AM Best


A.M. Best Assigns Ratings to Sentruity Casualty Company


CONTACTS:


Analyst(s)

Alexander Sarfo

(908) 439-2200, ext. 5779

alexander.sarfo@ambest.com

Steven Chirico

(908) 439-2200, ext. 5087

steven.chirico@ambest.com


Public Relations

Jim Peavy

(908) 439-2200, ext. 5644

james.peavy@ambest.com

Rachelle Morrow

(908) 439-2200, ext. 5378

rachelle.morrow@ambest.com


FOR IMMEDIATE RELEASE

OLDWICK, N.J. - JULY 03, 2008 12:00 AM (EDT)
A.M. Best Co. has assigned a financial strength rating (FSR) of A- (Excellent) and an issuer credit rating (ICR) of "a-" to Sentruity Casualty Company (Sentruity) (Houston, TX), a wholly owned subsidiary of the privately held GS Administrators, Inc. (GSA) (Houston, TX). The outlook assigned to both ratings is stable.

Concurrently, A.M. Best has withdrawn the FSR of A- (Excellent) and ICR of "a-" and assigned a category NR-5 (Not Formally Followed) to GSFS Risk Retention Group, Inc. (GSFS RRG) (Charleston, SC). This is in response to GSFS RRG having been merged into Sentruity.

These rating actions reflect Sentruity's solid capitalization, overall profitable operating results, prospective risk-adjusted capitalization of the combined entities and additional financial and operating benefits derived from its affiliation with Gulf States Financial Services Group (GSFS Group), a group of companies controlled by an individual who is committed to providing financial support when required.

Partially offsetting these positive rating factors is GSFS RRG's fluctuating underwriting income over a five-year period and Sentruity's exposure to concentration risk derived from its defined mission of providing contractual liability insurance coverage to GSA, a writer of extended auto warranty coverage, and GS Warranty Services, Inc. (GSWS), a writer of used auto warranty coverage with affiliated companies.

GSA and GSWS only sell automobile-related financial products; however, geographic diversification is adequate since Sentruity is registered in nine states and have licenses pending in other states.

Another offsetting rating factor is that the auto warranty business is particularly competitive and presents limited ability to participants to control rates due to these competitive pressures. This is mitigated, in part, through the use of a variety of claim control mechanisms throughout the book of business. Sentruity benefits from the attention of a dedicated management team that has a long history of experience in different areas of the automobile sales, service and financing businesses.

Sentruity has met A.M. Best's stringent capital requirements for new company and/or merger formations and the ratings are a reflection of the company's ability to meet A.M. Best's arduous prospective risk-adjusted capitalization requirements. The capitalization is expected to remain supportive of its annual projected business growth through 2010; however, A.M. Best remains concerned that the current pressures facing the automotive industry can lead to a decline in Sentruity's performance and profitability.

A.M. Best remains the leading rating agency of captive insurers rating a wide variety of more than 200 captives in the United States and throughout the world.

For current Best's Ratings and independent data on the captive and alternative insurance market, please visit Best's Captive Center.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

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