MEXICO CITY--(BUSINESS WIRE)--A.M. Best has commented that the financial strength rating, issuer credit rating and stable outlooks of Istmo Compañía de Reaseguros, Inc. (Istmo Re) (Panama City, Panama) remain unchanged following government intervention at Balboa Bank & Trust (BBT).
This comment follows the seizure of control over BBT’s assets by Panama’s banking regulator, the Superintendencia de Bancos de Panama, on May 5, 2016, after the U.S. Department of the Treasury announced sanctions on certain BBT shareholders. The ratings and outlooks remain unchanged because Istmo Re’s exposure is limited to an approximate 12.43% ownership in BBT, a less than 0.5% ownership among BBT’s sanctioned shareholders in Istmo Re, and minor deposit accounts with BBT that do not compromise the capital, financial or liquidity positions of the company. Istmo Re is maintaining close communication with the insurance regulator and is actively trying to resolve the purchase of the sanctioned parties’ interests in the company. Given the information currently available, A.M. Best does not foresee short-term pressure on Istmo Re’s operating performance and business profile as a result of this event. Neither Istmo Re nor its subsidiaries are currently subject to regulatory actions. A.M. Best will continue to closely monitor the developments and implications of this event, as well as the magnitude of its impact on the ratings of Istmo Re, but in the near-term, no rating actions are considered necessary.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Catastrophe Analysis in A.M. Best Ratings
- Evaluating Country Risk
- Rating Members of Insurance Groups
- Risk Management and the Rating Process for Insurance Companies
- Understanding Universal BCAR
View a general description of the policies and procedures used to determine credit ratings. Also in accordance with Mexican regulations, the following is a link to required disclosures – A.M. Best America Latina Supplementary Disclosure.
- Previous Rating Date: June 12, 2015
- Date of Financial Data Used: December 31, 2015
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