CPHL Castlepoint Holdings Ltd (MM)

A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of �a-� of CastlePoint Insurance Company (CPIC) (New York) and CastlePoint Reinsurance Company, Limited (CPRe) (Bermuda). A.M. Best has also affirmed the ICR of �bbb-� of CastlePoint Holdings, Ltd (CastlePoint) (Bermuda) [NASDAQ: CPHL]. All the above ratings have been removed from under review with negative implications and assigned a stable outlook. A.M. Best has completed its due diligence of the operational and financial details related to the June 22, 2007 announcement that CastlePoint had entered into a risk sharing agreement with AequiCap Insurance Company (AIC) and Aequicap Program Administrators (APA), whereby APA would produce workers� compensation and commercial automobile business of which CPIC and CPRe would participate and retain risk. Although A.M. Best remains concerned with the relative size of this agreement, as well as the historical and prospective loss experience of this business, CastlePoint and its entities have demonstrated that an acceptable level of due diligence had been performed prior to entering this agreement. Additionally, it appears that underwriting, claims, operational controls and oversight by CastlePoint will provide for early intervention, if necessary. Moreover, the group�s current risk-adjusted capitalization remains adequate at current rating levels, and projected financial results are largely consistent with the business plan provided to A.M. Best from CastlePoint. A.M. Best will monitor the performance of this transaction, as well as the risk profile of CastlePoint should it enter into any additional transactions of materiality. For Best�s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.