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A.M. Best Comments on Credit Ratings of The Education Benevolent Society Incorporated


A.M. Best has commented that the Financial Strength Rating of B++
(Good) and the Long-Term Issuer Credit Rating of "bbb" of The Education
Benevolent Society Incorporated (EBS) (New Zealand), remain unchanged
following an announcement that it plans to enter into an arrangement
with Union Medical Benefits Society Limited (UniMed) (New Zealand),
under which UniMed will take over EBS's insurance operations as of
January 1, 2019. EBS subscribers were notified of the planned change
during July 2018 and until the transaction is completed, A.M. Best
expects EBS to continue to operate and service its policyholders in a
business-as-usual manner.

The transaction is expected to result in a portfolio transfer of EBS's
existing insurance obligations to UniMed, as well as future medical
insurance protection for EBS's subscribers being underwritten by UniMed.
The transaction has received preliminary approval from each companies'
board of directors; however, it remains subject to the finalization of a
mutually acceptable agreement. The transaction also requires approval by
the Reserve Bank of New Zealand and this application is expected to be
submitted shortly.

EBS has cited limited growth opportunities, the cost and risks
associated with necessary technology investments, and its high cost base
as key drivers for the decision to change its business model. Upon
completion of the proposed transaction, EBS will no longer operate as an
insurance company and will become a marketing organization.
Consequently, the company is expected to relinquish its insurance

Ratings are communicated to rated entities prior to publication.
Unless stated otherwise, the ratings were not amended subsequent to that

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
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings
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