer Credit Rating to “bb-” from “bb” of Golden Insurance Company, A Risk Retention Group (Golden) (Incline Village, NV). Concurrently, A.M. Best has placed the Credit Ratings (ratings) under review with negative implications.
The rating downgrades are due to the receipt of third-quarter financial statements, which account for revised premium earning patterns prescribed by the Nevada Division of Insurance. As a result of this change, statutory surplus has decreased materially, and there has been a material reduction in the company’s overall risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). Additionally, Golden has experienced a rise in underwriting and loss adjustment expenses that somewhat have deteriorated underwriting results.
The new premium earning pattern creates inconsistencies with the company’s prior BCAR model, specifically regarding the unearned premium reserve equity. The ratings will remain under review until the company’s 2016 year-end actuarial report, which reflects the new earning pattern and year-end 2016 results, can be fully analyzed.
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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.