S&P Takes off Watch, Affirms, Withdraws Trenwick Ratings

Standard & Poor’s has removed from CreditWatch and affirmed its ‘CCC’ counterparty credit and financial strength ratings on Trenwick Group Ltd.’s operating subsidiaries: Trenwick America Reinsurance Corp., Dakota Specialty Insurance Co., Insurance Corp. of NY, LaSalle Re Ltd., and Trenwick International Ltd.

Standard & Poor’s also said that it assigned a negative outlook to the
companies. Subsequently, Standard & Poor’s withdrew these ratings at the request of management.

“The ratings had been placed on CreditWatch on March 4, 2003, because of the companies’ weakened condition and the possibility of regulatory action,” noted Standard & Poor’s credit analyst Karole Dill Barkley.

Following the cessation of the Chubb Corp. underwriting arrangement with Trenwick America Reinsurance Co., the operations at Lloyds are the only Trenwick operations that are not effectively in runoff. At year-end 2002, Trenwick’s auditors noted that because of the debt obligations and Trenwick’s potential inability to satisfy certain collateral obligations, there was substantial doubt about the company’s ability to continue as a going concern.

Filings with the SEC further disclose that Insurance Corp. of America and Trenwick America Reinsurance Co. are operating with considerable guidance and close oversight from their regulators under letters of understanding.