Best’s News & Research Service - March 04, 2016 12:28 PM (EST)
A.M. Best Withdraws Issuer Credit Rating of Maiden Re – ARI Reinsurance Trust Agreement
- March 04, 2016 12:28 PM (EST)
Oldwick //BestWire// - A.M. Best has affirmed the issuer credit rating (ICR) of “aa” of the Maiden Re – ARI Reinsurance Trust Agreement (trust) (Mt. Laurel, NJ). The outlook for the rating is stable. Concurrently, A.M. Best has withdrawn the rating due to Maiden Re management’s request to no longer participate in A.M. Best’s interactive rating process. The beneficiary of the trust, ARI Mutual Insurance Company and ARI Casualty Company (collectively known as ARI), both corporations organized under the laws of the state of New Jersey, has been acquired by AmTrust Financial Services, Inc. and is no longer an active client of Maiden Reinsurance North America, Inc. (MRNA) (formerly Maiden Reinsurance Company), a corporation organized under the laws of the state of Missouri.
This trust agreement, with an effective date of Jan. 1, 2010, is between Maiden Reinsurance Company (Maiden Re, the grantor), ARI (the beneficiary) and State Street Bank and Trust Company, a Massachusetts trust company (the trustee). The trust collateralizes liabilities assumed by MRNA from ARI. MRNA and ARI are wholly responsible for determining the liabilities (the collateral base), which consist of case loss reserves, incurred but not reported losses and unearned premiums, net of open balances. The collateral base of the trust represents the amount ARI expects the trust to secure as payments under various reinsurance agreements with MRNA.
A.M. Best’s ICR for the trust considers the following: an evaluation of specific risks, such as market and operational risks, which may affect the value of the assets in the trust; whether the amount in the trust will be sufficient to meet MRNA’s obligation to pay an amount equal to the collateral base; the duration of the investment asset in the trust; and the uncertainty surrounding the treatment of the trust’s assets in the event of MRNA’s impairment or insolvency. A.M. Best is not responsible for determining the adequacy of the collateral base, any errors or miscalculations of the collateral base or whether the collateral base accurately reflects the current liabilities under the various reinsurance agreements between ARI and MRNA.
This press release relates to rating(s) that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page.
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