A.M. Best Places Ratings of Majestic Insurance Company and Twin Bridges Ltd. Under Review with Negative Implications

Business Wire, April 29, 2008

OLDWICK, N.J. -- A.M. Best Co. has placed the financial strength ratings (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of Majestic Insurance Company (Majestic) (San Francisco, CA) and Twin Bridges (Bermuda) Ltd. (Twin Bridges) (Hamilton, Bermuda) under review with negative implications. Concurrently, A.M. Best has placed the ICRs of "bbb-" of CRM Holdings Ltd. (CRMH) (Hamilton, Bermuda) (NASDAQ: CRMH), Embarcadero Insurance Holdings, Inc. (San Francisco, CA) and CRM USA Holdings, Inc. (Delaware) under review with negative implications. Additionally, A.M. Best has placed the debt rating of "bb" of the trust preferred securities of CRM USA Holdings Inc. and the "bb" of the surplus notes of Embarcadero Insurance Holdings, Inc. under review with negative implications.

These rating actions reflect A.M. Best's concern over the potential impact on Majestic and Twin Bridges from the issues faced by their affiliate, Compensation Risk Managers LLC (CRM LLC) and their ultimate parent, CRM Holdings Ltd. These issues stem from administrative charges brought by the New York Workers' Compensation Board, which could result in the possible revocation of the third party administrator license of CRM LLC in New York and potential fines and/or penalties against CRMLLC associated with the allegations. Additionally, the under review status reflects the impact on the financial flexibility of CRM Holdings Ltd. due to the decline in the market value of its common stock following the announced charges, as well as the limited capital available through its insurance subsidiaries to support their anticipated growth. Furthermore, 2007 capitalization levels at Majestic fell somewhat short of the requirement by A.M. Best for the ratings based on higher premium growth, partially attributable to previously self-insured business being written on a first dollar basis.

The ratings will remain under review until the impact of the charges against CRM LLC is evaluated and management can provide A.M. Best with updated information about the capitalization of CRMH and its subsidiaries.

The following debt ratings have been placed under review with negative implications:

Embarcadero Insurance Holdings, Inc.--
-- "bb" on $8 million LIBOR  4.2% surplus notes, due 2033

CRM USA Holdings, Inc.--
-- "bb" on $35 million 8.65% junior subordinated debt securities, due 2036

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.>

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.