A.M. Best Affirms Ratings of Trustmark and Revises Outlooks.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of B++ (Very Good) and the issuer credit ratings (ICR) of "bbb" of Trustmark Insurance Company (Trustmark) and Trustmark Life Insurance Company (Trustmark Life). The FSR outlook has been revised to stable from negative. Concurrently, A.M. Best has affirmed the debt rating of "bb-" on $75 million trust preferred securities due June 30, 2035 of Trustmark Finance Trust I. The outlook for this rating and the ICRs has been revised to positive from negative. All companies are domiciled in Lake Forest, IL. E[acute accent]A.M. Best's revised outlooks reflect Trustmark's improved capital adequacy and favorable operating results. Trustmark continues to have uncertainties with its involvement in a troubled workers' compensation reinsurance pool (WEB). However, the company has taken steps to ensure that in the event of an unfavorable ruling on the largest WEB liability (Superior National), the organization's capital position would remain adequate. E[acute accent]Additionally, Trustmark has signed a definitive agreement to sell its shares in Private Health Care System (PHCS), a national PPO network. This pending sale will benefit Trustmark by bolstering its risk-based capital position, reducing its exposure to equities and has the potential to improve network discounts. Upon completion of the PHCS sale, A.M. Best will likely upgrade the ICR of the insurance companies to "bbb+" and the trust preferred securities to "bb" and revisit the financial strength rating outlook. E[acute accent]Although A.M. Best believes that Trustmark is better prepared to deal with the potential "worst case" risk exposure involving WEB, the lack of final closure, coupled with the potential constraint on capital deployment, remains a concern for the near term. Furthermore, one of Trustmark's core product lines, group major medical, continues to be a highly competitive product with potential for lower margin returns and regulatory scrutiny. A.M. Best will continue to monitor Trustmark's progress in resolving the WEB-related issues as well as growth in its core and ancillary lines of business.

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