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Standard & Poor's Lowers Condor Insurance Co. Rating to 'CCCpi'

9 January 2001

Standard & Poor's Lowers Condor Insurance Co. Rating to 'CCCpi'

    NEW YORK, Jan. 9 Standard & Poor's today lowered its
financial strength rating on Condor Insurance Co. to triple-'Cpi' from
double-'Bpi'.
    This rating action is based on the company's severe surplus deterioration,
resulting in a risk-based capitalization level considered very weak. Further,
the company has limited financial flexibility, and any worsening in
underwriting performance could jeopardize the company's future viability.
    The company mainly markets package policies, which consist principally of
commercial auto insurance and, to a lesser extent, general liability for
insureds involved in general trucking. All underwriting premiums are derived
from California and Arizona. It commenced operations in 1989.
    The company is a member of Amwest Insurance Group Inc., a publicly traded
insurance holding company .

    Major Rating Factors:

    -- The company experienced serious surplus deterioration in the first
       half of 2000, to $2.78 million, from $4.31 million at year-end 1999.
    -- Cumulative underwriting losses in the past 30 months have accumulated
       to $13 million, offset slightly by net investment income, realized
       capital gains, and other income of $7.93 million.
    -- The company's liquidity is considered strained, as of the second
       quarter of 2000, and it will have difficulty paying any unforeseen
       losses or coping with any adverse development from existing policies
       claims.

    Amwest Insurance Group Inc., the holding company, will have difficulties
paying principal and interest on its debt, as Condor Insurance Co.
(NAIC:33669) and its affiliated companies become a less viable means to
harvest needed cash. On a consolidated basis, the group accounted for losses
in excess of $14 million in the first nine months of 2000, with total capital
amounting to $42.6 million as of Sept. 30, 2000.
    Ratings with a 'pi' subscript are insurer financial strength ratings based
on an analysis of an insurer's published financial information and additional
information in the public domain. They do not reflect in-depth meetings with
an insurer's management and are therefore based on less comprehensive
information than ratings without a 'pi' subscript. Ratings with a 'pi'
subscript are reviewed annually based on a new year's financial statements,
but may be reviewed on an interim basis if a major event that may affect the
insurer's financial security occurs. Ratings with a 'pi' subscript are not
subject to potential CreditWatch listings.
    Ratings with a 'pi' subscript generally are not modified with "plus" or
"minus" designations. However, such designations may be assigned when the
insurer's financial strength rating is constrained by sovereign risk or the
credit quality of a parent company or affiliated group, Standard & Poor's
said. -- CreditWire.