Abstract
Ratings of Guaranty National Insurance Company indicated a negative outlook and it was decided that certain parameters of the company would be kept under review. The article below highlights the essential features of the ratings by A.M Best Co.
The company was formed in March 1955 by the name Guaranty National Insurance Company. The company underwent restructuring in the year 1973.
Thereafter the name of the company was changed to “Guaranty National Corporation” or GNC. This gave rise to a new wholly owned subsidiary.
The new subsidiary was set up, which operated under the name Guaranty National Insurance Company. As a result of the formation of the new subsidiary, the liabilities and assets were taken over by the subsidiary company.
Guaranty National Insurance Company was ranked by A.M Best Co. The rankings or ratings performed by A.M Best Co are regarded as one of the most reliable. 1899 was the year when this rating company was formed and perhaps makes this the oldest rating companies.
Financial Strength Ratings or FSR:
Formerly, the financial strength rating was B-. This was changed to C++. In the context of issuer credit ratings or ICR, A.M Best Co has been assigned “b+”.
However, the ratings pertaining to financial strength rating as well as issuer credit ratings do not have a stable outlook. The company ratings pertaining to both the parameters (financial strength rating and issuer credit rating) are “under review”. They are said to depict “negative implications”. This was the status of the company as of March 2007. The company at that point of time was under review until the company management took further measures.
Inference from Ratings-company kept under review:
The ratings imply that the capitalization of the company, which is “risk adjusted”, was backsliding. The business profile is also of limited nature. The decision of the company to remain under review was approved by Arizona Department of Insurance.