OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has downgraded the financial strength rating to A- (Excellent) from A (Excellent) and the issuer credit rating to “a-” from “a” of OHIC Insurance Company (OHIC) (Columbus, OH). The outlook for all ratings is stable.
The rating downgrades reflect the commutation of the 90% quota share reinsurance contract that OHIC had in place with ultimate parent company The Doctors Company, an Interinsurance Exchange (the Exchange). OHIC was acquired by the Exchange in 2007, and shortly thereafter in 2008, the company renewed nearly its entire physician book of business on the paper of the Exchange. Late in 2011, OHIC began renewing its remaining hospital and health care facility business on Exchange paper. During the first quarter of 2013, the quota share contract was commuted, with the commutation receiving the necessary regulatory approval. Based on these actions, it is expected that as of October 31, 2013, there will be no in-force business left in the company.
All of these factors lessen the business profile of the company; however, A.M. Best fully expects the Exchange to continue providing support for OHIC as needed. The latest evidence of this support was the contribution of $20.0 million in capital to OHIC during the first quarter of 2013 to help support the settlement and adjudication of the company’s remaining outstanding loss reserves, which increased considerably in 2012.
The ratings of the Exchange and all other rating units related to The Exchange have been affirmed at this time. The outlook for all ratings is stable.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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