A.M. Best Assigns Ratings to Group Insurance Trust of the California Society of Certified Public Accountants

Business Wire, May 16, 2008

OLDWICK, N.J. -- A.M. Best Co. has assigned a financial strength rating of B (Good) and issuer credit rating of "bbb" to Group Insurance Trust of the California Society of Certified Public Accountants (The Trust) (Redwood City, CA), a sponsored Trust of the California Society of CPAs (CalCPA). The outlook for both ratings is stable.

The ratings assigned to The Trust primarily reflect its synergy with CalCPA, favorable level of capitalization and positive operating performance. The Trust's risk-adjusted capital position, as measured by Best's Capital Adequacy Ratio (BCAR), remains favorable. The Trust has built its capital position based upon its historically positive operating results, and its strategy is to provide medical, dental, vision and related health and welfare plans designed to meet the needs of CalCPA members, their employees and dependents.

Offsetting rating factors include the company's limited business profile, claims fluctuations and equity exposure in its investment portfolio. Due to its strategy of marketing to a specific professional organization, The Trust will continue to maintain a high geographic concentration risk as evidenced by the dominant percentage of premiums written in California. The Trust's business profile is subject to future claims volatility due to an aging population, which may impact its loss ratio over time. However, A.M. Best notes that The Trust's claims experience has remained within an acceptable range and should remain manageable due to the implementation of a stop-loss program.

Additionally, The Trust maintains significant investments in equity type mutual funds relative to its net change in assets. Although these investments have generally performed well and provide liquidity to the organization, the valuations can be volatile in uncertain economic environments.

The Trust was formed in 1959 to provide welfare benefits at group rates to employees and dependents of eligible employer members of CalCPA.

The Trust obtained its license in 1997 and is recognized as a multiple employer welfare arrangement (MEWA) by the California Department of Insurance (CADOI). Only a handful of MEWAs currently exist in California; the Trust is regulated by the CADOI and is also subject to federal law.

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.