A.M. Best Places Ratings of Palisades Group Under Review with Negative Implications

  
    
  
  
    
      A.M. Best Co. has placed the financial strength rating (FSR) of 
      B++ (Good) and the issuer credit ratings (ICR) of “bbb” 
      of the Palisades Group (Palisades) (Berkeley Heights, NJ) and its 
      members under review with negative implications.
    
    
      Concurrently, A.M. Best has placed the FSR of B++ (Good) and ICRs of “bbb” 
      of the wholly owned and separately rated High Point Group (Red 
      Bank, NJ) and its members under review with negative implications.
    
    
      The Palisades Group is comprised of Palisades Safety and Insurance 
      Association and its wholly owned subsidiary, Palisades Insurance 
      Company, as well as the members of the High Point Group: High 
      Point Preferred Insurance Company, High Point Property and 
      Casualty Insurance Company, High Point Safety and Insurance 
      Company, Twin Lights Insurance Company and Teachers Auto 
      Insurance Company of New Jersey.
    
    
      These rating actions reflect the March 13, 2008 signing of a definitive 
      agreement for Palisades to purchase National Atlantic Holdings 
      Corporation, including its wholly owned subsidiary, Proformance 
      Insurance Company (Proformance) (both of Freehold, NJ) (NASDAQ: 
      NAHC).
    
    
      While the execution risk associated with this transaction is partially 
      mitigated as a result of Palisades’ historic 
      success in acquiring and integrating books of business, the negative 
      implications reflect the uncertainties regarding this particular 
      integration given Proformance’s volatile 
      performance. Furthermore, the acquisition is projected to result in a 
      modest deterioration in Palisades’ 
      risk-adjusted capitalization.
    
    
      The ratings will remain under review pending close of the transaction, 
      which is subject to shareholder and regulatory approval, as well as A.M. 
      Best’s meeting with management regarding 
      business plans including anticipated integration and capital management 
      strategies.
    
    
      For 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.