TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis. The short sellers of insurance stocks are back. Taking the most heat is Citizens ( CIA), with a short interest ratio of 17.6, up 3.8 in a week. Citizens, however, has outperformed its peers, and analysts' consensus price target for 2009 is $9. Someone has got it wrong. The largest increase in short interest, up 5.7 to 12.9, was in Ambac Financial Group ( ABK), recently declared solvent by Wisconsin's insurance regulator after it abandoned its attempts to create a separate corporate bond insurance company. It's struggling to reach an agreement over its guarantee for swaps between UBS ( UBS) and the Massachusetts Turnpike Authority following Moody's downgrade. Primus Guarantee ( PRS), a volatile stock with a beta of 1.7, has a short interest ratio of 15.4, an increase of 4. The shares have fallen 30% during the past year. Maybe some believe the credit swap insurance market is exposed. Certainly, Primus was displeased and asked that its ratings be withdrawn last month when Standard & Poor's downgraded the company. Auto insurer Mercury General ( MCY) received a negative outlook from Moody's last month after it received approval for a 3% rate cut in its California market. It holds third place behind State Farm and Zurich Financial Services' Farmers Group, which completed the purchase of American International Group's ( AIG) car insurance subsidiary, 21st Century, on July 1. That competitive situation appears to have some nervous, as rate reductions keep receiving approvals. With a short interest ratio of 12.6, up 3.7 in the week, even this company with a low-volatility beta of 0.83 faces an examination.