S&P Global Ratings on Dec. 16 placed its issuer credit and financial strength ratings for Istmo Cia. de Reaseguros Inc. on R, which stands for "under regulatory supervision."
The placement follows Panama's insurance regulator's announcement that it will intervene and assume control of the company for 180 days after the firm failed to execute a three-month plan to improve its financial position.
The rating agency also suspended the global scale issuer credit and financial strength ratings on the insurer's main operating subsidiaries Istmo México Compañía de Reaseguros and Ireland-based Liffey Reinsurance Co. Ltd., as the information available is not satisfactory to make a rating decision, assess their group status, or determine their creditworthiness on a stand-alone basis. S&P said it will reinstate the ratings on the subsidiaries if it receives sufficient and ongoing information for credit surveillance.
The regulator cited its analysis of the company's audited financial statements as of Dec. 31, 2015, and unaudited ones as of Sept. 30, 2016, as well as the company's available assets in relation to its liabilities and other measures of capital as reasons to intervene.
S&P noted that the regulators have the power to favor one class of obligations over others or pay some obligations and not others.
The rating agency may reinstate the insurer's global scale ratings when and if the regulatory intervention ends and the company's creditworthiness can be determined.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.