A.M. Best Co. has placed the financial strength rating of Toronto-based The Citadel General Assurance Co. under review with developing implications.

The insurer’s rating is currently B++ (Very Good).

A.M. Best said the rating action follows the announcement by Montreal-based AXA Canada Inc. that it intends to acquire Citadel from Winterthur Swiss Insurance Co., a subsidiary of Credit Suisse.

The ratings of AXA Canada’s property/casualty insurance subsidiaries remain unchanged at this time.

Citadel writes personal and commercial lines, with a niche specialization in accident and sickness insurance. The company writes business throughout Canada, with Ontario representing its largest market.

AXA Canada is a leading provider of personal and commercial insurance products in Canada, with primary concentrations in Quebec, Ontario and British Columbia.

In 2004, AXA Canada $2.9 million in assets and $605 million in shareholder’s equity. The acquisition of Citadel, which is estimated to cost between $305 million and $310 million, would place AXA Canada within the top six private insurers in Canada based on 2004 direct premiums written.

A.M. Best will continue its due diligence on the transaction as details are made available.