A.M. Best Maintains Under Review Status on Ratings of North Coast Life Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has maintained the under review with positive implications status on the financial strength rating (FSR) of C+ (Marginal) and issuer credit rating (ICR) of “b-” of North Coast Life Insurance Company (North Coast) (Spokane, WA). This action follows the recent announcement that North Coast has reached an agreement on the amount of purchase with Government Personnel Mutual Life Insurance Company (GPM) pursuant to the acquisition of North Coast by GPM.

The ratings were initially placed under review following the October 19, 2010 announcement by North Coast of its intention to be acquired by GPM. Discussions toward a definitive agreement of sale continued throughout 2011, with several extensions of the deadline for consummation being issued during the year. The most recent announcement, issued in February 2012, now indicates a mid-year 2012 close.

A.M. Best notes that North Coast and GPM previously were strategic partners, as they have had a reinsurance agreement in place since 2008. The under review with positive implications status continues to reflect the potential incorporation of North Coast policyholders into a stronger organization. The ratings will remain under review pending regulatory approval and the change in ownership expected to take effect later this year.

In the event that the transaction does not go forward as planned, the ratings of North Coast would likely be affirmed with a stable outlook, due to its improved profitability and absolute capital levels through year-end 2011.

The FSR of A- (Excellent) and ICR of “a-” of GPM are unchanged by this transaction.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies” and “Understanding BCAR for Life/Health Insurers.” Best’s Credit Rating Methodology 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 © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Andrew Gold,908-439-2200, ext. 5487
Senior Financial Analyst
[email protected]
or
Richard McMillan, 908-439-2200, ext. 5615
Managing Senior Financial Analyst
[email protected]
or
Rachelle Morrow, 908-439-2200, ext. 5378
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.