National Merit Insurance Assigned BBBpi Rating by S&P

Business Wire, Oct 13, 1998

NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 10/13/98--Standard & Poor's today assigned its triple-'Bpi' insurer financial strength rating to National Merit Insurance Co.

National Merit Insurance is licensed in Washington and Oregon. Its major line of business is private passenger auto liability, and it is a member of Credit Suisse Group , one of the worlds largest financial services enterprises. The company commenced operations in 1980 and the principle state in which it operates is Washington.

Below is a summary of the analysis that resulted in a triple-'Bpi' rating. --

Under Standard & Poor's capital adequacy model, capitalization is

extremely strong with a ratio of 488.6% at year-end 1997. -- Operating performance was good, with return on revenue average

from 1992-1997 at 13.5%. -- The company's business is somewhat more narrow in scope than that

of insurers rated single-'A' and higher. -- Although the company is a member of Credit Suisse Group, Standard

& Poor's believes that this relationship is not a significant

rating factor.

'Pi' ratings, denoted with a pi subscript, are insurer financial strength ratings based on an analysis of an insurer's published financial information and additional information in the public domain. They do not reflect in-depth meetings with an insurer's management and are therefore based on less comprehensive information than ratings without a pi subscript. Pi ratings are reviewed annually based on a new year's financial statements, but may be reviewed on an interim basis if a major event that may affect the insurer's financial security occurs. Ratings with a pi subscript are not subject to potential CreditWatch listings.

Ratings with a pi subscript generally are not modified with 'plus' or 'minus' designations. However, such designations may be assigned when the insurer's financial strength rating is constrained by sovereign risk or the credit quality of a parent company or affiliated group, Standard & Poor's said.---CreditWire