A.M. Best Comments on Ratings of Contractors Bonding and Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has commented that the ratings of Contractors Bonding and Insurance Company (CBIC) (Seattle, WA) remain unchanged following the recent announcement that RLI Corp. (RLI) (Peoria, IL) will acquire CBIC through an acquisition of CBIC’s holding company, Data and Staff Service Co.(DSS).

CBIC and RLI have entered into a stock purchase agreement and are entering the regulatory approval process, with the transaction expected to close during the first quarter of 2011. Upon the close of the transaction with CBIC, RLI will acquire a specialty writer of surety bonds and related niche property/casualty insurance products. CBIC’s profitable underwriting and operating results are supported by its network of 13 regional branch offices, experienced management team and established agency relationships, which have resulted in strong earnings and organic surplus growth. Under the terms of the transaction, RLI will acquire 100% of the stock of DSS for approximately $137 million in cash, payable at closing.

On June 15, 2010, A.M. Best affirmed the FSR of A (Excellent) and ICR of “a+” of CBIC, with a stable outlook.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; and “Assessing Country Risk.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2010 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.Gordon McLean, Senior Financial Analyst, 908-439-2200, ext. 5304
gordon.mclean@ambest.com
orRachelle Morrow, Senior Manager, Public Relations, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
orGerard Altonji, Assistant Vice President, 908-439-2200, ext. 5626
gerard.altonji@ambest.com
orJim Peavy, Assistant Vice President, Public Relations, 908-439-2200, ext. 5644
james.peavy@ambest.com

Source: A.M. Best Co.