[January 31, 2013]

A.M. Best Affirms Ratings of BrickStreet Mutual Insurance Company and Assigns Ratings to NorthStone Insurance Company

A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit rating (ICR) of "a-" of BrickStreet Mutual Insurance Company (BSMIC). A.M. Best also has assigned an FSR of A- (Excellent) and an ICR of "a-" to BSMIC's subsidiary, NorthStone Insurance Company (NorthStone). BSMIC and NorthStone are collectively referred to as BrickStreet Mutual Insurance Group (BrickStreet). The outlook for all ratings is stable, and both companies are headquartered in Charleston, WV.

The rating actions reflect BrickStreet's strong risk-adjusted capitalization, profitable underwriting and operating performance and dominant position in the West Virginia workers' compensation market. The ratings also recognize the group's prudent loss reserving standards that have allowed for favorable loss reserve development of prior accident years and the competitive rate flexibility afforded by multiple tiering in a number of states.

The ratings of NorhStone recognize the intercompany pooling agreement and the financial support and flexibility of BSMIC. NorthStone was formed to facilitate a more flexible tiered pricing structure in the states where BSMIC does not have multiple tiers.

Positive rating actions may occur if BrickStreet sustains its strong underwriting and operating performance over the medium term. However, negative rating actions could result if the operating performance and/or risk-adjusted capitalization of the group falls markedly short of A.M. Best's expectations.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Catastrophe Analysis in A.M. Best's Ratings"; "Rating Members of Insurance Group"; "The Treatment of Terrorism Risk in the Rating Evaluation"; "Understanding BCAR for Property/Casualty Insurers"; and "Rating New Company Formations." Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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