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FOR IMMEDIATE RELEASE
OLDWICK - JULY 13, 2023 09:13 AM (EDT)
AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Best Meridian International Insurance Company, I.I. (BMIIC II) (San Juan, PR). The outlook assigned to these Credit Ratings (ratings) is negative.
The ratings reflect BMIIC II’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
BMIIC II is a newly formed entity domiciled in Puerto Rico. This entity was established for the re-domestication of the business currently written through Best Meridian International Insurance Company SPC (BMIIC) in the Cayman Islands. Both Puerto Rico and the Cayman Islands have approved in principle a transfer of financial position that will effectively shift all the assets and liabilities, as well as the policies from the Cayman entity to the Puerto Rico entity. As a result, AM Best is considering BMIIC II a continuation of the BMIIC business with a new Puerto Rico domicile and as a result extending a current group ratings, which also apply to Best Meridian Insurance Company (Miami, FL); the group is collectively referred to as Best Meridian.
The current outlook assigned to Best Meridian, which will now include BMIIC II, is negative. The outlook was assigned in October of 2022, and it reflects the deterioration driven by severe losses at Best Meridian in 2021 due to the COVID-19 pandemic, as well as increases in reinsurance recoverables associated with a relatively new property/casualty reinsurance business, and high deferred acquisition costs due to increased life insurance sales. Company ownership has committed to re-capitalizing the business following the deterioration in its risk-adjusted capitalization as of year-end 2021 and in the first half of 2022. AM Best continues to monitor ownership’s recapitalization program, which intends to restore Best Meridian to the capital position it enjoyed before incurring excess losses in 2021 through a series of capital injections in 2022 and 2023 to supplement earnings.
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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.