A.M. Best Affirms Ratings of QCA Health Plans, Inc.; Revises Outlook to Positive.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of B (Good) and issuer credit rating of "bb+" of QCA QCA - Quantum-dot Cellular Automata Health Plans, Inc. (QCA) (Little Rock, AR). The outlook for both ratings has been revised to positive from stable. The revised rating outlook reflects strong capitalization, consistent operating margins and reorganization of management functions that have led to significant cost savings for the health plan. QCA has continued to improve its risk-based capital (RBC RBC red blood cell. RBC or rbc abbr. red blood cell RBC, n See red blood cell count. RBC red blood cells; red blood (cell) count (see blood count). ). Conversion of surplus notes and interest to preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. in 2006, along with stable underwriting and investment returns have driven improved capitalization according to Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. (BCAR BCAR Brunswick County Association of Realtors BCAR British Civil Airworthiness Requirements BCAR Bullitt County Animal Rescue (Shepherdsville, KY) BCAR Business Case Analysis Report BCAR Beaver Creek Array BCAR Buffalo Civic Auto Ramps, Inc. ). QCA finished 2007 with a strong operating margin consistent with prior years, despite a decline in membership. Earnings improvement also is due to the restructuring of management functions, which has led to administrative cost administrative cost Managed care A cost incurred by the 'business' end of a health care facility or university–eg, staffing and personnel costs, nursing home and hospital administration, insurance, and overhead expenses. Cf Indirect costs. savings in excess of $2 million in 2007. QCA experienced another year of declining membership in 2007, adding pressure to premium growth; however, QCA is forecasting aggressive growth for 2008. A.M. Best is concerned with the risks associated with this growth, including double digit increases in medical and administrative costs, which could put additional pressure on margins over the medium term despite QCA's forecasted margin improvements. 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 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. |
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