Ratings downgrades of SHA, LLC, and Southwest Life & Health Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has downgraded the financial strength rating to B- (Fair) from B (Fair) and issuer credit rating to "bb-"from "bb" of SHA, LLC (SHA) (d/b/a Firstcare) and its subsidiary, Southwest Life & Health Insurance Company (SWLH) (both of Austin, TX). The outlook for all ratings is stable.

The downgrades reflect SHA's continued decline in capitalization as shown by Best's Capital Adequacy Ratio, which is undercapitalized for the current ratings. SHA's unfavorable underwriting results, which were the highest in 2008 at more than $10 million, continue as of second quarter 2009. Investment losses in 2008 also were significant enough to substantially pressure the capitalization and overall standing of the health plans. A.M. Best does expect SHA to improve its capitalization due to financial support from its parents, Covenant Health System and Hendrick Health System, but A.M. Best remains concerned over the company's underwriting results coupled with planned membership decline.

A.M. Best's capital concerns are somewhat mitigated by financial guarantees"”filed with the Texas Department of Insurance"”from both owners, which can infuse additional capital into SHA and SWLH to ensure their solvency. Both companies' excellent quality measures and explicit parental support of two non-profit healthcare systems provide for a certain competitive advantage and strong local presence.

For Best's 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

Eva Sverdlova, 908-439-2200, ext. 5733

eva.sverdlova@ambest.com

or

Joseph Zazzera, 908-439-2200, ext. 5797

joseph.zazzera@ambest.com

or

Public Relations

Jim Peavy, 908-439-2200, ext. 5644

james.peavy@ambest.com

or

Rachelle Morrow, 908-439-2200, ext. 5378

rachelle.morrow@ambest.com

Source: A.M. Best Co.