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FOR IMMEDIATE RELEASE
OLDWICK - SEPTEMBER 30, 2021 09:35 AM (EDT)
AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” (Excellent) from “a-” (Excellent) of Community Hospital Alternative For Risk Transfer (A Reciprocal Risk Retention Group) (CHART) (Burlington, VT). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect CHART’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The ratings upgrade reflect continued strengthening of CHART’s balance sheet, as measured by the trend in risk-adjusted capital and the continued benefits derived from the company’s strong operating results. AM Best believes that CHART will maintain a balance sheet strength assessment at the higher end of the very strong category, despite ongoing cash dividends to its existing members as well as any capital distributions to be used to return capital to its former members.
Member withdrawals have historically been driven by merger and acquisition activity among health systems, which management believes is slowing. CHART’s ability to retain members’ capital for a three- to five-year period after a member’s departure safeguards against a run on the bank scenario and provides collateral for future claims emergence. Although the company’s balance sheet may shrink in future periods, AM Best believes risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is expected to be maintained at the strongest level. In addition, AM Best expects that key balance sheet strength considerations, such as underwriting leverage metrics, will continue to be supportive of CHART’s ratings.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.