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A.M. Best Upgrades Ratings of AmFirst Insurance Company and Monitor Life Insurance Company of New York

OLDWICK, N.J., May 23, 2016—A.M. Best has upgraded the financial strength rating (FSR) to A- (Excellent) from B++ (Good) and the issuer credit ratings (ICR) to “a-” from “bbb+” of AmFirst Insurance Company (AmFirst) (Oklahoma City, OK) and its wholly owned subsidiary, Monitor Life Insurance Company of New York (Monitor Life) (Utica, NY). The outlook for each rating is stable. Additionally, A.M. Best has also assigned the FSR of B++ (Good) and the ICR of “bbb+” to TPM Life Insurance Company (TPM) (Lancaster, PA), a wholly owned subsidiary of AmFirst. The outlook assigned to each rating is stable.

The rating upgrades reflect AmFirst and Monitor Life’s premium revenue growth, geographic diversification, favorable operating earnings trend and strong risk-adjusted capital. On a combined basis, AmFirst and Monitor Life have shown favorable long term trends of net premium revenue. The trend is driven primarily by increased sales in its medical gap insurance and dental products through strategic partners. The companies share comprehensive marketing and sales arrangements for business written by its insurance entities and strategic partners, which continue to drive new sales and have also facilitated market expansion, as well as geographic diversification. Pre-tax net operating income for the group has been consistently positive and operating margins from its core product line remain strong driven by top-line growth and stable loss ratios. Capital and surplus growth over the past five years in the low double digits has been achieved through retained earnings as a result of the combined company’s favorable operating results.

Offsetting those favorable rating factors include a somewhat limited product portfolio, high level of acquisition and operating costs and market challenges. In 2015, both AmFirst and Monitor Life discontinued group term life offerings, which was a profitable line of business. The company plans on deploying its capital to other higher margin business. Acquiring new premium from its medical gap product requires high costs driven by first year premium commissions. AmFirst's medical gap product continues to perform favorably and current program rules favor growth of the company’s “excepted benefit” health product; however, there is a risk that changes to the Affordable Care Act (ACA) may adversely affect AmFirst’s long term growth strategies.

The rating assignment of TPM is based on the projected premium trend, favorable projected operating margins and its level of risk-adjusted capitalization, which is offset by TPM’s limited product and geographic diversification.

Positive rating movement on AmFirst’s and Monitor Life’s ratings could occur if AmFirst adds greater diversification of credit worthy product premium and operating earnings while sustaining margin trends. Conversely, negative rating movement could occur if the group experiences a material deterioration in premium and reverses its product diversification gains. Additionally, negative movement may occur if a trend of earnings deterioration is persistent and there is a material decline in risk-adjusted capital.

This press release relates to rating(s) 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.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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