AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-”(Excellent) of National Guaranty Insurance Company of Vermont (NGIC) (Burlington, VT). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect NGIC’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

The ratings also reflect NGIC’s strategic role as the captive insurance company of Waste Management, Inc. (WM) [NYSE: WM], one of the leading providers of comprehensive waste management environmental services in North America. As a strategic and integral part of WM’s enterprise risk management program, the parent wholly funded the captive’s capitalization in the form of a demand note that generates net investment income to augment surplus annually. Further supplements have been provided in form of letters of credit as changes in exposures warrant. NGIC benefits from WM’s robust risk management strategies, which enable it to efficiently and appropriately support a portion of WM’s financial assurance program. The company has had no losses in the program but has an expense ratio that compares unfavorably with the surplus lines composite due to the nature of the financial assurance line of business and expenses focused on risk mitigation. Nonetheless, the company has been able to reduce underwriting expenses significantly over the past five years to further benefit operating and net income.

The stable outlooks reflect AM Best’s expectations that the company will maintain its very strong balance sheet strength and strong operating performance through active risk identification and assessment strategies.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

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.

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