S&P Affirms CIGNA HealthCare of CA 'Api'Rtg.

NEW YORK--(BUSINESS WIRE)--Oct. 6, 1999--

Standard & Poor's today affirmed its single-'Api' financial strength rating on CIGNA HealthCare of California Inc., reflecting the health maintenance organization's (HMO) strong capitalization, good earnings profile, good liquidity, offset by a

CIGNA HealthCare of California, (Cigna) based in Glendale, Calif. and a wholly owned subsidiary of CIGNA Health Corp., is indirectly owned by CIGNA Corp. and a licensed HMO in Calif.

Cigna's risk-based capitalization is strong, as reflected by a Standard & Poor's capital adequacy ratio of 156.6%. Total statutory capital has declined in prior years, primarily due to upstreaming dividends of $15 and $21 million in 1997 and 1996, respectively. Cigna's operating performance is good, with improved underwriting performance in the past two years; its return-on-revenue averaged 3.2% in this period. Cigna's liquidity is good, based on the high quality of its liquid assets to meet its short-term obligations. 'Pi' ratings, denoted with a 'pi' subscript, are insurer financial strength ratings based on an analysis of an insurer's published financial information and additional information in the public domain. They do not reflect in-depth meetings with an insurer's management and are therefore based on less comprehensive information than ratings without a 'pi' subscript. 'Pi' ratings are reviewed annually based on a new year's financial statements, but may be reviewed on an interim basis if a major event that may affect the insurer's financial security occurs. Ratings with a pi subscript are not subject to potential CreditWatch listings. Ratings with a 'pi' subscript generally are not modified with 'plus' or 'minus' designations. However, such designations may be assigned when the insurer's financial strength rating is constrained by sovereign risk or the credit quality of a parent company or affiliated group, Standard & Poor's said. -- CreditWire