It's debatable if the fiduciary standard is 'higher' than suitability. But the better question might be, who's holding the bar?
A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit rating (ICR) of "a" of Western National Mutual Insurance Company (Edina, MN) and its wholly owned subsidiaries: Western National Assurance Company, Western Home Insurance Company, Pioneer Specialty Insurance Company, Umialik Insurance Company and Arizona Automobile Insurance Company.
Collectively, these companies operate under a pooling agreement and are referred to as Western National Insurance Group (Western National). The outlook for all ratings is stable.
Concurrently, A.M. Best has upgraded the FSR to A (Excellent) from A- (Excellent) and ICR to "a" from "a-" of American Freedom Insurance Company (American Freedom) (Arlington Heights, IL). The outlook for both ratings is stable.
At the same time, A.M. Best has withdrawn the FSR of A and the ICR of "a" for Titan Property and Casualty Insurance Company (Titan) (Orland Park, IL) due to the legal merger into Western National Mutual Insurance Company. The merger took effect October 1, at which time all assets and liabilities were merged into Western National Mutual.
The ratings for the members of Western National Insurance Group reflect their solid risk-adjusted capitalization, strong operating performance and superior business profile, partially offset by exposure to frequent and severe weather events in recent years. Regarding future rating movement, a re-established profitable trend in underwriting performance and positive development in reserving issues would lead to consideration of a positive outlook or rating change.
The ratings for American Freedom reflect its solid risk-adjusted capitalization, conservative underwriting leverage and favorable loss reserve development. The ratings also contemplate the company's continued operating profitability, which has benefited from favorable loss experience. The profitable performance is reflective of management's prudent underwriting, despite the highly competitive nonstandard automobile market. The ratings also reflect the implicit and explicit support provided by Western National since its purchase of American Freedom in April 2012.
These strengths are partially offset by American Freedom's limited business profile. Due to its singular product offering and relatively tight geographic concentration, the company remains susceptible to adverse changes in the judicial and legislative environment, as well as increased competition, which had impacted premium growth in recent years. A.M. Best believes the ratings for American Freedom are well positioned at this time. Any consideration of rating movement would hinge on performance by American Freedom's parent company.
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