AM Best


A.M. Best Withdraws Ratings of Royal State National Insurance Company Ltd.


CONTACTS:

Jeffrey Lane
Managing Senior Financial Analyst
+1 908 439 2200, ext. 5567
jeffrey.lane@ambest.com

Doniella Pliss
Managing Senior Financial Analyst
+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
Assistant Vice President, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - AUGUST 30, 2016 11:11 AM (EDT)
A.M. Best has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of “bbb-” of Royal State National Insurance Company Ltd. (Royal State) (Honolulu, Hawaii). The outlook of each rating remains stable. Concurrently, A.M. Best has withdrawn the ratings of the company upon management’s request to no longer participate in A.M. Best’s interactive rating process.

The ratings reflect Royal State’s established market position in the supplemental accident and health and life insurance product segments, with a concentration in state government-sponsored unions, credit unions and professional trade associations in Hawaii. The ratings also recognize Royal State’s strong risk-adjusted capital position for its insurance and investment risks, as measured by Best’s Capital Adequacy Ratio (BCAR). In addition, the company has focused on operational improvements, reducing administrative expenses and initiatives to improve operating performance, which has resulted in a return to profitability in the first quarter of 2016.

Offsetting rating factors include the company’s unsuccessful bid to retain the group active and retiree life business, which it previously had gained effective Jan. 1, 2012, from the Employer-Union Trust Fund (EUTF). As a result, the company lost the premium revenue from these businesses in 2015. In addition, the company’s reliance on two large employer group customers for a sizable portion of its premium revenue exposes it to business concentration risk, and a concentration of business in a single state exposes it to market and regulatory risks.

This press release relates to rating(s) 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.

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AMB# Company Name
007012 Royal State National Ins Co, Limited