JUNE 11, 2009 12:00 AM (EDT)

A.M. Best Downgrades Ratings of GMAC Insurance Group & Its Members; Places Ratings Under Review with Developing Implications

Anthony Diodato
(908) 439-2200, ext. 5704
Public Relations
Jim Peavy
(908) 439-2200, ext. 5644

Rachelle Morrow
(908) 439-2200, ext. 5378


OLDWICK, N.J. - JUNE 11, 2009 12:00 AM (EDT)
A.M. Best Co. has downgraded the financial strength rating (FSR) to B++ (Good) from A- (Excellent) and issuer credit ratings (ICR) to "bbb" from "a-" of the GMAC Insurance Group (GMACI) and its members, which are led by Motors Insurance Corporation (Southfield, MI). All ratings have been placed under review with developing implications. (See below for a detailed listing of the companies and ratings.)

The downgrading of the ratings reflects A.M. Best's view of GMAC LLC's operating results, as well as A.M. Best's review of public information, which is not consistent with a parent of "a-" rated insurance companies. Additionally, in A.M. Best's opinion, the reorganization of the voting interest of the insurance entities' holding company, GMACI Holdings, LLC (GMACIH), which has been restructured to revert back to the control of GMAC LLC, its ultimate parent company, demonstrates lack of permanence of such manufactured rating driven solutions. A.M. Best had previously maintained the "a-" rating based on the expectation that the voting interest of GMACIH no longer resided with GMAC LLC on a permanent basis. This decision was made at a time when earnings were not expected to deteriorate to the level currently observed by A.M. Best. With the latest restructuring and subsequent revision in the voting interest of GMACIH, the financial condition of the insurance operations is now directly controlled by GMAC LLC.

Although GMAC LLC has received capital support from the U.S. Treasury and regardless of any change in voting control without true permanence, A.M. Best believes the weak earnings position of GMAC LLC does not support the maintenance of an A- financial strength rating for GMACI. The under review status reflects the prospective organizational uncertainties that will require additional analysis and surveillance.

Offsetting these factors is GMACI's excellent risk-adjusted capitalization, consistently solid operating results and well-established market presence at the insurance operating company level. The insurance group has consistently generated capital through operating earnings reflective of disciplined underwriting, an efficient expense structure and steady stream of investment income.

The ratings will remain under review pending further discussions with management and continued analysis of GMAC LLC.

The FSR has been downgraded to B++ (Good) from A- (Excellent) and the ICRs to "bbb" from "a-" for GMAC Insurance Group and its following members:

- Motors Insurance Corporation

- CIM Insurance Corporation

- GMAC Insurance Company Online, Inc.

- Integon Casualty Insurance Company

- Integon General Insurance Corporation

- Integon Indemnity Corporation

- Integon National Insurance Company

- Integon Preferred Insurance Company

- MIC General Insurance Corporation

- MIC Property and Casualty Insurance Corporation

- National General Assurance Company

- National General Insurance Company

- New South Insurance Company

Separately, the FSR of A- (Excellent) and ICR of "a-" of Integon Specialty Insurance Company (Integon Specialty) (Winston-Salem, NC) has been placed under review with negative implications as a result of a previously signed agreement to sell Integon Specialty to Maiden Holdings, Ltd. (Hamilton, Bermuda). The agreement, which was signed during fourth quarter 2008, is pending regulatory approval.

The negative implications indicate that in the event the transaction is not finalized, the ratings will likely be downgraded. However, upon successful completion of regulatory approval, the outlook for Integon Specialty will be reassessed and likely revised.

For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit Best's Ratings & Analysis.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at Best's Credit Rating Methodology.

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.

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