A.M. Best Co. has affirmed the financial strength rating (FSR) of B++ (Good) and issuer credit ratings (ICR) of “bbb” of National Security Group (National Security) and its member, National Security Fire and Casualty Company. A.M. Best also has affirmed the ICR of “bb” of National Security’s parent company, The National Security Group, Inc. (Wilmington, DE) [NASDAQ: NSEC]. The outlook for these ratings is negative. Additionally, A.M. Best has affirmed the FSR of B+ (Good) and ICR of “bbb-” of National Security’s wholly owned subsidiary, Omega One Insurance Company, Inc (Omega One). The outlook for both ratings is stable. Concurrently, A.M. Best has revised the outlook to positive from stable and affirmed the FSR of B (Fair) and ICR of “bb+” of the group’s life/health company, National Security Insurance Company (NSIC). All companies are domiciled in Elba, AL, except where specified. The ratings of National Security reflect its adequate risk-adjusted capitalization, generally positive earnings, established niche position as a provider of dwelling/fire coverage and the actions taken by management to reduce exposure to catastrophic losses and improve earnings. These positive rating factors are offset in part by the group’s concentration in property and auto lines of business in the Gulf Coast states and its low per risk retention that subjects earnings to underwriting volatility and exposes surplus to severe weather-related events. Although capitalization and earnings have improved over the last two years, A.M. Best is maintaining a negative outlook on the ratings due to uncertainty regarding the group’s exposure to legal actions being taken against The National Security Group, Inc. regarding its sale of shares in Mobile Attic Inc. in 2007. The ratings of Omega One acknowledge its sound capitalization and historically favorable operating performance, partially offset by recent strong growth in the Louisiana non-standard auto market, negative earnings trend and limited business profile.