Ratings agency Standard & Poor's (S&P) said today that its ratings on UK-based CNA Insurance Europe (CIE) and Maritime Insurance would be lowered if they did not receive approval from the guarantor's regulator for additional parental support in the form of a guarantee.
CIE and Maritime both carry counterparty credit and insurer financial strength ratings of A-minus. Both companies' ratings are on CreditWatch with negative implications.
S&P said the support already had the approval of CNA group management and was currently awaiting approval from the guarantor's regulator.
It said that in line with the regulator's normal practice, approval was not expected until late February at the earliest.
It added that approval from the regulator would see both ratings maintained but they would remain on CreditWatch with negative implications.
The ratings on CIE and Maritime were equalized on 6 December 2000, following an announcement that the companies would merge.
S&P said they were derived from the 'core' treatment given to the two companies.
"This is based on their strategic importance to the CNA group and explicit support from the CNA group in the form of a net worth maintenance agreement," S&P said.
S&P added that in its opinion, CIE and Maritime no longer qualified as strategically important to the CNA group.
"Therefore, in the absence of an unconditional guarantee, the ratings would be lowered because of a weakening in the stand-alone financial strength characteristics of the companies," it said.
