S&P Affirms Motors Insurance Corp. & Subsidiaries 'Api' Rating

  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  revenues.   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  group support.   The single-'Api' financial strength rating is affirmed for all MIC's  reinsured subsidiaries:           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  said.      SOURCE  Standard & Poor's Ratings Services  /CONTACT:  Polina Chernyak, New York, 212-438-7179, for Standard & Poor's  Ratings Services/   /Web site:  http://www.standardandpoors.com/ratings/   (GM)   CO:  Standard & Poor's Ratings Services; Motors Insurance Corp.; General    Motors Corp.  ST:  New York  IN:  FIN INS  SU:  RTG  
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