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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MARCH 11, 2003 12:00 AM (EST)
A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of Hampton Re Limited (Hamilton, Bermuda) a wholly-owned subsidiary of Hampton Re Holdings Limited (Holdings). The rating outlook has been revised to negative from stable.
This rating action follows the recommendation by Hampton Re's board of directors to shareholders to voluntarily wind down its operations. Hampton Re has indicated that it will engage in an orderly return of shareholder equity through a two-stage process, which it intends to have completed before the end of 2003. These actions are subject to shareholder and regulatory approval.
A.M. Best's rating action reflects the view that Hampton Re will be able to maintain a level of capital protection for policyholders that is more than adequate to support its insurance and investment risks, including the requirements to complete its planned wind-down. The sale or recapture of the company's three blocks of life and annuity business will serve as the principal means by which the wind-down will be affected.
A.M. Best will monitor Hampton Re's ability to execute the disposition of its operations relative to plan and expects to withdraw the rating upon completion of the wind-down. The negative outlook reflects the execution risk associated with the company's wind-down process. During this wind-down period, the rating could be lowered if Hampton Re experiences any material deterioration in its financial position.
Hampton Re, a Bermuda based life reinsurance company sponsored by JPMorgan Chase & Co. attained an initial A.M. Best rating in October 2001. An affiliate of JPMorgan Chase & Co. owns common shares in Hampton Re representing approximately 9.9% of Hampton Re's voting rights. JPMorgan Chase Bank provides a collateralized credit facility to support Hampton Re's business activities. This facility, which was recently extended by JPMorgan Chase Bank, is expected to be extended further to accommodate Hampton Re's anticipated wind-down period.
A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source.