A.M. Best Withdraws Ratings of Provident American Insurance Company.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of D (Poor) and issuer credit rating (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "c" of Provident prov·i·dent adj. 1. Providing for future needs or events. 2. Frugal; economical. [Middle English, from Latin pr American Insurance Company (Provident American) (Dallas, TX). The outlook for both ratings is negative. Subsequently, A.M. Best has withdrawn the ratings and assigned a category NR-4 (Company Request) to Provident American in response to management's request that the company be removed from A.M. Best's interactive rating process. The ratings reflect Provident American's weak risk-adjusted capital position along with the low absolute level of capital as the company operates in run off. This is despite consistent capital support from its parent, Sonic Financial Corp. The weak capital position is primarily due to substantial net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. over the last five-year period in its core and ancillary lines of business. A.M. Best expects these operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. to continue for the foreseeable future and believes that Provident American does not have the ability to meet its policyholder obligations going forward without the capital support from its parent. 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. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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