DBRS Requests Comments on Proposed Rating Methodology for Rating U.S. Insurance Premium Finance Securitizations

DBRS is requesting comments on the proposed rating methodology for U.S. asset-backed (“ABS”) transactions backed by insurance premium finance loans originated for the purposes of paying premiums on property and casualty insurance. Comments should be received on or before January 15, 2010. Please submit your comments to the following e-mail address: dbrsinsurancepremiumcomments@dbrs.com. DBRS will publish a final methodology following the review and evaluation of all submissions.

The methodology provides an overview of the key factors which DBRS believes could impact the performance of U.S. insurance premium finance loan ABS and our approach for rating these transactions. These factors include:

•Type and structure of the underlying loans making up the collateral for the transaction;
•Credit quality (claims paying ability) of the insurance carriers providing the insurance;
•Transaction capital structure, proposed ratings and credit enhancement;
•Capabilities of the finance company to originate, underwrite and service the receivables;
•Transaction legal structure and opinions.

The primary risks in ABS secured by insurance premium finance loans relate to (i) the insurance carriers who provide the insurance and rebate unearned premiums to the finance company, in the event a policy is cancelled prior to the fulfillment of the policy term and (ii) the quality of servicing which includes billing and collecting on outstanding loans and pursuing unearned premiums from insurance carriers in the event of non-payment on an outstanding loan.

DBRS criteria and methodologies are publicly available on its website www.dbrs.com under Methodologies.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.