Monday, May 18, 2009


* A.M. Best Co. has downgraded the financial strength rating to B++ (Good) from A- (Excellent) and issuer credit ratings to “bbb+” from “a-” of Georgia Farm Bureau Group (Macon, Ga.) and its members, Georgia Farm Bureau Mutual Insurance Company and Georgia Farm Bureau Casualty Insurance Company. The outlook for all ratings has been revised to stable from negative.

The rating downgrades reflect Georgia Farm Bureau Group’s continuing unfavorable underwriting performance, which has negatively impacted the group’s capitalization. The group posted a nearly $80 million underwriting loss in 2008, which was the primary driver behind a drop in surplus of approximately $70 million or 19%. Though the group had bolstered its capital position at year-end 2007 through the issuance of $45 million in surplus notes, this capital cushion has been depleted due to the poor operating results of 2008 and first quarter 2009.

The personal auto liability and homeowners’ segment, which is part of the group’s core book of business, continues to significantly underperform relative to its industry peers.

  • Two Whitesburg, Kentucky area agents were sentenced on felony charges after pleading guilty to helping a client defraud a workers’ comp insurance carrier.

Thomas J. Childers, 60, of Hazard, and Karen Lynetta Fox-Burns, 56, of Whitesburg, originally were indicted in May 2008 on charges of mail fraud. Childers is the owner of CS&W Insurance Services Inc. in Whitesburg and Fox-Burns is a licensed agent. Childers, Fox-Burns and a CS&W customer services representative, Shannon Ranee Hogg, a resident of Whitesburg and the daughter of Fox-Burns, each pleaded guilty to a count of misprision of a felony (includes the act of concealing a felony) in United States District Court in Lexington. According to court documents, Childers, Fox-Burns and Hogg helped CS&W clients John and Tena Pennington defraud workers’ comp insurance carrier Kentucky Employers’ Mutual Insurance. The group misrepresented the number of employees and the amount of payroll in John Pennington’s company, ZAG Resources Inc., and its connection to another Pennington company, JZ Trucking Inc. This resulted in lower workers’ comp premiums for Pennington’s company.

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