CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - JUNE 09, 2020 02:34 PM (EDT)
AM Best has maintained the under review with negative implications status for the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb-” and the Long-Term Issue Credit Ratings (Long-Term IR) of Hallmark Financial Services, Inc. (Hallmark Financial) [NASDAQ: HALL]. Concurrently, AM Best has maintained the under review with negative implications status for the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term ICRs of “a-” of the members of Hallmark Insurance Group (Hallmark Group). The companies’ operations are headquartered in Dallas, TX. (See below for a detailed listing of the companies and ratings.)
These Credit Ratings (ratings) were placed under review with negative implications on March 4, 2020, following the announcement by Hallmark Financial that its 2019 statutory results will include a pre-tax adverse prior year loss development of $63.8 million, net of reinsurance. At the time, AM Best indicated that the ratings would remain under review until full-year reserve information was assessed.
The maintaining of the under review with negative implications status follows an announcement by Hallmark Financial that it received notice from NASDAQ on May 13, 2020, as a result of the company’s failure to file its Form 10-Q for the period ending March 31, 2020, and because it remains delinquent in filing its Form 10-K for the year ended Dec. 31, 2019. AM Best requires additional time to gauge the depth and breadth of the issues underlying the filing delays. AM Best will continue to assess the impact of these issues, in particular the impact of the adverse reserve development on the group’s risk-adjusted capitalization, operating performance, business profile and enterprise risk management assessments. AM Best will look to resolve the under review status once there is more clarity on the company’s plan to regain compliance with NASDAQ and full-year reserve information is reviewed.
The FSR of A- (Excellent) and the Long-Term ICRs of “a-” remain under review with negative implications for the following members of Hallmark Insurance Group:
The following Long-Term IR remains under review with negative implications:
Hallmark Financial Services, Inc.-
—“bbb-” on $50 million 6.25% senior unsecured notes, due 2029
The following indicative Long-Term IRs for securities available under the shelf registration remains under review with negative implications:
Hallmark Financial Services, Inc.-
—“bbb-” on senior unsecured debt
—“bb+” on subordinated debt
—“bb” on preferred stock
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.