S & P lowers State Farm Lloyds

Standard & Poor’s lowered its counterparty credit and financial capacity of the firm of State for the rating of Lloyds (SF Lloyds), written assurance homeowners in Texas, “A” from “AAA”. At the same time, S & P revised the status of these Credit Ratings Watch Negative on development.

The rating action stems from the great loss that are SF Lloyds, mainly because of claims for damage to homes mold, provides in Texas, the elimination of damage before additional aid over the ’surplus, they had at the beginning of the year 2001, and the scope of the remedial measures it has taken, the State Farm Mutual Automobile Insurance Co. (SFMA, notes “AAA”), the flagship of the State Farm group and the world’s largest personal lines insurers.

Because of the extensive damage SF and Lloyds charge any future mold claims by S & P believes that the will of the SFMA to continue its support for the unity of notation on its own practice depends’ a satisfactory resolution of regulatory conditions, holders can offer mold coverage in Texas.

SF Lloyds underwriting new contracts on September 18, 2001. He also won all humanitarian organizations. Discussions with the Texas Department of Insurance regarding the regulation of insurance policies provide coverage for mold. SF Lloyds is closely together additional verification requirements and reinsurance arrangements.

S & P’s view that perpetrators of insurance homeowners in Texas and maybe also other countries - we need to ensure they can offer, without their policy exposure to losses resulting from claims Mold approaching the seriousness of SF Lloyds experienced. Such insurance could be done by a combination of interest rate relief, in writing, by covering note of mold in an additional premium, mold limiting the scope of observation or termination of a reasonable standard of determining claim validity.

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