A.M. Best Downgrades Ratings of Penn Treaty Network America Insurance Company and Penn Treaty American Corporation

Business Wire, Jan 8, 2009

OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength rating (FSR) to E (Under Regulatory Supervision) from D (Poor) and issuer credit ratings (ICR) to "rs" from "c" of Penn Treaty Network America Insurance Company (Penn Treaty Network America) and American Network Insurance Company (American Network). A.M. Best also has downgraded the ICR to "d" from "c" of the holding company, Penn Treaty American Corporation (Penn Treaty) (NYSE:PTA).

Concurrently, A.M. Best has affirmed the FSR of D (Poor) and ICR of "c" of American Independent Network Insurance Company of New York (American Independent Network) (New York, NY). The outlook for American Independent Network's ratings is negative. All companies are domiciled in Allentown, PA, except where specified and are subsidiaries of Penn Treaty.

The rating actions on Penn Treaty Network America and American Network are in response to their entrance into voluntary rehabilitation by their domiciliary state of Pennsylvania on January 6, 2009.

Penn Treaty has announced that it has entered into a non-binding letter of intent to sell a majority interest in American Network and its business operations including substantially all of the company's long-term care insurance policies issued after December 31, 2001 (NewCo). Penn Treaty Network America will retain ownership of all long-term care insurance policies issued prior to 2002 (OldCo). Should a definitive agreement be signed for the sale of American Network, A.M. Best would re-evaluate its ratings. American Independent Network is not part of the sale agreement and would become a direct subsidiary of Penn Treaty Network America prior to any sale.

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.