A.M. Best Comments on Credit Ratings of The Doctors Company, An Interinsurance Exchange and Its Subsidiaries
OLDWICK, N.J.--(BUSINESS WIRE)--Nov 30, 2018--A.M. Best has commented that the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a+” of The Doctors Company, An Interinsurance Exchange (TDCIE) and its rated subsidiaries, collectively referred to as the Doctors Company Insurance Group (the Group), remain unchanged following the announcement that TDCIE intends to acquire Hospitals Insurance Company, Inc. (HICI) (New York).
The Group specializes in writing medical professional liability (MPL) insurance for approximately 80,000 physician members, and was the largest physician-owned and second-largest MPL insurance provider in the United States based on 2017 direct premium written. HICI is a wholly owned subsidiary of FFH Hospitals Trust (1987) (FFHHT), the grantors and beneficiaries of FFHHT being Maimondies Medical Center, Montefiore Medical Center and The Mount Sinai Hospital, collectively referred to as the hospitals. As such, the hospitals are the indirect owners of HICI. HICI provides base hospital MPL, hospital excess and physician professional liability to physicians employed or contracted with the hospitals in New York.
The acquisition, which has an estimated cost of $650 million, includes FOJP Services Corporation (FOJP), an HICI-affiliated company providing insurance risk management advisory services to leading academic hospitals, long-term care facilities, and social service agencies in the metropolitan New York area. In addition, FOJP manages the hospitals’ self-insured trusts for high excess coverage.
By acquiring HICI, TDCIE will significantly increase its presence in New York, and provide it with the opportunity for further growth. Funding for the acquisition, which is expected to come out of existing assets, is expected to weaken the Group’s risk-adjusted capitalization and increase underwriting leverage. However, A.M. Best expects the Group’s risk-adjusted capitalization to remain at the strongest level and will not put pressure on the Credit Rating (ratings).
The closing of the transaction is expected to be completed toward the latter half of 2019, pending regulatory approvals by California and New York.
The following are the members of the Doctors Company Insurance Group;The Doctors Company, An Interinsurance Exchange TDC National Assurance Company TDC Specialty Insurance Company TDC Special Risks Insurance Company The Doctors Company Risk Retention Group, a Reciprocal Exchange
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view .
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KEYWORD: UNITED STATES EUROPE NORTH AMERICA NEW JERSEY
INDUSTRY KEYWORD: PROFESSIONAL SERVICES FINANCE INSURANCE
SOURCE: A.M. Best
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PUB: 11/30/2018 02:09 PM/DISC: 11/30/2018 02:10 PM