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FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 01, 2014 10:59 AM (EDT)
A.M. Best has placed under review with developing implications the financial strength rating of A (Excellent) and the issuer credit rating of "a" of Producers Agriculture Insurance Company (PAIC) and its 100% reinsured affiliate, Producers Lloyds Insurance Company (PLIC). Both companies are domiciled in Amarillo, TX.
The rating actions follow the recent announcement that CUNA Mutual Investment Corporation (CMIC), a wholly-owned subsidiary of CMFG Life Insurance Company (Waverly, IA), has entered into a definitive agreement with HCC Insurance Holdings, Inc. (HCC Holdings) (Dover, DE) [NYSE:HCC] under which HCC Holdings will acquire CMIC's subsidiary, Producers Ag Insurance Group, Inc. and its two insurance company subsidiaries, PAIC and PLIC. The current ratings of PAIC and PLIC reflect the explicit support received from reinsurance agreements with current affiliates.
The ratings will remain under review pending the completion of the transaction and the conclusion of A.M. Best's discussions with management of HCC Holdings regarding plans for future operations, business strategy and risk-adjusted capitalization. The transaction is expected to take several months to close, pending regulatory approval.
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:
o Insurance Holding Company and Debt Ratings
o Rating Members of Insurance Groups
o Risk Management and the Rating Process for Insurance Companies
o Understanding BCAR for Property/Casualty Insurers
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.