A.M. Best Affirms Ratings of Blue Cross and Blue Shield of Florida, Inc.; Upgrades Ratings of Capital Health Plan

Business Wire, April 28, 2008

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings (FSR) of A (Excellent) and issuer credit ratings (ICR) of "a " of Blue Cross and Blue Shield of Florida, Inc. (BCBSF) and its wholly owned subsidiary, Health Options, Inc. (HOI) (both of Jacksonville, FL). A.M. Best also has affirmed the debt rating of "a-" of $149 million 8.25% surplus notes, due 2011 of BCBSF. The outlook for the aforementioned ratings is stable.

Concurrently, A.M. Best has upgraded the FSR to A (Excellent) from A- (Excellent) and the ICR to "a" from "a-" for Capital Health Plan, Inc. (CHP) (Tallahassee, FL). The outlook has been revised to stable from positive.

BCBSF holds a strategic advantage in the Florida health insurance marketplace. The organization's strong brand recognition, coupled with a drive for both low cost producer position in the market and drive for business diversification has helped to enhance its market penetration, high member retention rates and its dominance in major markets statewide.

Additionally, BCBSF is making inroads in the senior market with selective expansion of Medicare Advantage products. The company strengthened its position in the HSA and high deductible health plan business and continues to focus on delivering customer backed solutions to all members of Florida's diverse population.

Strong revenue development over the past two years, offset by targeted investments in certain market segments has led to a significant decrease in operating performance. This is evidenced by BCBSF's weakened underwriting results on a statutory basis in 2007. However, BCBSF's very favorable capitalization and high overall liquidity positions the organization to withstand the impact of underwriting fluctuation and general economic conditions.

CHP has exhibited strong capital measures and consistently favorable operating performance. The company's position as a market leader in Tallahassee and surrounding counties is bolstered by its mixed model Health Maintenance Organization platform. The strength of CHP's operating results is not only attributable to positive net investment income, supported by consistent revenue growth, but also increasingly favorable underwriting performance that is renowned for low administrative expenses. The ratings also acknowledge the positive relationship the company has with BCBSF, which has 51% control of CHP corporate membership.

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.> Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.