A.M. Best Assigns Ratings to National Health Insurance Company

A.M. Best Co. has assigned a financial strength rating of B++ (Good) and an issuer credit rating of bbb to National Health Insurance Company (NHIC) (Grand Prairie, TX). The outlook assigned to both ratings is stable.

The ratings of NHIC reflect the company's stable management, a well developed business plan, a high level of capital and positive operating results. Key members of NHIC’s senior management team remain in place since the company was acquired by Southwest Insurance Partners. The organization has a comprehensive business plan to bring the company and its products back into the marketplace. NHIC’s capital level is more than adequate for its current level of business and will be able to support projected premium growth in the near to mid term. NHIC has consistently reported positive operating results on its renewal book of business over the last four years, which is attributed to the appropriate pricing of the business during this time.

Offsetting factors include the company recently starting to write new business after a five year absence, a competitive market and a target market segment that is currently under a high level of economic pressure. NHIC was under Article 1.32 supervision by the Texas Department of Insurance from September 2003 to September 2008, when NHIC was acquired by Southwest Insurance Partners. NHIC voluntarily stopped writing new business in August 2003 and just received its first new business application in February 2009. NHIC will need to re-establish itself in the market place after being out of the market for five years. The market NHIC plans to re-enter has become more competitive in recent years due to the entrance or expansion of operations in the individual and small group segments by large national carriers, regional companies and local Blue plans. NHIC’s target market has historically been price sensitive but it has become more pronounced as these segments look to contain their cost due to the general state of the economy.

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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.