After A.M. Best downgraded the financial strength ratings of the insurance operations of Meadowbrook Insurance Group on Friday, the insurer announced on Monday that it had entered into an agreement with State National Insurance Co. to provide “A” rated policies for a portion of its business.

A.M. Best’s decided on Friday to downgrade Meadowbrook’s financial strength rating to “B++” (good, with a stable outlook).

Robert S. Cubbin, Meadowbrook president and chief executive officer, said that following the downgrade, the insurer “immediately completed an assessment” of all its programs and specialty divisions to determine where an “A” rated policy issuer is required.

On Monday, Cubbin announced the deal to partner with State National Insurance for that “A-rated” paper.

State National Insurance Co. is an affiliate of Texas-based State National Companies, which currently writes more than $600 million in premium. It provides national access to property/casualty products, programs and markets by acting as a policy-issuing carrier for program managers and insurers nationwide.

“I want to personally assure our agency partners, policyholders and shareholders, that despite the challenges we encounter, Meadowbrook is committed to providing secure, quality insurance products,” Cubbin said. “We have taken steps to enhance our capital and we now have nearly $500 million in statutory surplus.”

On Monday, Meadowbrook Insurance Group Inc. slumped the most in the Standard and Poor’s SmallCap Financials Index after news of its downgrade and the announcement that earnings in the second half could miss the company’s forecast.

Meadowbrook fell about 11 percent to $6.74 in New York. A.M. Best downgraded the Southfield, Michigan-based insurer’s financial-strength rating on Aug. 2 to B++ from A-.

“The downgrade will clearly impact Meadowbrook’s agent and broker relationships and its target market,” Robert Paun, an analyst at Sidoti & Co., said in a research note. Paun downgraded his Meadowbrook rating to neutral from buy and cut his target price to $6 from $10.

CEO Cubbin said in a statement that Meadowbrook expects to “modestly” reduce its forecast for the third and fourth quarters. The insurer had forecast operating profit in the second half of 45 cents to 50 cents a share. Meadowbrook announced last week that it had hired Willis Group Holdings Plc to evaluate options for the company.

“The formal announcement of evaluating strategic alternatives is a sign that the board is evaluating a sale,” Randy Binner, an analyst at FBR Capital Markets, said in a research note.

Bloomberg contributed to this report.