A.M. Best Revises Outlook to Negative and Affirms Ratings of United Security Assurance Company of Pennsylvania
OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating (FSR) of B+ (Good) and issuer credit rating (ICR) of âbbb-â of United Security Assurance Company of Pennsylvania (United Security) (Souderton, PA).
The negative outlook reflects A.M. Bestâs concern that United Securityâs ultimate parent company, CMS Financial Services Corp. (CMS), has yet to receive sign off from its auditors on its year-end 2008 GAAP financials. A.M. Best notes the high level of intangible assets at CMS, sizeable amount of debt within the organization and continued operating losses at non-insurance risk affiliates. United Security continues to focus on the individual long-term care market, and during 2009, executed a series of assumption and indemnity reinsurance agreements with several unrelated insurers. The acquisitions will help United Security to build critical mass and give better geographic diversity to its inforce business, which has been heavily concentrated in Pennsylvania historically. The company continues to generate operating gains and maintain appropriate risk-adjusted capital.
Recently, all of Colonial American Life Insurance Companyâs (Colonial) (United Securityâs subsidiary) insurance operations were assumed by United Security. Colonial has no ongoing insurance business but will retain its corporate charter and insurance licenses. Consequently, A.M. Best has withdrawn Colonialâs FSR of B+ (Good) and ICR of âbbb-â and assigned an NR-3 (Rating Procedure Inapplicable) to the FSR and an ânrâ to the ICR.
For Bestâs Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
A.M. Best Co.
Analysts
Jeffrey Lane
(908) 439-2200, ext. 5567
[email protected]
or
Carl Austin
(908) 439-2200, ext. 5500
[email protected]
or
Public Relations
Rachelle Morrow
(908) 439-2200, ext. 5378
[email protected]
or
Jim Peavy
(908) 439-2200, ext. 5644
[email protected]
Source: A.M. Best Co.
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