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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MARCH 14, 2008 12:00 AM (EDT)
A.M. Best Co. has placed the financial strength rating (FSR) of B++ (Good) and the issuer credit ratings (ICR) of "bbb" of the Palisades Group (Palisades) (Berkeley Heights, NJ) and its members under review with negative implications.
Concurrently, A.M. Best has placed the FSR of B++ (Good) and ICRs of "bbb" of the wholly owned and separately rated High Point Group (Red Bank, NJ) and its members under review with negative implications.
The Palisades Group is comprised of Palisades Safety and Insurance Association and its wholly owned subsidiary, Palisades Insurance Company, as well as the members of the High Point Group: High Point Preferred Insurance Company, High Point Property and Casualty Insurance Company, High Point Safety and Insurance Company, Twin Lights Insurance Company and Teachers Auto Insurance Company of New Jersey.
These rating actions reflect the March 13, 2008 signing of a definitive agreement for Palisades to purchase National Atlantic Holdings Corporation, including its wholly owned subsidiary, Proformance Insurance Company (Proformance) (both of Freehold, NJ) [NASDAQ: NAHC].
While the execution risk associated with this transaction is partially mitigated as a result of Palisades' historic success in acquiring and integrating books of business, the negative implications reflect the uncertainties regarding this particular integration given Proformance's volatile performance. Furthermore, the acquisition is projected to result in a modest deterioration in Palisades' risk-adjusted capitalization.
The ratings will remain under review pending close of the transaction, which is subject to shareholder and regulatory approval, as well as A.M. Best's meeting with management regarding business plans including anticipated integration and capital management strategies.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.
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.