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FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 17, 2014 03:06 PM (EDT)
A.M. Best has affirmed the financial strength rating (FSR) of A+ (Superior) and the issuer credit rating (ICR) of "aa-" for Health Care Service Corporation, a Mutual Legal Reserve Company (d/b/a Blue Cross Blue Shield of Illinois/Texas/New Mexico/Oklahoma/Montana) (HCSC) (Chicago, IL), and its affiliates: Health Care Service Corporation-Texas HMO Line of Business; Health Care Service Corporation-Illinois HMO Line of Business; HCSC Insurance Services Company; and GHS Health Maintenance Organization (Tulsa, OK). The outlook for the FSR is stable and the outlook for the ICRs is positive. Concurrently, A.M. Best has affirmed the debt rating of "a+" on $500 million, 4.7% senior unsecured notes due 2021 issued by HCSC. The outlook is positive.
A.M. Best also has affirmed the FSR of A+ (Superior) and the ICR of "aa-" for Dearborn National Life Insurance Company (Dearborn National) (Downers Grove, IL) and its subsidiary, Dearborn National Life Insurance Company of New York (Pittsford, NY). The outlook for the FSR is stable and the outlook for the ICRs is positive.
Additionally, A.M. Best has affirmed the FSR of A (Excellent) and the ICR of "a" for Colorado Bankers Life Insurance Company (Colorado Bankers) (Greenwood Village, CO), a subsidiary of Dearborn National. The outlook for the FSR is stable and the outlook for the ICR is positive.
The affirmation of the ratings of HCSC and its affiliates reflects the organization's high level of capital and surplus, leading market position and brand strength, enrollment and premium growth, and geographic and product diversity. HCSC has a history of consistently reporting positive consolidated underwriting and net income results driven by its core health insurance business. These favorable results have contributed significantly to capital and surplus growth and a strong level of risk-adjusted capital. HCSC has a well-established leading market position in each of its five home states and benefits considerably from its brand recognition in these markets. HCSC's business is well diversified regionally operating as the Blue Cross Blue Shield plan in five states. The company offers a comprehensive core health insurance, as well as complementary product portfolio and operates in all market segments. HCSC and its subsidiaries maintain a high level of risk-adjusted capital in support of their business and financial risk.
The affirmation of the ratings of Dearborn National and its subsidiaries reflects their strategic role in providing life, ancillary and worksite products to complement the health products offered by HCSC in order to offer a comprehensive product portfolio to employer groups and individuals, as well as strategic plans for greater sales penetration in HCSC core markets.
Positive rating movement on HCSC's ratings could occur if HCSC reports a continued favorable trend of organic premium and enrollment growth, as well as favorable underwriting and net income results and maintains its strong risk-adjusted capital. A revision of the ICR outlook to stable from positive could occur if the organization is negatively affected by new business from healthcare exchanges, government business expansion, if it attempts to aggressively grow in any non-core business lines or is unfavorably affected by regulatory changes in its primary states.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.