A.M. Best has commented that the Long-Term Issuer Credit Rating of “bbb-” of National General Holdings Corp. (National General) (New York, NY) [NASDAQ:NGHC] and all other Credit Ratings (ratings) assigned to National General subsidiaries and securities issued by National General are unchanged following the announcement that the release of the company’s annual report (10-K) for the fiscal year ended Dec. 31, 2016, will be further delayed while its auditor completes its final review procedures and delivers its audit opinion.
National General previously announced a delay of up to 15 days in the Securities and Exchange Commission filing of its 10-K on Feb. 27, 2017, in conjunction with its fourth-quarter 2016 earnings release. As it did at that time, management has reasserted that it does not anticipate that its financial results will change from that announcement when the 10-K is published, nor does it expect to disclose any material weaknesses with regard to 2016 at that time.
Since the Feb. 27 announcement, management has determined that a material weakness existed at Dec. 31, 2015, with respect to internal control over certain financial reporting. Following review of its 2015 consolidated financial statements, management has concluded that no changes to those financial statements are required as a result of the material weakness. The material weakness has been subsequently remediated; however, the company will be filing an amended 2015 10-K to reflect this finding.
Given management’s statements regarding the drivers of the delay and the expectation that there will be no changes in the financial results that are reported for 2016, A.M. Best will continue to monitor the situation. Should the results ultimately reported in the 10-K differ materially from those released on Feb. 27, 2017, action on the ratings and/or outlooks may be taken. A.M. Best’s future review and assessment of National General’s enterprise risk management framework and process will consider the factors that contributed to the delay and may also have an effect on the ratings or outlooks.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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Jennifer Marshall, CPCU, ARM, +1 908-439-2200, ext. 5327
Christopher Sharkey, +1 908-439-2200, ext. 5159
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Michael J. Lagomarsino, CFA, FRM, +1 908-439-2200, ext. 5810
Jim Peavy, +1 908-439-2200, ext. 5644
Director, Public Relations