A.M. Best Affirms Rating of BancInsure, Inc.

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of BancInsure, Inc. (BancInsure) (Oklahoma City, OK). The outlook for both ratings is stable.

The ratings reflect BancInsure favorable operating performance, capitalization that supports its rating level and its strong niche market focus.

Partially offsetting these positive factors is the company’s fluctuating return measures over a five-year period and the risks associated with the debt issued at the parent company. Further, A.M. Best continues to monitor the run-off of its medical malpractice book of business, which has indicated a favorable status to date.

The ratings recognize BancInsure’s excellent business position with its continued close ties to community banks that include exclusive endorsement agreements with 18 separate bankers associations. Management believes that its new ownership structure has increased the effectiveness of its marketing entities, while the reduction in its board level from 31 to 14 directors has streamlined its decision-making process.

Financing through trust preferred securities at its holding company followed a management buy-out in January 2003. Although this debt is currently being serviced by a newly formed marketing entity for BancInsure’s products, there remains the risk that the company could be used to partially service this debt should its marketing entity’s cash flows deteriorate. Revenue stream of the marketing entity is derived from fee and commission. Nonetheless, under its revised operating structure, the company has profitably grown its book of business, serviced its debt and generated favorable return measures.

For current Best’s Ratings and independent data on the captive and alternative insurance market, please visit www.ambest.com/captive.

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.