A.M. Best Assigns Ratings to CIGNA Health and Life Insurance Company

A.M. Best Co. has assigned a financial strength rating of A (Excellent) and an issuer credit rating of “a” to CIGNA Health and Life Insurance Company (CHLIC) (Bloomfield, CT), a subsidiary of Connecticut General Life Insurance Company (CGLIC), which is an indirect wholly owned subsidiary of CIGNA Corporation (CIGNA) [NYSE: CI]. The outlook assigned to both ratings is negative.

The ratings of CHLIC are based on its strong capital position and the implicit support of CGLIC. Additionally, the favorable rating implications include a transition plan to move selected CGLIC’s mid-sized market segment clients into CHLIC, along with the business growth from actively marketing new business beginning in 2011.

Offsetting these favorable factors is the concentration risk of managing a narrow range of business, as CHLIC will focus primarily on the mid-sized market segment. CHLIC will need to file products and/or rates in each of the states in which it intends to compete, which may pose regulatory risks. Furthermore, there are risks associated in transitioning the existing business from CGLIC to CHLIC.

The negative outlook reflects the rating outlook of CHLIC’s intermediate parent, CGLIC.

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”; “Rating New Company Formations”; “Assessing Country Risk”; and “Risk Management and the Rating Process for Insurance Companies.” Methodologies can be found at http://www.ambest.com/ratings/methodology.