Press Release - MARCH 05, 2015
A.M. Best Downgrades Ratings of Lumbermen's Underwriting Alliance
FOR IMMEDIATE RELEASE
OLDWICK - MARCH 05, 2015
The rating downgrade reflects the order by the Missouri Department of Insurance on Feb. 27, 2015 to place the exchange under regulatory supervision. LUA's $22.5 million deficit position, as stated in its recently filed year-end 2014 statutory balance sheet, resulted from an unexpected shortfall in collateral held related to LUA's largest subscriber, TS Employment, Inc., which filed for Chapter 11 bankruptcy on Feb. 2, 2015 citing approximately $95 million of federal tax debt. As a result of TS Employment, Inc.'s sudden deterioration, it was determined that LUA's collateral held was insufficient to fund its large workers' compensation deductible under the company's professional employer organization policy.
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:
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