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A.M. Best Co. has downgraded the financial strength rating to “B-” (Fair) from “B+” (Very Good) of New Zealand-based Tasman Pacific Insurance Limited. The rating remains under review with negative implications.

“The rating action reflects the deterioration in the company’s operating performance as a result of Provincial Finance Limited (PFL) being placed in receivership,” Best explained. “A significant volume of Tasman’s business is generated through PFL; therefore, the recent development in PFL will severely affect Tasman’s financial performance.

“The rating also considers Tasman’s relatively weak risk-adjusted capitalization and the risk of potential impairment associated with its receivables from and investments in PFL.” Best said it would “continue to closely monitor the situation as it develops.”