WEISS RATINGS

Financial Scorecard for 1999:
HMO Failures Surge 78%
Insurance Company Failures Rise 5%
Bank Failures Increase 167%

PALM BEACH GARDENS, Fla., January 10, 2000 - Despite a strong economy and a rising stock market, financial failures increased sharply from 1998 to 1999, according to Weiss Ratings, Inc., the only independent provider of ratings and analyses on the financial services industry. HMO failures surged 78% from 9 to 16, insurance company failures rose 5% from 21 to 22, and bank failures increased 167% from 3 to 8 in the same period.

"The two most vulnerable sectors right now are HMOs and banks," commented Martin D. Weiss, Ph.D., chairman of Weiss Ratings. "In the HMO industry, most companies are still losing money on their operations, with yet another major HMO, Harvard Pilgrim Health Care of Massachusetts, going under last week. And in the U.S. banking industry, we've identified 1,356 banks and thrifts harboring problems that we believe warrant ‘Weak' safety ratings. Therefore, the failures witnessed last year could be just the tip of the iceberg."

Among the 38 HMOs and insurance companies that failed in 1999, Weiss had issued financial safety ratings on 30, with 80% of those rated "Weak" or lower. The remaining 15% had been rated "Fair." The largest failed companies were

Company Total
Assets
$ mil)
Date of
Failure
General American Life Insurance Co. (Mo.) 14,084 08/09/99
Integrity Life Insurance Co. (Ohio) 7,829 08/20/99
National Integrity Life Insurance Co. (N.Y.) 1,397 08/08/99
International Financial Services Life Ins. Co. (Mo.) 210 05/11/99

All the eight banks and thrifts that failed last year had received a Weiss Safety Rating of "Weak" or lower. The largest bank failures were:

Company Total
Assets
($Mil)
Date of
Failure
First NB of Keystone, Keystone, W.Va. 1,118 09/01/99
East Texas NB, Marshall, Tex. 112 07/09/99
Pacific Thrift & Loan Co., Woodland Hills, Calif. 118 11/19/99

To avoid future failures, Dr. Weiss advises businesses and consumers to monitor the financial health of their HMO, insurance company, or bank by using safety ratings with a solid track record for accuracy. The Weiss ratings are based on an analysis of a company's capital, profitability, quality of investments, liquidity, and stability.

Weiss issues safety ratings on over 16,000 financial institutions, including HMOs, life and health insurers, Blue Cross Blue Shield plans, property and casualty insurers, banks, and securities brokers. Weiss also rates the risk-adjusted performance of more than 10,000 mutual funds. It is the only major rating agency that receives no compensation from the companies it rates. Revenues are derived strictly from its product sales to consumers, businesses, and libraries.

Consumers needing more information on the financial safety of a specific company may purchase a rating or analysis directly from Weiss for as little as $15 by calling 1-800-289-9222. Weiss' ratings are also available at many public libraries.

1999 HMO Failures


Company Total
Assets
($Mil)
Date of
Failure
Weiss Rating
Prior to Failure
Harvard Pilgrim of New England (R.I.) 83 10/06/99 D+ (Weak)
Sunstar Healthplan (Fla.) 25 12/09/99 E (Very Weak)
Premier Health Care (Ariz.) 13 11/16/99 E (Very Weak)
Xantus Healthplan of Tennessee (Ind.) 11 03/31/99 D- (Weak)
Daymed HMO (Ohio) 9 03/31/99 E- (Very Weak)
NorthMed HMO Inc. (Mich.) 8 08/05/99 E (Very Weak)
Patients Choice, Inc. (La.) 5 09/30/99 U (Unrated)
Wellcare of Connecticut 5 06/03/99 E+ (Very Weak)
Suburban Healthplan, Inc. (Conn.) 4 05/20/99 E- (Very Weak)
Certus Healthcare, LLC (Tex.) 3 08/13/99 E- (Very Weak)
Comprehensive Health Service of Texas 3 02/01/99 C- (Fair)
Greater Pacific HMO (Calif.) 3 06/25/99 D- (Weak)
Horizon Health (Kan.) 3 05/20/99 E- (Very Weak)
Owensboro Community Healthplan (Ky.) 3 10/31/99 D+ (Weak)
Community Healthplan (Kan.) 1 05/03/99 U (Unrated)
American Preferred Provider (N.J.) NA 04/20/99 U (Unrated)

1999 Bank Failures


Company Total
Assets
($Mil)
Date of
Failure
Weiss Rating
Prior to Failure
First NB of Keystone, Keystone, W.Va. 1,118 09/01/99 D+ (Weak)
East Texas NB, Marshall, Tex. 122 07/09/99 E- (Very Weak)
Pacific Thrift & Loan Co., Woodland Hills, Calif. 118 11/19/99 E- (Very Weak)
Golden City Commercial Bank, New York, N.Y. 89 12/10/99 E- (Very Weak)
OceanMark Bank, N. Miami Beach, Fla. 69 07/09/99 E+ (Very Weak)
Peoples NB of Commerce, Miami Beach, Fla. 38 09/10/99 E- (Very Weak)
Zia New Mexico Bank, Tucumcari, N.M. 17 04/23/99 E- (Very Weak)
Victory State Bank, Columbia, S.C. 13 03/26/99 E- (Very Weak)

1999 Insurance Company Failures


Company Co.
Type
Total
Assets
($Mil)
Date of
Failure
Weiss Rating
Prior to Failure
General American Life Insurance Co.(Mo.) L&H 14,084 08/09/99 C+ (Fair)
Integrity Life Insurance Co. (Ohio) L&H 7,829 08/20/99 C (Fair)
National Integrity Life Insurance Co. (N.Y.) L&H 1,397 08/08/99 C (Fair)
International Financial Services Life Ins. Co. (Mo.) L&H 210 05/11/99 D (Weak)
Settlers Life Insurance Co. (Va.) L&H 207 05/14/99 C- (Fair)
First National Life Ins. Co. of America (Miss.) L&H 126 05/10/99 C- (Fair)
Franklin American Life (Tenn.) L&H 76 05/11/99 D (Weak)
Paradigm Insurance Co. (Ind.) P&C 51 10/08/99 D (Weak)
Alpine Insurance Co. (Ill.) P&C 33 01/08/99 E (Very Weak)
Illinois Insurance Co. (Ill.) P&C 31 07/20/99 D (Weak)
Family Guaranty Life Insurance (Miss.) L&H 29 05/10/99 D (Weak)
Franklin Protective Life Insurance Co. (Miss.) L&H 24 05/10/99 D (Weak)
Farmer & Rancher Life Insurance Co. (Okla.) L&H 14 05/12/99 D (Weak)
Fidelity National Insurance Co. (Fla.) P&C 7 03/15/99 E (Very Weak)
Statesman National Life (Tex.) L&H 6 06/01/99 E- (Very Weak)
National Affiliated Investments (La.) L&H 5 06/07/99 E+ (Very Weak)
Global Insurance Co. (Ga.) L&H 4 05/06/99 E (Very Weak)
Peer Insurance RRG Corp. (Hi.) P&C NA 04/06/99 U (Unrated)
Southern United Life (Ala.) L&H NA 02/28/99 U (Unrated)
Life Insurance Co. of Alaska L&H NA 02/12/99 U (Unrated)
Access Insurance Co. (Okla.) L&H NA 08/17/99 U (Unrated)
Eagle Life Insurance Co. (Okla.) L&H NA 08/17/99 U (Unrated)

L&H = Life and Health Insurer
P&C = Property and Casualty Insurer
NA = Not Available


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