Florida Cat Fund Questions Risk Trigger Insurer Ratings

A.M. Best Co. says based on the credit market contraction and the uncertainty regarding the Florida Hurricane Catastrophe Fund’s ability to fund its claims-paying capacity, it placed several insurers’ ratings under review with negative implications.

The rating actions are a follow-up to a press release issued on Oct. 15, in which A.M. Best reiterated its concerns with the uncertainty associated with the contingent capital nature of the CAT Fund.

A.M. Best continues to assess the impact on rated entities’ risk-adjusted capitalization, based on the reduction in the potential coverage available from the CAT Fund. As a result, despite near completion of the 2008 hurricane season, several rated entities have been put under review with negative implications.

The following rated entities have been placed under review with negative implications: Allstate Floridian Insurance Group; Argus Fire & Casualty Insurance Co.; Omega Insurance Co.; Safeway Property Insurance Co.; Tower Hill Preferred Insurance Co.; Tower Hill Prime Insurance Co.; United Automobile Insurance Group.