AM Best Upgrades Credit Ratings of California Healthcare Insurance Company, Inc., A Risk Retention Group
AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to "a" (Excellent) from "a-" (Excellent) of California Healthcare Insurance Company, Inc., A Risk Retention Group (CHI) (headquartered in Roseville, CA). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect CHI's balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The rating upgrades reflect a revision in the operating performance assessment due to favorable trends in CHI's performance relative to peers in the medical professional liability (MPL) insurance industry. Underwriting results have been consistently profitable and exhibited low volatility despite broader deterioration across the MPL market. Premium rebates are distributed to insureds based on CHI's financial performance, at the discretion of the board of directors. Rebates have proven to be an effective policyholder retention tool, through rewarding member-owners for loyalty and favorable loss experience. Since rebates effectively reduce reported net premiums written and earned, AM Best considers CHI's operating performance before and after rebates, both of which support the strong operating performance assessment. CHI's business profile continues to be limited, primarily due to product and geographic concentration in MPL insuance for independent hospitals and other health care entities throughout California.
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