Two major bond rating companies have placed state-run residual insurer Louisiana Citizens Property Insurance Corp. on watch or under review.
Moody's Investors Service said today it placed the "Baa2″ underlying rating of the insurer on review for possible downgrade.
Yesterday, Fitch Rating in Chicago placed the "triple-B" issuer default rating and "triple-B" underlying rating on its bonds on rating watch negative.
The action comes after Citizens revealed Wednesday that its computer system could not generate an audit report for 2005. Officials assured the rating agencies that the data is available and nothing has been lost. A consulting firm was brought in to fix the problem and officials expect to produce audits for 2005 and 2006 within the next 60 days.
The rating companies also said they are troubled by the departure of Citizens Chief Executive Officer Terry Lisotta following disclosure of the system problem. Mr. Lisotta is remaining in his post until a replacement is found.
On Wednesday, Standard & Poor's Citizen's bonds on CreditWatch with negative implications.
(This story was updated March 12 at 9:25 p.m.)
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