Best Assigns Rating for AHS Insurance Co.

March 15, 2005

A.M. Best Co. has assigned a financial strength rating of B++ (Very Good) to AHS Insurance Company Ltd. (AHS) (Cayman Islands). The rating outlook is stable.

The rating reflects AHS’s very good capitalization, experienced management team and sound underwriting and risk management programs.

Partially offsetting these positive rating factors are AHS’s limited business scope and high retention levels. Additional factors considered in this rating include the explicit support of the captive’s parent, Atlantic Health System Inc., and the strategic importance of AHS within this system.

AHS’s risk management program uses a proactive approach for identifying, minimizing and managing claims. The program’s effectiveness is continuously monitored, and adjustments are made when necessary.

The rating also considers the important role AHS serves in providing professional and general liability insurance for Atlantic Health System Inc.

The rating of AHS is further supported by the financial strength of the parent and the largest subsidiary within the system, AHS Hospital Corporation. The hospital corporation has strong liquidity with adequate days cash on hand and a low debt-to-capitalization ratio. In addition, the hospital corporation has a strong debt service coverage and a favorable payer mix. Earnings have been positive for several years, though on a declining trend.

A.M. Best believes the rating support will continue given the persistence of current levels of earnings and liquidity.

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