Table of Contents jurisdiction's regulatory capital adequacy formula. If we do not meet these minimum requirements  we may be restricted or prohibited from operating our business in the applicable jurisdictions and specialized markets. If we are required to record a material charge against earnings in connection with a change in estimated insurance reserves  the occurrence of a catastrophic event  or if we incur significant losses related to our investment portfolio  which severely deteriorates our capital position  we may violate these minimum capital adequacy requirements unless we are able to raise sufficient additional capital. We may be limited in our ability to raise significant amounts of capital on favorable terms or at all. The IAIS recently adopted a common framework for the supervision of internationally active insurance groups and continues to develop a group basis Insurance Capital Standard (ICS). The NAIC is also developing a group capital standard that is intended to be comparable to the ICS. The development and adoption of these capital standards could increase our prescribed capital requirement  the level at which regulatory scrutiny intensifies  as well as significantly increase our cost of regulatory compliance. We are a holding company and are dependent upon dividends  loans and other sources of cash from our subsidiaries in order to meet our obligations. Ordinary dividend payments  or dividends that do not require prior approval by the insurance subsidiaries' domiciliary insurance regulator  are generally limited to amounts determined by formulas that vary by jurisdiction. If we are restricted from paying or receiving intercompany dividends  by regulatory rule or otherwise  we may not be able to fund our corporate obligations and debt service requirements or pay our stockholders dividends from available cash. As a result  we would need to look to other sources of capital which may be more expensive or may not be available at all. Ratings are an important factor in establishing the competitive position of insurance companies. Our insurance company subsidiaries  as well as our public debt  are rated by rating agencies  including  A.M. Best Company (A.M. Best)  Moody's Investors Service  Inc. (Moody's) and Standard & Poor's (S&P). Ratings reflect the rating agency's opinions of an insurance company's or insurance holding company's financial strength  capital adequacy  enterprise risk management practices  operating performance  strategic position and ability to meet its obligations to policyholders and debt holders. The rating agencies may take action to lower our ratings in the future as a result of any significant financial loss or possible changes in the methodology or criteria applied by the rating agencies. The severity of the impact on our business is dependent on the level of downgrade and  for certain products  which rating agency takes the rating action. Among the adverse effects in the event of such downgrades would be the inability to obtain a material volume of business from certain major insurance brokers  the inability to sell a material volume of our insurance products to certain markets and the required collateralization of certain future payment obligations or reserves. In addition  it is possible that a significant lowering of the corporate debt ratings of Loews by certain of the rating agencies could result in an adverse effect on our ratings  independent of any change in our circumstances. The insurance industry is subject to comprehensive and detailed regulation and supervision. Most insurance regulations are designed to protect the interests of our policyholders and third-party claimants  rather than our investors. Each jurisdiction in which we do business has established supervisory agencies that regulate the manner in which we do business. Any changes in regulation could impose significant burdens on us. In addition  the Lloyd's marketplace sets rules under which its members  including our Hardy syndicate  operate. Our insurance subsidiaries  upon whom we depend for dividends in order to fund our corporate obligations  are limited by insurance regulators in their ability to pay dividends. Rating agencies may downgrade their ratings of us and thereby adversely affect our ability to write insurance at competitive rates or at all. We are subject to extensive existing state  local  federal and foreign governmental regulations that restrict our ability to do business and generate revenues; additional regulation or significant modification to existing regulations or failure to comply with regulatory requirements may have a materially adverse effect on our business  our operations and financial condition. 13