Kemper Ratings Downgraded, Withdrawn By S&P
NU Online News Service, July 3, 4:00 p.m. EDT?Standard & Poor's Ratings Services downgraded its counterparty credit and financial strength ratings on Kemper Insurance Companies' intercompany pool members to "triple-C" from "B-minus" with a "negative" outlook, the rating agency announced yesterday.
After the downgrade, the new ratings were withdrawn at the request of Long Grove, Ill.-based Kemper, which no longer writes new business and continues to run off its existing books of business.
The New York-based S&P also lowered its rating on Kemper's Lumbermens Mutual Casualty Co.'s $400 million surplus notes due 2026 to "D" from "C," following the company's expected non-payment of interest.
This past Monday, Kemper also announced a significant drop in its surplus, from $697 million at the year-end 2002 to $313 million at the end of last May. The decline was largely the result of asset-valuation adjustments made by KPMG LLP, Kemper's external auditor, to reflect the company's current runoff status and converting the balance sheet from a going concern to a runoff basis.
This latest ratings downgrade follows another ratings action from Moody's Investors Service last week, when the New York-based rating agency lowered its insurance financial strength ratings for Kemper's intercompany pool members to "Caa3" from "B3." Moody's had also downgraded its ratings on surplus notes issued by Kemper's Lumbermens Mutual Casualty Co. to "C" from "Ca."
Moody's Kemper ratings were also withdrawn following the rating agency's downgrade action.
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