A.M. Best maintains negative stand for Optimum General companies

Rating agency A.M. Best has affirmed a B (fair) rating for Optimum General Inc. and its subsidiary operations. The rating agency points out that this is a negative outlook based on the insurer’s weakened capital reserve stemming from losses incurred in 2001 in primarily Ontario, the Atlantic provinces and Texas.Optimum’s management has initiated a profit recovery plan, consisting mostly of rate increases and more stringent underwriting and claims handling guidelines, A.M. Best acknowledges. The group has also stopped writing new business in Atlantic Canada and will not renew existing covers as from July 1 of this year.Despite these corrective actions, the rating agency remains concerned with how effective and timely these corrective measures will be in strengthening the group’s capital position. “Despite the actions taken by management, continued uncertainties related to future profitability and capital position remain. Further, these plans will require time and should the company not execute a plan or combination of plans to adequately bolster its capital position in the near term, A.M. Best will take further rating action.”