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FOR IMMEDIATE RELEASE
OLDWICK - MARCH 20, 2015 02:17 PM (EDT)
A.M. Best has downgraded the financial strength rating to C++ (Marginal) from B (Fair) and the issuer credit rating to "b" from "bb" of Preferred Contractors Insurance Company Risk Retention Group, LLC (PCIC) (Billing, MT). The ratings have been removed from under review with negative implications and the outlook assigned to both ratings is negative. Concurrently, A.M. Best has withdrawn the ratings in response to the company's request to no longer participate in A.M. Best's interactive rating process.
The rating downgrade reflects PCIC's weakened risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio, significant growth in premium volume that well exceeded projections in the prior year and sharp increase in adverse loss reserve development. The downgrade also reflects the uncertainty of future results in the near term regarding the company's adverse development coverage, management initiatives and continual changes in quota share agreements. PCIC has requested to discontinue its participation in the rating process as the company has arranged for another insurer to provide cut through endorsements to PCIC's policies.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
This press release relates to rating(s) 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 visit A.M. Best's Ratings & Criteria Center .
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