Health & Fitness
Health and Fitness
Health and Fitness
Fri, January 7, 2011
Thu, January 6, 2011
A.M. Best Places Ratings of Universal American Corp. and Its Subsidiaries Under Review with Developing Implications
OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has placed under review with developing implications the issuer credit rating (ICR) and indicative debt ratings of Universal American Corp. (Universal American) (Rye Brook, NY) (NYSE: UAM) as well as the financial strength ratings (FSR) and ICRs of its insurance subsidiaries. (See below for a detailed listing of the companies and ratings.)
"A.M. Besta™s Ratings & the Treatment of Debt."
The rating actions follow the announcement that Universal American and CVS Caremark Corporation (CVS Caremark) have entered into an agreement under which CVS Caremark will acquire the Medicare Part D business of Universal American. Under the agreement, CVS Caremark will acquire the outstanding shares of Universal Americana™s common stock and concurrently distribute to the shareholders of Universal American 100% of the shares of a newly formed public company, which will own Universal Americana™s remaining operations including its Medicare Advantage and traditional insurance businesses.
The Medicare Part D business represents a large portion of Universal Americana™s annual revenues and earnings. The under review status reflects that A.M. Best will conduct discussions with Universal Americana™s management regarding its revised business strategy, projections, organizational structure and individual insurance entity operations and capitalization.
The ratings will remain under review until the close of the transaction, which is expected by the end of the second quarter of 2011, subject to shareholder and regulatory approvals and A.M. Besta™s discussions with management.
The FSR of B++ (Good) and ICRs of abbba have been placed under review with developing implications for the following subsidiaries of Universal American Corp.:
- American Progressive Life & Health Insurance Company of New York
- Pennsylvania Life Insurance Company
- The Pyramid Life Insurance Company
The FSRs of B+ (Good) and ICRs of abbb-a have been placed under review with developing implications for the following subsidiaries of Universal American Corp.:
- American Pioneer Life Insurance Company
- Constitution Life Insurance Company
- Marquette National Life Insurance Company
- SelectCare of Texas, LLC
- Union Bankers Insurance Company
The FSR of B (Fair) and ICR of abb+a have been placed under review with developing implications for GlobalHealth, Inc., a subsidiary of Universal American Corp.
The ICR of abba has been placed under review with developing implications for Universal American Corp.
The following indicative debt ratings on the $140 million 2004 shelf registration have been placed under review with developing implications:
Universal American Corp.a" | ||||
| -- abba on senior unsecured debt | ||||
| -- abb-a on subordinated debt | ||||
| -- ab+a on preferred stock |
The principal methodology used in determining these ratings is [ Besta™s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition ], which provides a comprehensive explanation of A.M. Besta™s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: a[ A.M. Besta™s Ratings & the Treatment of Debt ].a Methodologies 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 © 2011 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.
