A.M. Best Affirms Ratings of South Dakota State Medical Holding Co., Inc; Outlooks Revised to Negative.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of B+ (Very Good) and issuer credit rating of "bbb-"of South Dakota South Dakota (dəkō`tə), state in the N central United States. It is bordered by North Dakota (N), Minnesota and Iowa (E), Nebraska (S), and Wyoming and Montana (W). State Medical Holding Co., Inc (DAKOTACARE) (Sioux Falls Sioux Falls, city (1990 pop. 100,814), seat of Minnehaha co., SE S.Dak., on the Big Sioux River; settled 1856, inc. as a village 1877, as a city 1883. Settlers abandoned the site in 1862 because of Native American raids, but with the establishment (1865) of Fort , SD). Both rating outlooks have been revised to negative from stable. The rating of DAKOTACARE reflects decreased capital and a higher medical loss ratio. The offsetting factors are good underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. performance and a strong network throughout South Dakota. After major improvements in 2004, DAKOTACARE's capitalization level decreased substantially in 2005 and is at a level that is considered low for its current rating. The reduction in capital was a result of the company using the accumulated capital for the stock buy-back with the purpose of de-registering the company with the Securities and Exchange Commission (SEC) and saving administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. annually by no longer being required to prepare filings. DAKOTACARE was not able to replenish re·plen·ish v. re·plen·ished, re·plen·ish·ing, re·plen·ish·es v.tr. 1. To fill or make complete again; add a new stock or supply to: replenish the larder. 2. the decrease in capital from stock buy-backs through earnings. The medical loss ratio increased by 70 basis points, thus, significantly reducing the net income from prior year, but the company did have net earnings of over 4% of net premiums in 2005. DAKOTACARE has been profitable on both an underwriting and net income basis for the last three years. The company has a strong provider network throughout South Dakota. DAKOTACARE's agreement with providers allows it to withhold with·hold v. with·held , with·hold·ing, with·holds v.tr. 1. To keep in check; restrain. 2. To refrain from giving, granting, or permitting. See Synonyms at keep. 3. up to 20% of fees and to later distribute these fees at its discretion. This withholding arrangement contributes positively to the financial performance of DAKOTACARE and facilitates the provider network. For Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 1,050 health companies and A.M. Best groups, please visit www.ambest.com/health. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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