A.M. Best Revises Outlook to Stable for National States Insurance Company

Business Wire, Jan 18, 2008

OLDWICK, N.J. -- A.M. Best Co. has revised the outlook for the financial strength rating (FSR) to stable from negative for National States Insurance Company (National States) (St. Louis, MO). A.M. Best also has affirmed the FSR of B- (Fair) and assigned an issuer credit rating (ICR) of "bb-" to National States. The outlook for the ICR is stable.

National States has taken a number of corrective actions, including increasing the amount of reinsurance on its life products to offset new business strain on its capital; implementing rate increases on its senior health business; and discontinuing its graded benefit life products segment. These actions, combined with lower incurred life and health benefits and a lower number of inforce policies, have resulted in profitable operations over the past two years. National States' capital position has reported some growth, primarily as a result of net income.

A.M. Best believes National States will continue to be challenged in managing its run-off South Florida home health care block and trying to grow its Medicare supplement business near term. Additionally, while improved, National States still maintains a relatively modest risk-adjusted capital position.

For 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.