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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

AM Best Withdraws Credit Ratings of First Acceptance Corporation and Its Subsidiaries

AM Best has affirmed the Financial Strength Rating (FSR) of C++ (Marginal) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “b+” (Marginal) of the subsidiaries of First Acceptance Corporation (Delaware) [OTCQX: FACO], collectively referred to as First Acceptance Insurance Group (First Acceptance). (See below for a detailed list of the companies and ratings.) Concurrently, AM Best has affirmed the Long-Term ICR of “ccc-” (Weak) of First Acceptance Corporation. The outlook of these Credit Ratings (ratings) is stable. At the same time, AM Best has withdrawn these ratings as the company has requested to no longer participate in AM Best’s interactive rating process.

The ratings reflect First Acceptance’s balance sheet strength, which AM Best assesses as weak, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM).

The weak balance sheet assessment reflects the significant volatility in policyholder surplus, elevated underwriting leverage measures and adverse reserve development during the latest five-year period. In recent years, additions to policyholder surplus have been reported due to net income from operations and capital contributions from its parent. Overall risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR) remains strong. Despite improvement in recent periods, the position remains highly sensitive to premium growth and reserve adequacy. First Acceptance’s marginal operating performance is driven by persistent underwriting losses and fluctuating operating results. However, underwriting losses are partially offset by fee and other income. The group’s limited business profile reflects operations that are focused solely on non-standard automobile business. ERM is viewed as marginal as the framework continues to evolve. While steps have been taken to integrate a more formalized structure, risk management capabilities are not fully aligned with the organization’s profile.

The FSR of C++ (Marginal) and the Long-Term ICRs of “b+” (Marginal) have been affirmed, with stable outlooks. Concurrently, AM Best has withdrawn the ratings at the company’s request for the following pooled subsidiaries of First Acceptance Corporation:

  • First Acceptance Insurance Company, Inc.
  • First Acceptance Insurance Company of Georgia, Inc.
  • First Acceptance Insurance Company of Tennessee, Inc.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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