Market Overview

A.M. Best Upgrades Issuer Credit Rating of The Chesapeake Life Insurance Company

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A.M. Best has upgraded the Long-Term Issuer Credit Rating
(Long-Term ICR) to "bbb+" from "bbb" and affirmed the Financial Strength
Rating of B++ (Good) of The Chesapeake Life Insurance Company
(Chesapeake) (Oklahoma City, OK), the core insurance subsidiary of HealthMarkets,
Inc.
(HealthMarkets) (headquartered in North Richland Hills, TX).
Additionally, A.M. Best has upgraded the Long-Term ICR to "bb+" from
"bb" of HealthMarkets. The outlook of these Credit Ratings (ratings) is
stable.

The ratings reflect Chesapeake's balance sheet strength, which A.M. Best
categorizes as very strong, as well as its adequate operating
performance, limited business profile and marginal enterprise risk
management.

The rating upgrades reflect Chesapeake's risk-adjusted capital being at
the strongest level, as measured by Best's Capital Adequacy Ratio,
continued favorable operating results generating capital growth and its
role as the sole writer of new insurance premium for HealthMarkets. The
growth of HealthMarkets Insurance Agency, Inc., Chesapeake's affiliated
company and distribution channel, combined with the growth of
third-party agency distribution, has resulted in Chesapeake's continued
premium growth in recent years. In addition, Chesapeake's supplemental
insurance portfolio branded as SureBridge has a diverse suite of
supplemental health products and the organization previously exited
products regulated by the Patient Protection and Affordable Care Act.

While a sizable portion of Chesapeake's business is generated by
HealthMarkets Insurance Agency, Inc., the amount of business produced by
third-party distributors continues to increase. In addition,
Chesapeake's level of cash and short-term investments represent
approximately one-quarter of invested assets, which drives liquidity
measures but suppressed investment yields. Furthermore, A.M. Best notes
that HealthMarkets' unadjusted financial leverage remains elevated.

This press release relates to Credit Ratings that have been published
on A.M. Best's website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best's
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases
.

A.M. Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
www.ambest.com
for more information
.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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