NEW YORK--(BUSINESS WIRE)--June 21, 2004--The North Carolina Department of Insurance has proposed legislation that could require Blue Cross Blue Shield of North Carolina (BCBSNC; A+/Stable/--) to return some of its surplus to consumers because of the company's strong risk-based-capital position. Standard & Poor's is not taking any rating action on BCBSNC at this time. However, Standard & Poor's is monitoring this proposal. If the bill passes in its current form or an alternative form, Standard & Poor's will determine if there are any negative implications for the BCBSNC ratings.
This proposal is similar to ones in Pennsylvania and Rhode Island. It differs in that any surplus above an indicated level will immediately be deemed inappropriate and would need to be corrected within a short timeframe. As it is currently written, this proposed legislation could have a negative impact on the BCBSNC rating if it becomes law.
The current ratings on BCBSNC are based on the company's extremely strong operating performance, membership growth, leading market share in North Carolina, and very strong capitalization.
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