AM Best has maintained the under review with negative implications status for the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of NASW Insurance Co. (NASWIC) headquartered in Washington, D.C.
AM Best said the credit ratings reflect NASWIC’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The status is under review with negative implications, according to AM Best, based on the “uncertainty regarding NASWIC’s prospective business plans to operate on a stand-alone basis” due to its separation from Preferra Insurance Company Risk Retention Group in 2024.
Prior to 2024, NASWIC provided reinsurance for Preferra RRG. Also, NASWIC’s parent, NASW Assurance Services Inc. (ASI), a subsidiary of the National Association of Social Workers (NASW), provided administrative and marketing services to Preferra.
However, the two entities became involved in litigation. In August the parties announced they had settled their lawsuits and agreed to go their separate ways. No terms were disclosed.
The extension of the under review with negative implications status reflects the additional time needed for NASWIC’s management to form a new risk retention group, AM Best said, noting that the RRG effort has faced delays due to the litigation and settlement processes.
AM Best said NASWIC’s management is engaged with the District of Columbia regulators on the RRG application. In addition, NASWIC’s marketing campaign to increase production through its affinity partnership with Hartford is currently underway.
Preferra continues to operate as an insurance company serving social workers with new reinsurance agreements.
AM Best said its ratings for NASWIC will remain under review with negative implications until it evaluates the ratings of the company on a stand-alone basis.
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