NU Online News Service, Dec, 29, 11:39 a.m. EST
A.M. Best Co. has placed Clarendon Insurance Group and its member companies under review with negative implications.
The Oldwick, N.J.-based insurance rating service has placed the "A-minus (Excellent)" financial strength rating under review after the insurer announced that its parent company, Hannover Re, planned to sell the operating companies of Clarendon to Enstar Group Ltd.
Best said the move reflects the uncertainties associated with the sale and changes that may be brought on by a change in ownership.
Clarendon consists of:
o Clarendon National Insurance Co.
o Clarendon America Insurance Co.
o Clarendon Select Insurance Co.
o Harbor Specialty Insurance Co.
The company is currently in run-off.
Hamilton, Bermuda-based Enstar said in a statement that it entered into an agreement to purchase Clarendon for approximately $200 million. The deal would be financed with a combination of a bank loan and cash on hand.
In a filing with the Securities and Exchange Commission, Enstar said the final price is subject to adjustment "based upon the consolidated surplus of the acquired company as of Dec. 31, 2010.
Enstar acquires and manages insurance and reinsurance companies in run-off, and also provides management and consulting services to the insurance industry.
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