A.M. Best Downgrades Blue Cross & Blue Shield of Missouri to "B+" -Very Good- From "A-".OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 4, 1997--Effective immediately, A.M. Best Co. has downgraded Blue Cross & Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. of Missouri, St. Louis, and its operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. to "B+" (Very Good) from "A-" (Excellent). The "B+" rating also is placed under review with developing implications. The actions apply to Blue Cross & Blue Shield of Missouri, Healthy Alliance Life Insurance Co., and HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, Missouri (BlueCHOICE). In addition, RightCHOICE Insurance Co. was downgraded to "B+" (Very Good) from "B++". The group of companies had been under review with negative implications since Aug. 29, 1997, following the announcement of an expected net charge to earnings of $30 million to $40 million. Today's actions are the result of a review of the financial and operational impact of that charge, which is in addition to an already unfavorable 1997 operating experience for RightCHOICE Managed Care, Inc., the publicly held subsidiary of Blue Cross & Blue Shield of Missouri. While consolidated capitalization is adequate, instability in earnings could reduce the organization's capital. In addition, the potential impact on RightCHOICE's existing bank credit line remains uncertain, and any efforts to negotiate new terms See suggestions for new terms. would result in additional pressure on the organization. The company also is involved in discussions with state regulators to resolve uncertainties related to the creation of RightCHOICE. The downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. reflects these issues. The rating will remain under review with developing implications until the organization's situation warrants further action. If its financial condition deteriorates further, it is likely that another downgrade would follow. Nevertheless, A.M. Best views favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. senior management's initiation of more favorable dialogue with the regulatory and governing bodies Noun 1. governing body - the persons (or committees or departments etc.) who make up a body for the purpose of administering something; "he claims that the present administration is corrupt"; "the governance of an association is responsible to its members"; "he of Missouri. Should management succeed in its efforts to resolve its issues with the regulators, a favorable rating action would be likely. A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. CONTACT: A.M. Best Jeffrey Dunsavage 908/439-2200, ext. 5618 dunsavj@ambest.com |
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