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A.M. Best Upgrades Ratings of North Coast Life Insurance Company
[January 22, 2013]

A.M. Best Upgrades Ratings of North Coast Life Insurance Company

OLDWICK, N.J. --(Business Wire)--

A.M. Best Co. has upgraded the financial strength rating to B- (Fair) from C+ (Marginal) and issuer credit rating to "bb-" from "b-" of North Coast Life Insurance Company (North Coast) (Spokane, WA). Both ratings have been removed from under review with positive implications and assigned a stable outlook. These rating actions follow the recent acquisition of North Coast by Government Personnel Mutual Life Insurance Company (GPM) effective December 31, 2012.

The rating upgrades reflect the improvement in North Coast's capitalization, balance sheet quality and the potential benefits of the acquisition by GPM. North Coast's surplus increased by $2 million following the merger of a GPM subsidiary into North Coast. The balance sheet quality has improved through the redemption of the North Coast Life preferred stock, the aforementioned capital contribution and the lower below investment grade bond exposure, which historically had been elevated. A.M. Best notes that North Coast and GPM previously were strategic partners, as they have had a reinsurance agreement in place since 2008. NorthCoast policyholders should benefit from the integration into a stronger organization, as well as expanded marketing and distribution opportunities as part of GPM.

Offsetting rating factors include the still modest level of North Coast's capital position, both from an absolute and risk-adjusted basis, its susceptibility to spread compression in its interest sensitive business segments as well as its limited business profile and scope of operations.

Positive rating movement may occur if North Coast's risk-adjusted capitalization levels continue to improve either through additional capital contributions or organic earnings growth. Other factors that may drive positive rating actions include further integration with North Coast's new parent or expansion of its business profile. Negative rating actions could result if risk-adjusted capitalization levels decline materially or there is a significant deterioration in the company's operating performance.

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. Key criteria utilized include: "Understanding BCAR for Life/Health Insurers" and "Rating Members of Insurance Groups." Best's Credit Rating Methodology can be found at

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit

Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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