AM Best Places Credit Ratings of EmblemHealth, Inc.’s Insurance Subsidiaries Under Review With Developing Implications
31 July 2024 - 9:39PM
Business Wire
AM Best has placed under review with developing
implications the Financial Strength Rating (FSR) of C (Weak) and
the Long-Term Issuer Credit Ratings (Long-Term ICR) of “ccc” (Weak)
of Health Insurance Plan of Greater New York, EmblemHealth
Insurance Company and EmblemHealth Plan, Inc., collectively
referred to as Emblem. Concurrently, AM Best has placed under
review with developing implications the FSR of C (Weak) and the
Long-Term ICR of “ccc” (Weak) of ConnectiCare, Inc. (ConnectiCare)
(Farmington, CT). All companies are subsidiaries of EmblemHealth,
Inc. and are domiciled in New York, NY, unless otherwise
specified.
The Credit Ratings (ratings) reflect EmblemHealth Group’s
(EmblemHealth) balance sheet strength, which AM Best assesses as
very weak, as well as its marginal operating performance, neutral
business profile and marginal enterprise risk management.
AM Best has placed the ratings of Emblem under review with
developing implications following the announcement on July 23rd
that EmblemHealth has agreed to sell ConnectiCare Holding Company,
Inc. to Molina Healthcare, Inc. for $350 million. This transaction,
when complete is expected to substantially increase absolute and
risk-adjusted capitalization at EmblemHealth. The transaction is
expected to be completed by the first half of 2025. The expectation
is that the Emblem organization, including its primary regulated
entity, Health Insurance Plan of Greater New York's surplus will
receive a sizable net contribution from this sale. The ratings will
remain under review while AM Best meets with management to further
discuss the ultimate impact of the transaction on the
organization’s financial condition.
Concurrently, AM Best has placed the ratings of ConnectiCare
under review with developing implications due to the pending
transaction. The ratings reflect ConnectiCare’s balance sheet
strength, which AM Best assesses as very weak, as well as its
marginal operating performance, neutral business profile and
marginal enterprise risk management. The ratings of ConnectiCare
will remain under review pending completion of the transaction and
until AM Best can complete its assessment of ConnectiCare’s
post-acquisition rating fundamentals.
This press release relates to Credit Ratings that have been
published on AM 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 AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please
view Guide to Best's Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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