CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - APRIL 19, 2011 12:00 AM (EDT)
A.M. Best Co. has commented that the issuer credit rating (ICR) of Fremont Michigan InsuraCorp, Inc. (Fremont Michigan) [OTCQB: FMMH] and the financial strength rating and ICR of its wholly owned subsidiary, Fremont Insurance Company (Fremont), remain unaffected after the announcement that Fremont Michigan has entered into a definitive agreement to be acquired by Auto Club Insurance Association (ACIA) (Dearborn, MI). The outlook for all ratings is stable.
The board of directors of Fremont Michigan has approved the proposed transaction and recommended that Fremont Michigan's shareholders vote to approve the merger. The board of governors of ACIA also voted in support of the merger. The transaction is subject to the receipt of regulatory approvals and approval by a majority of Fremont Michigan's shareholders. The transaction is expected to close in the third quarter of 2011. Concurrent with the closing of the transaction, A.M. Best will withdraw the ICR of Fremont Michigan as it will be merged into a newly formed privately held subsidiary holding company of ACIA.
A.M. Best has discussed the transaction with Fremont's management and evaluated the proposed post-acquisition capitalization and business plan.
The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding BCAR for Property/Casualty Insurers"; "Natural Catastrophe Stress Test Methodology"; "Catastrophe Risk Management Incorporated Within the Rating Analysis"; and "Rating Members of Insurance Groups." Methodologies can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.