A.M. Best Removes from Under Review and Upgrades Ratings of Business Alliance Insurance Company

2008-11-08 16:28:01 -

www.ambest.com - A.M. Best Co. has removed from under review with positive implications and assigned a stable outlook to Business Alliance Insurance Company (BAIC) (San Bruno, CA). A.M. Best also has upgraded the financial strength rating to B++ (Good) from B (Fair) and issuer credit rating to "bbb" from "bb" of BAIC.

These actions follow the October 21, 2008

acquisition of BAIC by PSM Holding Corporation (PSMHC), a subsidiary of Public Service Mutual Insurance Company (PSM) (both of New York, NY). PSM is the lead company of the Magna Carta Companies, which also includes Paramount Insurance Company (both of New York, NY) and Western Select Insurance Company (Los Angeles, CA). PSMHC's plans call for BAIC to eventually reinsure substantially all of its in-force business with PSM, as well as new and renewal writings.

The ratings recognize the complementary nature of BAIC's small business owners clientele and producer plant with that of PSM's, as well as the expected benefits to be gained under the ownership of a much larger parent with substantially more resources and capital available to support BAIC on a going forward basis. Furthermore, with the protracted litigation and resulting uncertainty over the change in ownership now behind BAIC, the company is free to concentrate on its core business. Additional benefits for BAIC include the expanded product offerings, reinsurance support and expertise of PSMHC. The ratings of the Magna Carta Companies are unaffected by this transaction.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

A.M. Best Co.
Analysts:
John E. Serino, CPCU, ARM, 908-439-2200, ext. 5712
john.serino@ambest.com
or
Gerard Altonji, 908-439-2200. ext. 5626
gerard.altonji@ambest.com
or
Public Relations:
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com