OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co. has placed the financial strength rating (FSR) of
A- (Excellent) and issuer credit rating (ICR) of “a-” of Eastern Life
and Health Insurance Company(ELH) (Lancaster, PA) under review with
negative implications following the announcement that its parent, Eastern
Insurance Holdings, Inc. (EIHI) (NASDAQ: EIHI), has signed a
definitive agreement to sell ELH to Security Life Insurance Company
of America (Security Life). Consideration for the transaction will
be equal to ELH’s GAAP shareholders’ equity position, plus $250,000.
Additionally, there will be a three-year, $1.75 million promissory note
payable to EIHI from Security Life.
The ratings of ELH will remain under review pending further evaluation
of the transaction by A.M. Best and all customary regulatory approvals.
Upon completion of the transaction, ELH is expected to be merged into
Security Life. Over the past few years, ELH’s ratings have been enhanced
by a financial guarantee that has been provided by EIHI. The financial
guarantee will remain in place until the close of the transaction, which
is projected to be completed by mid-summer 2010.
The FSR of A- (Excellent) and ICRs of “a-” of Eastern Alliance
Insurance Group and its property/casualty members, as well as the
ICR of “bbb-”of EIHI, all of which currently have a positive outlook,
are unchanged.
For Best’s Credit Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings, including
any additional methodologies and factors that may have been considered,
can be found at www.ambest.com/ratings/methodology.
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.
Source: A.M. Best Co.
Contact:
A.M. Best Co.
Analysts:
Kathryn Steffanelli,
908-439-2200, ext. 5063
kathryn.steffanelli@ambest.com
Carl
Austin, 908-439-2200, ext. 5500
carl.austin@ambest.com
or
Public
Relations:
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
Rachelle
Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com