A.M. Best Co. announced that it has downgraded the financial strength rating to “D” (Poor) from “C+” (Marginal) of Doctors Benefit Insurance Company Ltd., which is located in St. Michaels, Barbados. The rating outlook is stable.
“This rating action reflects recent findings that are likely to have a negative impact on Doctors Benefit’s operations and, in A.M. Best’s opinion, could ultimately threaten the future viability of the company,” said the bulletin.
“An Internal Revenue Service audit and other investigations are currently being conducted regarding Doctors Benefit,” Best explained. “These investigations are mainly focused on the company’s loosely-affiliated core distribution organization, xelan. All of Doctors Benefit’s policies are derived from xelan. In addition to the investigations, a number of xelan subsidiaries have recently filed for Chapter 11 bankruptcy, calling into question xelan’s future viability, as well as the ability of Doctors Benefit to produce additional business going forward.”
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