A.M. Best Affirms Rating of Connecticut Medical Insurance Company; Revises Outlook to Positive.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of B++ (Good) of Connecticut Medical Insurance Company (CMIC) (Glastonbury, CT). The outlook for the rating has been revised to positive from stable.

The rating reflects CMIC's improved risk-adjusted capitalization, its recent profitability and conservative loss reserving philosophy. Management's actions to achieve rate adequacy, improve its book of business and build conservatism in its loss reserves has resulted in the generation of operating profitability and a strengthened capital position. The implementation of significant rate increases in addition to the strict enforcement of underwriting standards has resulted in a substantial decrease in members in prior years, primarily those with higher than expected losses. CMIC now maintains a more balanced mix of medical specialties at a more adequate rate level.

These positive rating factors are partially offset by the inherent challenges associated with largely being a single state, monoline medical malpractice insurer, particularly as they relate to price competition, legislative (tort) reform, loss cost trends and regulatory challenges.

The rating also recognizes the large swing in earnings and overall lackluster underwriting results over the long term. The outlook is based on A.M. Best's expectation that CMIC will sustain profitability and risk-adjusted capitalization as well as maintain rate and reserve adequacy.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.