A.M. Best Co. has placed the financial strength rating of GMAC Insurance Group under review with negative implications.
Best said the new status reflects the financial pressures that exist at the group's ultimate parent, General Motors Corporation.
The ratings will remain under review pending further discussions with management on strategic initiatives that would lessen any potential impact due to additional deterioration at GM.
The ratings action followed the announcement by General Motors of a $1.6 billion third-quarter loss compared to a profit of $315 million a year ago.
But the news that the company had signed an initial agreement with unions to reduce health care expenses by $3 billion sent the share prices up 11 percent.
In related news, Fitch Ratings placed the GMAC ratings on Rate Watch Evolving following the announcement that the parent company is considering a range of options, including selling a controlling stake in GMAC.
The "evolving" status could portend any change such as an eventual raising or lowering of ratings.
From a ratings perspective, a majority sale of GMAC would allow Fitch to separate the ratings of GMAC from GM, said a Fitch spokesman.
The agency expects further changes in the relationship between GM and GMAC such as limitations on intercompany payables.
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