Oldwick, New Jersey, March 15, 2024–(Business Wire)–AM best downgraded Moda Health Plan, Inc.'s long-term issuer credit rating (long-term ICR) from 'bb+' (average) to 'bb' (average) and maintained its financial strength rating (FSR) at B (average). . (Moda Health). At the same time, AM Best downgraded Oregon Dental Services (ODS)'s FSR from B+ (good) to B (fair) and long-term ICR from 'bbb-' (good) to 'bb+' (fair). Additionally, AM Best has placed both of these ratings under review with negative connotations. Both companies are based in Portland, Oregon.
Additionally, AM Best withdrew these ratings after companies requested not to participate in AM Best's interactive rating process. These ratings serve as AM Best's final rating updates for these companies.
This rating reflects Moda Health's balance sheet strength, marginal operating performance, limited business profile, and adequate enterprise risk management (ERM), which AM Best assesses as weak.
Prior to the exit, the negative impact review and downgrade of Moda Health's long-term ICR reflects the lack of improvement in risk-adjusted capital as measured by the Best Capital Adequacy Ratio (BCAR). Ta. In 2023, the Company's capital decreased due to significant net losses and surplus repayments, partially offset by unrealized profits and investments from parent company ODS. AM Best remains concerned about the level of total risk-adjusted capital.
This rating reflects ODS' balance sheet strength, which AM Best assesses as adequate, as well as an adequate operating performance, limited business profile, and adequate ERM.
ODS's rating under review and downgrade with negative impact primarily reflects a reduction in risk-adjusted capital as measured by BCAR. Additionally, ODS' financial leverage remains moderately high, which AM Best feels limits its financial flexibility.
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