Major Rating Factors: Weak overall results on stability tests (0.0 on a scale of 0 to 10) including weak risk adjusted capital in prior years. The largest net exposure for one risk is excessive at 68.5% of capital. Strengths include potentially strong support from affiliation with MBIA Inc. Poor long-term capitalization index (0.3) based on weak current risk adjusted capital (severe and moderate loss scenarios).
Other Rating Factors: A history of deficient reserves (0.4) that places pressure on both capital and profits. In the last five years, reserves (two year development) fluctuated between 335% and 75% deficeint. Weak profitability index (0.1) with operating losses during 2019, 2020 and the first six months of 2022. Average return on equity over the last five years has been poor at -56.2%. Vulnerable liquidity (2.0) as a spike in claims may stretch capacity.
Stability Factors: C - Past results on our Risk-Adjusted Capital tests. D - Limited diversification of general business, policy, and/or investment risk. G - Fast asset or premium growth. L - Past results on our liquidity tests.
Principal Lines of Business: Fin guar/surety (100.0%)
Licensed in: All states, the District of Columbia and Puerto Rico
Principal Investments: Investment grade bonds (64.5%), non investment grade bonds (17.0%), cash (11.7%), common stock (2.0%), other (4.9%)