S&P Assigns American Chambers Life `Bpi' Rating.NEW YORK--(BUSINESS WIRE)--July 16, 1999-- Standard & Poor's today assigned its single-'B'-pi financial strength rating to American Chambers Life Insurance Co. (ACLIC), provider of small group accident and health insurance, which is licensed and operates in 38 states. ACLIC had $14 million in total adjusted capital at year-end 1998, and is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of United Chambers Administrators, Inc., (UCAI UCAI Unione Cattolica Artisti Italiani (Catholic Union of Italian Artists) ), the sponsor of a large multiple employer trust. Both ACLIC and UCAI are headquartered in Naperville, Ill., and were founded in 1969. The following factors were incorporated in the rating: -- ACLIC's liquidity profile is very good as indicated by Standard & Poor's liquidity ratio of more than 300%. The insurer maintains a liquid investment portfolio of high grade and mostly short-term bonds and cash. Additionally, at year- end 1998, about 20% of total investments were in investment real estate. -- Although 99% of ALIC's premiums are concentrated in small group accident and health insurance, the premiums are geographically well diversified. This is partially attributable to UCAI's affiliation with about 3,500 Chambers of Commerce nationwide. -- Operating performance for ACLIC is weak with return on average assets averaging negative 0.22% from 1993-1998. -- ACLIC's capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. is weak as indicated by Standard & Poor's capital adequacy ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. of 47%. ACLIC appears to be undercapitalized Undercapitalized A business has insufficient capital to carry out its normal functions. undercapitalized Of, relating to, or being a firm that has insufficient long-term equity to support its assets. due to the significant business volume it writes (group accident and health premiums were $113 million in 1998) relative to its capital base. 'Pi' ratings, denoted with a pi subscript (1) In word processing and scientific notation, a digit or symbol that appears below the line; for example, H2O, the symbol for water. Contrast with superscript. (2) In programming, a method for referencing data in a table. , are insurer financial strength ratings based on an analysis of an insurer's published financial information and additional information in the public domain. They do not reflect in-depth meetings with an insurer's management and are therefore based on less comprehensive information than ratings without a pi subscript. Pi ratings are reviewed annually based on a new year's financial statements, but may be reviewed on an interim basis if a major event that may affect the insurer's financial security occurs. Ratings with a pi subscript are not subject to potential CreditWatch listings. Ratings with a pi subscript generally are not modified with 'plus' or 'minus' designations. However, such designations may be assigned when the insurer's financial strength rating is constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by sovereign risk Sovereign Risk The risk that a foreign central bank will alter its foreign-exchange regulations thereby significantly reducing or completely nulling the value of foreign-exchange contracts. or the credit quality of a parent company or affiliated group, Standard & Poor's said.---CreditWire. |
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