AM Best Removes From Under Review With Negative Implications and Affirms Credit Ratings of Evergreen National Indemnity Company

AM Best has removed from under review with negative implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Evergreen National Indemnity Company (ENIC) (Independence, OH). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect ENIC’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

On Aug. 31, 2023, ENIC’s ratings were placed under review with negative implications due to its affiliation with Stillwater Insurance Group (SIG) and WT Holdings, Inc., that are currently under review with negative implications pending the execution of initiatives to replenish capital at SIG. WT Holdings, Inc., serves as the parent for SIG and ENIC. The decision to place ENIC’s ratings under review was based on potential increased downward pressure on the company’s ratings due to potential drag in the event management’s capital management strategy did not come to fruition. Subsequently, management provided new information that outlines key factors that protect ENIC’s financial strength that could alleviate potential drag on the company. The main one being independent third-party shareholders of ENIC. In addition, ENIC is U.S. treasury-listed, a federal requirement to be registered with the U.S. government to provide surety bonds to its customers. Thus, the company’s underwriting limitation is based on 10% of policyholders’ surplus. Reducing surplus via extraordinary dividends or other capital reduction would be detrimental to surplus, and subsequently, to the underwriting limitation. Therefore, any significant reduction in the capital and surplus reducing ENIC’s Treasury listing will compromise the existing bonds or policies outstanding. Furthermore, ENIC is domiciled in Ohio and shareholder dividends are restricted by the Ohio Department of Insurance. As a result of these factors, the potential drag to Evergreen’s rating from any potential downgrade of the SIG or WT Holdings, Inc. ratings has been alleviated.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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