Major Rating Factors: Poor long-term capitalization index (0.0 on a scale of 0 to 10) based on weak current risk adjusted capital (severe and moderate loss scenarios). A history of deficient reserves (2.0). Underreserving can have an adverse impact on capital and profits. In 2020, the one year reserve development was 225% deficient.
Other Rating Factors: Weak profitability index (0.9) with operating losses during 2020 and 2021. Average return on equity over the last five years has been poor at -105.5%. Weak overall results on stability tests (0.0) including weak risk adjusted capital in prior years and negative cash flow from operations for 2021. The largest net exposure for one risk is excessive at 139.3% of capital. Fair liquidity (4.4) as cash resources may not be adequate to cover a spike in claims.
Stability Factors: C - Past results on our Risk-Adjusted Capital tests. F - Negative cash flow. L - Past results on our liquidity tests. R - Concerns about the financial strength of its reinsurers.
Principal Lines of Business: Fin guar/surety (100.0%)
Licensed in: NJ, NY, RI, TX, PR
Principal Investments: Investment grade bonds (91.3%), non investment grade bonds (3.7%), cash (0.5%), other (4.6%)