Insurance Company Failures Up 30% In 2000
HMO Failures Down 22%

PALM BEACH GARDENS, Fla., January 8, 2001 - In the face of a slowing economy and stiff competition, 35 insurance companies failed in 2000, a 30% increase over the 27 failures recorded in 1999, according to Weiss Ratings, Inc., the only independent provider of ratings and analyses on the insurance industry. Conversely, the number of HMO failures declined for the first time in five years, dropping 22% to 18 in 2000 from 23 in 1999.

"Increasing financial weakness in the property/casualty sector of the industry was the driving force behind the large jump in insurer failures. And there's bound to be more bloodletting in this sector as the weaker companies are further pounded by a slowing economy," commented Martin D. Weiss, Ph.D., chairman of Weiss Ratings. Property/casualty insurers represented a disproportionate 27 of the 35 insurance company failures last year.

All told, there were 53 insurance company and HMO failures in 2000. Among these, Weiss had issued financial safety ratings on 47, giving 72% of those rated a grade of D+ ("Weak") or lower. Weiss had rated the remaining 28% in the C ("Fair") range. The largest failed companies were:

Company Co. Type Total Assets
($ Mil)
Date of
Fremont Indemnity Company (Cal.) P&C 1,314.3 11/27/00
Harvard Pilgrim Health Care Inc. (Mass.) HMO 701.9 1/04/00
Fremont Industrial Indemnity Co. (Cal.) P&C 594.9 11/27/00
Fremont Casualty Ins. Co. (Ill.) P&C 557.5 11/27/00
California Compensation Insurance Co. (Cal.) P&C 506.4 3/03/00

To avoid failures such as these, Dr. Weiss advises businesses and consumers to monitor the financial health of their insurance company or HMO 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, reserve adequacy, quality of investments, liquidity, and stability.

Weiss issues safety ratings on over 16,000 financial institutions, including life and health insurers, property and casualty insurers, HMOs, Blue Cross Blue Shield plans, 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 can purchase a rating and summary analysis for as little as $7.95 through the Weiss Ratings web site at www.WeissRatings.com. Ratings are also available by phone (1-800-289-9222) starting at $15.

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Insurance Company Failures in 2000

Company Co. Type Total Assets
($ Mil)
Date of
Weiss Rating
Prior to Failure
Fremont Indemnity Company (Cal.) P&C 1,314.3 11/27/00 C- (Fair)
Fremont Industrial Indemnity Company (Cal.) P&C 594.9 11/27/00 C- (Fair)
Fremont Casualty Insurance Company (Ill.) P&C 557.5 11/27/00 C- (Fair)
California Compensation Insurance Co. (Cal.) P&C 506.4 3/3/00 C (Fair)
Fremont Compensation Insurance Company (Cal.) P&C 223.3 11/27/00 U (Unrated)
Superior National Insurance Company (Cal.) P&C 222.1 3/3/00 D (Weak)
Lumber Mutual Insurance Company (Mass.) P&C 222.0 11/1/00 C (Fair)
Trust Insurance Company (Mass.) P&C 151.2 2/10/00 C- (Fair)
Credit General Insurance Company (Ohio) P&C 101.3 11/6/00 D (Weak)
Superior Pacific Casualty Company (Cal.) P&C 93.4 3/3/00 D (Weak)
International Indemnity Company (Ga.) P&C 61.9 11/7/00 D+ (Weak)
LMI Commercial Insurance Company (Ohio) P&C 50.4 3/20/00 E+ (Very Weak)
SEACO Insurance Company (Mass.) P&C 37.7 11/1/00 C- (Fair)
Union American Insurance Company (Fla.) P&C 37.7 3/10/00 D (Weak)
Fremont Pacific Insurance Company (Cal.) P&C 37.4 11/27/00 C- (Fair)
American Chambers Life Insurance (Ohio) L&H 35.1 2/29/00 E+ (Very Weak)
North American Lumber Insurance Co. (Mass.) P&C 30.9 11/1/00 C- (Fair)
Acceleration National Insurance Company (Ohio) P&C 28.0 5/1/00 D (Weak)
Alliance General Insurance Company (Ill.) P&C 26.9 1/7/00 E (Very Weak)
Hamilton Insurance Company (Penn.) P&C 21.3 8/3/00 D (Weak)
Trust Assurance Company (Mass.) P&C 20.8 2/10/00 D+ (Weak)
New England Fidelity Insurance Company (Mass.) P&C 17.8 11/15/00 D (Weak)
Commercial Compensation Insurance Co (N.Y.) P&C 15.1 3/3/00 D (Weak)
Combined Benefit Life Insurance Co (Cal.) P&C 15.0 3/3/00 C (Fair)
Illinois Healthcare Insurance Co (Ill.) L&H 13.0 6/30/00 D- (Weak)
Forest Products Insurance Exchange (Minn.) P&C 8.7 11/2/00 C (Fair)
American Investors (Ark.) L&H 8.5 7/11/00 E (Very Weak)
Bankers Commercial Life Insurance Co (Tex.) L&H 8.3 5/3/00 E- (Very Weak)
Unistar Insurance Co (Tex.) P&C 7.2 5/22/00 D- (Weak)
Credit General Indemnity Co (Ohio) P&C 7.0 11/6/00 D (Weak)
Benefits Life Insurance Co (Tex) L&H 5.7 8/16/00 E (Very Weak)
Premiere Auto Insurance Co (Penn.) P&C 5.1 8/31/00 D- (Weak)
American Unified Life and Health Ins Co (Ill.) L&H 3.8 7/27/00 D (Weak)
Medical Community Insurance Co (Tex.) L&H 2.2 8/30/00 E+ (Very Weak)
Agora Syndicate Inc. (Ill.) P&C n/a 9/14/00 U (Unrated)

L&H = Life and Health Insurer
P&C = Property and Casualty Insurer
n/a = Not Available

HMO Failures in 2000

Company Total Assets
($ Mil)
Date of
Weiss Rating
Prior to Failure
Harvard Pilgrim Health Care Inc. (Mass.) 701.9 1/04/00 D+ (Weak)
Pilgrim Health Care Inc. (Mass.) 152.7 1/04/00 D+ (Weak)
HIP Health Plan of Florida (Fla.) 64.3 7/19/00 D- (Weak)
Family Health Plan Cooperative (Wis.) 61.7 10/16/00 D (Weak)
American Healthcare Providers (Ill.) 23.2 2/2/00 E+ (Very Weak)
Total Health Care Inc (Ohio) 18.0 7/26/00 C- (Fair)
Sunstar Healthplan (Fla.) 17.9 2/1/00 E (Very Weak)
American HMO Inc (Ill.) 14.8 5/11/00 D (Weak)
Advantage Care Inc (Ky.) 12.5 11/8/00 D- (Weak)
Harvard Pilgrim Healthcare of New England (Mass.) 12.3 1/04/00 C- (Fair)
Beacon Health Plans, Inc. (Fla.) 8.5 1/20/00 E- (Very Weak)
Mississippi Managed Care Network, Inc. (Miss.) 5.5 1/28/00 D- (Weak)
Directcare Inc. (Ala.) 4.3 6/15/00 E- (Very Weak)
American Healthcare Trust, Inc. (Tenn.) 3.0 1/21/00 D (Weak)
American Preferred Provider Plan - Mid Atlantic (D.C.) n/a 4/26/00 U (Unrated)
Harvard University Group Health Plan (Mass.) n/a 1/04/00 U (Unrated)
MidSouth Health Plan Inc. (Tenn.) n/a 6/12/00 U (Unrated)
Wellcare Health Plans of Texas (Tex.) n/a 1/25/00 U (Unrated)

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