A.M. Best Co. has placed the financial strength ratings of B+
(Good) and issuer credit ratings of “bbb-” of the subsidiaries of Health
Net of the Northeast, Inc., which is a subsidiary of Health Net, Inc.
(Health Net) (Delaware) [NYSE: HNT], under review with positive
implications, as UnitedHealthcare, Inc. (UnitedHealthcare) (Delaware), a
subsidiary of the ultimate parent, UnitedHealth Group, Inc.
(UnitedHealth Group) (Minnetonka, MN), has agreed to acquire these
entities. The entities included in this transaction are Health Net of
Connecticut, Inc., Health Net of New Jersey, Inc., Health
Net of New York, Inc., and Health Net Insurance of New York, Inc. The
remaining ratings for Health Net and its other subsidiaries are
unchanged.
The under review with positive implications reflects the financial
strength of UnitedHealth Group, compared with Health Net.
Health Net will work with UnitedHealthcare to renew the customers
currently enrolled in the northeast plans as they reach their annual
renewal dates. Additionally, Health Net has entered into an agreement
with UnitedHealthcare to service these customers through a post closing
transition period.
The transaction is subject to regulatory approvals and is expected to
close by July 2010. Should the transaction not be completed, the ratings
of the subsidiaries of Health Net of the Northeast, Inc. would likely be
downgraded due to the lack of strategic importance to Health Net.
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.
