OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has placed the financial strength rating of B++ (Good) and issuer credit rating of “bbb+” of Colorado Farm Bureau Mutual Insurance Company (Colorado Farm Bureau) (Centennial, CO) under review with developing implications.
Colorado Farm Bureau is currently in the process of merging with three other mutual entities, Farm Bureau Mutual Insurance Company of Arkansas, Inc, Louisiana Farm Bureau Mutual Insurance Company and South Carolina Farm Bureau Mutual Insurance Company.
While the merger is expected to result in an entity with a significantly greater premium and capital base, the under review status of Colorado Farm Bureau reflects the uncertainties associated with the merger and how the ultimate arrangements to be made impacts the company’s risk-adjusted capital position.
A.M. Best plans to resolve the under review status upon the completion of the transaction. Pending regulatory and policyholder approvals, the transaction is expected to be completed by year-end 2011.
The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Understanding BCAR for Property/Casualty Insurers”; “A.M. Best’s Ratings & the Treatment of Debt”; “Risk Management and the Rating Process for Insurance Companies”; “Natural Catastrophe Stress Test Methodology”; and “Catastrophe Risk Management Incorporated Within the Rating Analysis.” Methodologies can be found at www.ambest.com/ratings/methodology.
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