A.M. Best Affirms Ratings of Medco Containment Life Insurance Company and Medco Containment Insurance Company of New York

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” for Medco Containment Life Insurance Company (headquartered in Franklin Lakes, NJ) and Medco Containment Insurance Company of New York (Clifton Park, NY). The outlook for both ratings is stable.

The ratings are based on the premium growth, positive operating results and the strong capitalization at Medco Containment Life Insurance Company and strong premium growth and capitalization at Medco Containment Insurance Company of New York. Growth in net premiums written at the two companies has been exceptional over the medium term, and aggregate underwriting results have been positive and stable. Capital levels at the companies are more than adequate for the current level of business. Capital growth in 2010 largely was due to contributions from its parent, Medco Health Solutions [NYSE: MHS].

The companies have very limited product portfolios, consisting primarily of Medicare Part D business that is offered to Medco Health Solutions clients and individuals, as well as auto enrollment of individuals eligible for Medicare and Medicaid in various Centers for Medicare and Medicaid Services (CMS) regions. All long-term revenues are expected to be derived from Medicare Part D products and to be focused on supporting Medco Health Solutions clients. This narrow focus on Medicare poses a market concentration risk.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Rating Health Insurance Companies”; “Understanding BCAR for Life/Health Insurers”; “Risk Management and the Rating Process for Insurance Companies”; and “Rating Members of Insurance Groups.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2011 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Wayne Kaminski, 908-439-2200, ext. 5061
Financial Analyst
[email protected]
or
Sally Rosen, 908-439-2200, ext. 5280
Managing Senior Financial Analyst
[email protected]
or
Rachelle Morrow, 908-439-2200, ext. 5378
<b>Senior Manager, Public Relations
[email protected]
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Co.