A.M. Best Affirms Ratings of Universal American Financial Corp.; Assigns Issuer Credit Ratings.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings of B++ (Very Good) and has assigned issuer credit ratings (ICR) of "bbb+" to the majority of Universal American Financial Corp.'s (Universal American) (NASDAQ: UHCO) (Rye Brook, New York) insurance subsidiaries. A.M. Best has also assigned an ICR of "bb+" to Universal American.

Additionally, A.M. Best has affirmed the financial strength rating of B+ (Very Good) and has assigned an ICR of "bbb-" to Union Bankers Insurance Company (Union Bankers) (McKinney, TX). Concurrently, A.M. Best has affirmed the indicative ratings of "bb+" on senior debt, "bb" on subordinated debt and "bb-" on preferred stock securities of Universal American, which may be issued under a $140 million shelf registration. All ratings have a stable outlook. (See link below for a complete list of the ratings.)

These rating affirmations reflect Universal American's proactive business strategy, growing presence in the U.S. senior insurance marketplace, adequate level of overall risk-adjusted capitalization and favorable liquidity and financial flexibility maintained by the parent holding company. A.M. Best believes that Universal American is well-positioned to grow its core business going forward. Additionally, the group has multiple distribution channels and strategic partnerships with other companies in the senior market.

Offsetting factors include the organization's business concentration in the senior health insurance market, the uncertainties and risks associated with Universal American's expanded strategy and its relatively modest statutory operating results. To support its growth strategy, Universal American recently announced a secondary offering to sell two million of its shares. A.M. Best looks favorably on this event, since the proceeds will partly be contributed to Universal American's fastest growing insurance entities. This growth strategy has somewhat inhibited the organization's statutory operating results. Universal American's debt-to-capital ratio remains within the range for its ratings, and the company maintains a favorable fixed coverage ratio to service its outstanding debt.

Additionally, A.M. Best has assigned a financial strength rating of B+ (Very Good) and an ICR of "bbb-" to Selectcare of Texas, LLC (Selectcare) (Houston, TX).

This rating assignment reflects Selectcare's growing presence in certain Medicare Advantage markets, its improving profitability levels and maintenance of a conservative investment portfolio. The rating also reflects the ownership position Universal American has in Selectcare. Offsetting factors include Selectcare's concentrated business profile, risks associated with expanding its territory served and the company's currently relatively modest risk-adjusted capital position.

For a complete list of Universal American Financial Corp.'s financial strength, issuer credit and debt ratings, please visit http://www.ambest.com/press/060905universalamerican.pdf.

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

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 http://www.ambest.com.