Harvard Pilgrim withdraws from A.M. Best reviews

Harvard Pilgrim Health Care Inc. has requested that it no longer be reviewed by the credit ratings review agency A.M. Best.”Harvard Pilgrim has decided, as part of our ongoing efforts to reduce unnecessary cost and administrative burdens, to no longer continue the A.M. Best rating process,” said Sharon Torgerson, spokesperson for the insurer. “They did recently affirmed our rating, but after that, they will categorize use as ‘nr,’ or ‘not formally followed.'”Torgerson said Harvard Pilgrim will continue to be rated by Moody’s and Weiss Ratings.According to a release from the ratings firm, A.M. Best has affirmed a financial strength rating of “B++” (good) and an issuer credit rating of “bbb” (good) for Harvard Pilgrim Health Care and its two subsidiaries, Harvard Pilgrim Health Care of New England Inc. and HPHC Insurance Company Inc. – with all companies given a stable outlook.Best said that, while its ratings “reflect the group’s favorable market position, steady premium development and adequate overall capitalization,” it had some concerns about Harvard Pilgrim’s affiliates, saying “capitalization at HPHC’s two affiliates is considered low for the ratings based on their current level of business and investment risks.”The ratings agency also said it was concerned “about both the level of growth at HPHCIC and the continuation of operating losses at HPHCNE. While HPHC did contribute capital in 2009 to support growth at HPHCNE, no capital contribution was received by this affiliate in 2010.”Last month, Harvard Pilgrim, based in Wellesley, Mass., and Tufts Health Plan, headquartered in Watertown, Mass., had announced plans to explore a possible merger.Harvard Pilgrim has more than 120,000 subscribers in New Hampshire, for a total of about 1 million members in Massachusetts, New Hampshire and Maine, with the overwhelming majority in the Bay State, making it that state’s second-largest insurer.Tufts has 730,000 members in Massachusetts and 10,000 in Rhode Island. Tufts left the New Hampshire market in 1999. – CINDY KIBBE/NEW HAMPSHIRE BUSINESS REVIEW