A.M. Best places medical life's rating underreview after the insurer's parent is put...

OLDWICK, N.J.--(BUSINESS WIRE)--March 18, 1997--Effective immediately, A.M. Best Co. has placed the "A-" (Excellent) rating of Medical Life Insurance Co., Cleveland, Ohio, under review with negative implications.

The rating action reflects the weak financial position of Medical

Life's parent company, Blue Cross & Blue Shield Mutual of Ohio (BCBSO) and the ownership uncertainties surrounding Medical Life after the Ohio Department of Insurance placed a supervisory order on BCBSO. The order follows BCBSO's reported $95 million loss in 1996, which reduced reserves below minimum required state levels.

Additionally, in an announcement on March 12, 1997, BCBSO was notified that the Superintendent of Insurance intends to disapprove the proposed sale of BCBSO to Columbia/HCA Healthcare Corp. Moreover, the Ohio Department of Insurance is attempting to resolve management control issues at BCBSO. Management disruption last week resulted in uncertainty regarding authority and control of BCBSO.

The supervisory order puts the state Department of Insurance in control of BCBSO, with state regulators on site to ensure that the company continues to run effectively. The order means BCBSO can take no substantive actions without prior written consent of the Superintendent of Insurance.

This rating action follows the lowering of Medical Life's rating to "A-" (Excellent) in December, 1996 based primarily on the poor earnings' performance of its parent company in recent years.

A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source.

CONTACT: Jeffrey Dunsavage

(908) 439-2200, ext. 5618

http://www.ambest.com