Moody's Investors Service said it has upgraded the Louisiana Citizens Property Insurance Corp.'s assessment revenue bonds to Baa1 from Baa2.
The outlook has been changed to stable from positive.
The rating upgrade reflects strengthened management and administrative processes, and some successful depopulation of policies from Louisiana Citizens to private insurers.
The bonds have a strong legal security, which involves issuing emergency assessments on property insurance policyholders throughout the state to pay for debt service.
The rating also reflects enhanced bondholder protection provided by two debt-service reserve funds, strong state support for the program, and fairly strong liquidity and claims-paying ability.
Those strengths are offset by a history of fairly weak administrative processes and technology issues; the uncertainty around process and security in the aftermath of a very large storm event; and the dependence on market access.