A.M. Best Lowers Rating for American Republic.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Nov. 27, 2001 A.M. Best Co. has lowered the financial strength rating of A (Excellent) to A- (Excellent) for American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Republic Insurance Company, Des Moines, Iowa “Des Moines” redirects here. For other uses, see Des Moines (disambiguation). Des Moines (pronounced /dɪˈmɔɪn/ in English, , and removed the negative outlook. The lower rating reflects American Republic's concentration and exposure to earnings volatility in the individual major medical and Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. supplement markets, which combined represents nearly 90% of total net premiums written, A.M. Best's increasing concerns regarding the individual major medical market and the company's relatively modest earnings performance. After experiencing weakness in recent years in its individual major medical product line, American Republic has taken numerous corrective actions A corrective action is a change implemented to address a weakness identified in a management system. Normally corrective actions are instigated in response to a customer complaint, abnormal levels if internal nonconformity, nonconformities identified during an internal audit or to improve the segment's results. The company feels comfortable enough presently to look to expand this segment again. However, given the increasing regulatory challenges, on a state and national level, and the rapidly increasing medical and prescription drug prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, costs, A.M. Best believes American Republic may have difficulty in achieving favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. operating results in its core major medical segment. Additionally, for the past few years the company's contracting Medicare supplement block has provided the bulk of its profits. Overall, earnings have been below levels expected for upper end, "Excellent" rated companies in recent years. American Republic is a conservatively managed company that maintains a more than adequate capital and surplus position for the amount of business currently being conducted. Furthermore, American Republic has reported improved operating results in 2001, primarily resulting from the corrective actions that were implemented on its major medical business. American Republic's business plans, which will diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. its top line revenue as well as its bottom line results, continue to be pursued by the company. 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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