AM Best Removes From Under Review With Negative Implications and Affirms Credit Ratings of Select PhenixFIN Corporation’s Insurance Subsidiaries; Maintains Under Review with Negative Implications Status for National Security Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has removed from under review with negative implications and affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bb” (Fair) of National Security Fire and Casualty Company (NSFC). AM Best also has removed from under review with negative implications and affirmed the FSR of B- (Fair) and the Long-Term ICR of “bb-” (Fair) of Omega One Insurance Company, Inc. (Omega). The outlook assigned to these Credit Ratings (ratings) is stable. In addition, AM Best has maintained the under review with negative implications status for the FSR of B (Fair) and the Long-Term ICR of “bb” (Fair) of National Security Insurance Company (NSIC). All companies are domiciled in Elba, AL and are subsidiaries of PhenixFIN Corporation (PhenixFin), which operates as a business development corporation.

The ratings of NSFC reflect its balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM). The ratings of Omega reflect its balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, very limited business profile and appropriate ERM. The stable outlook assigned to these property/casualty entities reflects additional risk reduction efforts by NSFC to reduce exposure to catastrophe events by further reducing its coastal footprint, as well as additional capital at the holding company following the acquisition by PhenixFin and investment by Tower I, LP.

The ratings of NSIC reflect its balance sheet strength, which AM Best assesses as weak, as well as its adequate operating performance, limited business profile and appropriate ERM. The under review with negative implications status reflects the continued pressure on the company’s balance sheet due to the change in loss reserve methodology and statutory strain from the annuity business despite a capital injection from the recently closed acquisition by PhenixFin. The under review with negative implications status also reflects the need to execute successfully on additional recapitalization plans, and improving operating performance over time on the existing book of business.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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