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A.M. Best Downgrades Credit Ratings of Colorado Choice Health Plans; Revises Under Review Status to Negative


CONTACTS:

Brian Virostek
Financial Analyst
+1 908 439 2200, ext. 5531
brian.virostek@ambest.com

Doniella Pliss
Associate Director
+1 908 439 2200, ext. 5104
doniella.pliss@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - SEPTEMBER 19, 2017 02:35 PM (EDT)
A.M. Best has downgraded the Financial Strength Rating to C (Weak) from C++ (Marginal) and the Long-Term Issuer Credit Rating to “ccc+” from “b+” of Colorado Choice Health Plans (Colorado Choice) (Alamosa, CO). A.M. Best also has maintained the under review status, while revising the implications to negative from developing.

Colorado Choice was acquired by Friday Health Plans in June 2017 and received several capital contributions in the form of surplus notes from its new parent. Higher capital and surplus was partially offset by larger than expected payments related to the Affordable Care Act’s risk-adjustment program. As a result, the company’s level of risk-adjusted capitalization remains below the statutory minimum requirements and A.M. Best’s expectations.

The company is actively working on securing additional external capital contributions, as well as pursuing reinsurance options including surplus relief. A.M. Best is concerned that Colorado Choice might be unable to meet its obligations to policyholders if the capital infusion is further delayed or is insufficient. The ratings will remain under review with negative implications pending the outcome of the company’s efforts to improve capitalization. A.M. Best will continue to monitor the financial condition of Colorado Choice and will maintain ongoing discussions with company management.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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AMB# Company Name
068945 Friday Health Plans of Colorado, Inc.