NEW YORK, Sept. 29 /PRNewswire/ -- Standard & Poor's today affirmed its
single-'Api' financial strength rating on Motors Insurance Corp. (MIC) and its
reinsured property and casualty subsidiaries (see list).
The rating is based on the company's extremely strong capitalization and
good operating performance, partially offset by volatility in its premium
The company mainly writes private passenger and commercial automobile
physical damage and auto extended warranty coverages, marketed through
General Motors Acceptance Corp. (GMAC) and non-GMAC financed dealerships.
The company has maintained intercompany reinsurance arrangements in which
it assumes a substantial portion of the insurance programs produced by it
property and casualty subsidiaries.
The company redomesticated from New York State to Michigan, effective
April 30, 1999. It is licensed in all states, the District of Columbia, and
Canada. It began business in 1939.
Major Rating Factors:
-- Capitalization was extremely strong at year-end 1999, as indicated by a
Standard & Poor's capital adequacy ratio of 286%. The company's
surplus, which stood at $1.6 billion at year-end 1999, has grown at a
compound annual rate of 9.5% since 1992.
-- Operating performance has been good, with the time-weighted
return on revenue from 1996 to 1999 at 9.2%.
-- The company's 1999 unaffiliated common stock leverage is high
(77% of policyholder surplus). At year-end 1999, the company was
exposed to interest-rate risk, with the ratio of collateralized
mortgage obligations and loan-backed bonds at 0.9 times surplus.
-- The company has a history of volatility in its premium revenues,
with year-to-year changes in net premiums written ranging from minus
13.5% to plus 100.7% since 1994. The increase in net premiums written
to $2.1 billion in 1998 from $1.05 billion in 1997 was primarily due to
the acquisition of the Integon group of companies, of which MIC assumed
100% of the net business.
The company (NAIC:22012) is a wholly owned subsidiary of GMAC Insurance
Holdings Inc., which is wholly owned by General Motors Acceptance Corp.
(counterparty credit rating single-'A'), a wholly owned subsidiary of
General Motors Corp. (NYSE: GM). Although the company is a downstream
subsidiary of GM, the rating does not include additional credit for implied
The single-'Api' financial strength rating is affirmed for all MIC's
CIM Insurance Corp. (NAIC:22004)
MIC Property & Casualty Insurance Corp. (NAIC:38601)
MIC General Insurance Corp. (NAIC:38660)
National General Insurance Co. (NAIC:23728)
National General Assurance Co. (NAIC:42447)
'pi' ratings, denoted with a 'pi' subscript, are insurer financial
strength ratings based on an analysis of an insurer's published financial
information and additional information in the public domain. They do not
reflect in-depth meetings with an insurer's management and are therefore based
on less comprehensive information than ratings without a 'pi' subscript. 'pi'
ratings are reviewed annually based on a new year's financial statements, but
may be reviewed on an interim basis if a major event that may affect the
insurer's financial security occurs. Ratings with a 'pi' subscript are not
subject to potential CreditWatch listings.
Ratings with a 'pi' subscript generally are not modified with 'plus' or
'minus' designations. However, such designations may be assigned when the
insurer's financial strength rating is constrained by sovereign risk or the
credit quality of a parent company or affiliated group, Standard & Poor's
SOURCE Standard & Poor's Ratings Services
/CONTACT: Polina Chernyak, New York, 212-438-7179, for Standard & Poor's
/Web site: http://www.standardandpoors.com/ratings/
CO: Standard & Poor's Ratings Services; Motors Insurance Corp.; General
ST: New York
IN: FIN INS
-0- Sep/29/2000 20:44 GMT
EOS (PRN) Sep/29/2000 16:44 85
-0- (PRN) Sep/29/2000 20:59 GMT
Press spacebar to pause and continue. Press esc to stop.