A.M. Best has affirmed the financial strength rating of “A- (Excellent)” and issuer credit rating of “a-” of National Guaranty Insurance Company (NGIC) of Vermont. The outlook for both ratings is stable.
NGIC is a pure captive that was established to meet the financial assurance obligations of its parent, Waste Management.
The ratings of NGIC reflect its excellent risk-adjusted capitalisation, operating performance and liquidity positions, as well as its sophisticated risk management strategy and practices.
A.M. Best said: “Partially offsetting these positive rating factors is the fact that a large percentage of NGIC’s surplus is loaned back to Waste Management, which is supported by a 24-hour demand note.”
“However, capital levels as NGIC are monitored by Vermont, and the company must maintain a certain aggregate exposure to capital ratio as prescribed by the Vermont Department of Financial Regulation.”
NGIC was incorporated on 29 April 1989. It is licensed in Florida and operates as a surplus lines carrier in several other states. In total, NGIC currently provides financial assurance coverage in 18 states and issuing surety bonds in 25.
A.M. Best expects NGIC’s future operating performance to be stable but strong. The stable earnings profile should further support its growth and business writings that are consistent with its capital and surplus position.
NGIC’s ratings are not expected to be upgraded within the next 12-24 months as its operating performance and capital position have already been considered in the rating process.
Factors that could result in a downgrade include: if NGIC’s best capital adequacy ratio score declines; its operating performance and risk profile deteriorates; insured losses deplete capital or significant changes and turnover occur in the company’s management team; and finally if Waste Management’s financial condition deteriorates.
