Fitch Upgrades Trustmark Insurance Company's IFS Rating to 'A-'; Outlook Stable.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has upgraded the insurer financial strength ratings (IFS) of Trustmark Insurance Company (Trustmark Insurance) and Trustmark Life Insurance Company (Trustmark Life) to 'A-' from 'BBB+'. The Rating Outlook has been revised to Stable from Positive. Fitch rates these companies (collectively known as Trustmark) on a combined basis given their shared senior management, investment management, and brand identification. Today's rating action follows Fitch's evaluation of the company's 2006 operating performance and reflects a significant improvement in Trustmark's capital position during the year. Trustmark has taken positive steps to improve its risk adjusted capitalization over the last 18 months through strong earnings, issuance of debt and the sale of its interest in Private Healthcare Systems, Inc. (PHCS PHCS Private Healthcare Systems PHCS Primary Health Care Service PHCS Preventive Health Care System PHCS Princeton Health Care System (Princeton, New Jersey) PHCS Senior Chief Photographer's Mate (Naval Rating) ), a provider network rental business. Fitch's primary concerns involve Trustmark's modest competitive position in the health insurance market, where size and network strength have become crucial to maintaining market position. In addition, Trustmark continues to be involved in litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. stemming from its participation in a worker's compensation carve out Carve out Usually occurs when a company decides to IPO one of their subsidiaries or divisions. The company usually only offers a minority share to the equity market. Also known as equity carve out. agreement with a large reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. . The business covered by this reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. contract was written by subsidiaries of Superior National Insurance Group (Superior National) prior to its seizure by the California Department of Insurance The California Department of Insurance (CDI), established in 1868, is the angency charged with overseeing the regulation of insurance regulations, enforcing statutes mandating consumer protections, educating consumers, and fostering the stability of insurance markets in the state in March 2000 and has experienced significant adverse loss development. In its evaluation of Trustmark's capital position, Fitch has assumed what it considers to be a worst-case loss scenario, specifically with regard to the dispute with the primary reinsurer for purposes of today's rating action. Fitch believes that given a worst-case loss scenario, the company will maintain its strong capital position given its current risk profile. Fitch's ratings upgrade on Trustmark Insurance and Trustmark Life reflect the combined company's strong earnings performance, high quality asset portfolio, and good risk-adjusted capitalization. Trustmark's performance has been favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. affected by management focus on premium rate adequacy, expense controls and its decision to reduce or eliminate non-productive segments. The ratings also consider increasing competitive challenges in the health insurance and managed care sector and losses in its CoreSource business. Lake Forest, Illinois-based Trustmark provides a variety of medical and voluntary benefit products to the group and worksite markets. The company also offers claims and administrative services through its affiliated third-party administrator, CoreSource, Inc. as well as fraud and abuse protection services through its Sentinel Group business. At Sept. 30, 2006, Trustmark and Trustmark Life reported combined total assets of $1.8 billion and capital and surplus of $342 million. Fitch rates Trustmark as follows: Trustmark Insurance Company Trustmark Life Insurance Company --Insurer financial strength upgraded to 'A-' from 'BBB+'; The Rating Outlook has been revised to Stable from Positive. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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