A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit rating (ICR) of “a-” of Majestic Insurance Company (Majestic) (San Francisco, CA). Additionally, A.M. Best has affirmed the FSR of B++ (Good) and ICR of “bbb” of Twin Bridges (Bermuda) Ltd. (Twin Bridges) (Hamilton, Bermuda). Both companies are subsidiaries of CRM Holdings, Ltd. (CRM Holdings) (Hamilton, Bermuda) (NASDAQ: CRMH).

A.M. Best also has affirmed the ICRs of “bbb-” of CRM Holdings, Embarcadero Insurance Holdings, Inc. (Embarcadero) (San Francisco, CA) and CRM USA Holdings, Inc. (CRM USA) (Wilmington, DE). Concurrently, A.M. Best has affirmed the debt ratings of “bb” on the trust preferred securities of CRM USA and the surplus notes of Embarcadero. The outlook for all ratings is negative. (See below for a detailed listing of the debt ratings.)

The ratings of Majestic reflect its solid capitalization, profitable operating results, stabilization of its loss reserves and its expertise within its specialty workers’ compensation markets.

Offsetting these strengths is the adverse loss reserve development reported in Majestic’s earlier years, a recent shift in the company’s book of business to smaller risks and new geographic areas, the reduced financial flexibility of CRM Holdings, as well as some concern over Majestic’s ability to meet performance projections while maintaining prudent capitalization levels.

The ratings of Twin Bridges recognize its solid capitalization, favorable underwriting and operating performance to date and management’s experience in the excess workers’ compensation reinsurance market for self-insured groups.

Offsetting these strengths is the significant decline in Twin Bridges’ overall capitalization following management’s decision to reallocate capital within the overall CRM group, the relative immaturity of the company’s loss reserves and the concentration in a single line business.

The following debt ratings have been affirmed:

CRM USA Holdings, Inc.—

-- “bb” on $35 million 8.65% junior subordinated debt securities, due 2036

Embarcadero Insurance Holdings, Inc.—

-- “bb” on $8 million LIBOR+ 4.2% surplus notes, due 2033

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.