OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has removed from under review with negative implications and affirmed the Financial Strength Rating (FSR) of C++ (Marginal) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “b+” of Health Insurance Plan of Greater New York (HIP), HIP Insurance Company of New York, Group Health Incorporated (GHI) and ConnectiCare, Inc. (ConnectiCare) (Farmington, CT). All companies are subsidiaries of EmblemHealth, Inc. and domiciled in New York, NY, unless otherwise specified. The outlook assigned to the FSR is stable, while the outlook assigned to the Long-Term ICR is negative.
The ratings were placed under review with negative implications on March 10, 2017, due to a sizeable decline in capital at the lead operating company, HIP, and a significant decline in the group’s risk-adjusted capitalization through year-end 2016. As a result of these events, HIP filed a capital plan with New York regulators. The plan resulted in a significant decrease of HIP’s statutory reserve requirement for 2016 and projects the restoration of capital within a three-year period.
Following a review of HIP’s capital restoration plan, A.M. Best remains concerned over the trend of financial losses and whether the various corrective action plans will strengthen future operating results. The negative outlooks reflect the continued uncertainty regarding HIP’s projected operating profitability and capacity to materially improve the level of risk-adjusted capitalization going forward.
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