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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