A.M. Best Co. announced this morning that it downgraded the financial strength rating of Nationwide Insurance Company of Florida to "B-minus" (fair) from "B" (fair).

The outlook for the rating is negative, the Oldwick, N.J.-based rating agency said, citing potential consequences of a 100-year hurricane to support the downgrade action.

Despite a sizable internal reinsurance agreement with its parent, Nationwide Mutual Insurance Company of Columbus, Ohio, and coverage purchased from the Florida Hurricane Catastrophe Fund, the Florida company would suffer a substantial decline in capitalization in the event of a 100-year hurricane, Best said in a statement.

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