S&P lowered its counterparty credit and insurer FSR for U.K.-based insurer Independent Insurance Co. Ltd. to “BB” from “BBB+.” S&P also revised the Credit Watch implications on Independent to negative, from developing, where they were placed on May 24 of this year.
The lowering of the ratings comes after the failure to complete capital raising plans being pursued by its parent company, Independent Insurance Group PLC, and the subsequent temporary suspension of business, pending clarification of the appropriate level of technical provisions and the reinsurance position. The “BB” rating is a reflection of the company’s decreased capital position, along with its significantly tarnished business reputation.
The CreditWatch negative report reflects the possible further deterioration in the group’s financial position if the technical provisions need to be increased and the reinsurance protection turns out to be insufficient.
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