S&P Affirms Motors Insurance Corp. & Subs. `Api' Rtg

Business Editors  
NEW YORK--(BUSINESS WIRE)--Standard & Poor's--Sept. 29, 2000-- 
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 its 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.---CreditWire. 
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