A.M. Best Comments on Max Re Ltd.'s Ratings After CEO's Resignation

  
    
  
  
    
      A.M. Best Co. has commented that the financial strength ratings 
      of A- (Excellent) and the issuer credit ratings of “a-” 
      of Max Re Ltd. (Max Re) [NASDAQ: MXRE] 
      (Hamilton, Bermuda) and its rated subsidiaries remain unchanged 
      following yesterday’s announcement that Max Re’s 
      CEO Robert J. Cooney has resigned and for a second time this year the 
      company will be restating its earnings for fiscal years 2001 through 
      2005 and the prior two quarters of 2006.
    
    
      These actions are due to further developments related to Max Re’s 
      previous internal investigation concerning the improper accounting 
      treatment relating to two finite retrocessional contracts. In May 2006, 
      the company concluded that there was sufficient risk transfer in each of 
      the contracts in question. However, based on new information recently 
      afforded to Max Re, it appears the previous conclusion may have been 
      incorrect.
    
    
      A.M. Best understands that Max Re intends to take a conservative 
      position on this matter by writing down any derived earnings benefit 
      from these contracts for which the cumulative effect to shareholders’ 
      equity is expected not to exceed $10 million. While the resignation of 
      Mr. Cooney is a more significant issue than the economic ramifications 
      of the earnings restatement, his resignation is interpreted to be a 
      proactive measure to mitigate any potential future regulatory sanctions.
    
    
      The current Max Re ratings are unchanged at this time as A.M. Best views 
      these actions to be prudent and the current management team has 
      sufficient depth to direct and maintain the current business strategy. 
      However, should there be any further regulatory and/or economic 
      ramifications to arise from this matter, A.M. Best will reevaluate the 
      status of its current assigned ratings to Max Re.
    
    
      A.M. Best Co., established in 1899, is the world’s 
      oldest and most authoritative insurance rating and information source. 
      For more information, visit A.M. Best’s Web 
      site at www.ambest.com.
    
  
A.M. Best Co. has commented that the financial strength ratings of
A- (Excellent) and the issuer credit ratings of "a-" of Max Re Ltd.
(Max Re) (NASDAQ: MXRE) (Hamilton, Bermuda) and its rated subsidiaries
remain unchanged following yesterday's announcement that Max Re's CEO
Robert J. Cooney has resigned and for a second time this year the
company will be restating its earnings for fiscal years 2001 through
2005 and the prior two quarters of 2006.

   These actions are due to further developments related to Max Re's
previous internal investigation concerning the improper accounting
treatment relating to two finite retrocessional contracts. In May
2006, the company concluded that there was sufficient risk transfer in
each of the contracts in question. However, based on new information
recently afforded to Max Re, it appears the previous conclusion may
have been incorrect.

   A.M. Best understands that Max Re intends to take a conservative
position on this matter by writing down any derived earnings benefit
from these contracts for which the cumulative effect to shareholders'
equity is expected not to exceed $10 million. While the resignation of
Mr. Cooney is a more significant issue than the economic ramifications
of the earnings restatement, his resignation is interpreted to be a
proactive measure to mitigate any potential future regulatory
sanctions.

   The current Max Re ratings are unchanged at this time as A.M. Best
views these actions to be prudent and the current management team has
sufficient depth to direct and maintain the current business strategy.
However, should there be any further regulatory and/or economic
ramifications to arise from this matter, A.M. Best will reevaluate the
status of its current assigned ratings to Max Re.

   A.M. Best Co., established in 1899, is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit A.M. Best's Web site at www.ambest.com.