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A.M. Best Assigns Ratings to PLICO, Inc.

A.M. Best has assigned a financial strength rating of A++ (Superior) and an issuer credit rating of “aa+” to PLICO, Inc. (PLICO) (Oklahoma City, OK). The outlook assigned to both ratings is stable.

The ratings were assigned following PLICO’s acquisition by MedPro Group Inc. (formerly Medical Protective Corporation). The ratings are based upon the explicit support provided by an affiliate, synergies to be garnered from the transaction, its affiliation with Berkshire Hathaway Inc. (NYSE: BRK.A and BRK.B) and its complementary role to the subsidiaries of MedPro Group Inc. as a provider of medical professional liability insurance in Oklahoma. These rating also consider PLICO’s strong balance sheet, historically favorable operating performance and its market position as one of the leading providers of medical professional liability (MPL) insurance in Oklahoma. Partially offsetting these positive rating factors are the inherent challenges associated with being a single state, mono-line medical professional liability (MPL) insurer, particularly as they relate to price competition, changing market dynamics, potential changes in legislative (tort) reform, increasing loss cost trends and regulatory challenges.

The explicit support provided by MedPro’s lead insurer, The Medical Protective Company (MedPro), was in the form of an intercompany quota share agreement and loss portfolio transfer that was executed following the acquisition of PLICO, Inc. by MedPro Group Inc. These aforementioned agreements, along with implied support in the future, provide the basis for the ratings of MedPro being extended to PLICO.

Upward movement in the ratings may result from upward movement in the ratings of MedPro. Downward rating pressure may result from a diminution of support from MedPro or should MedPro’s ratings be downgraded. Other downward rating drivers include a significant decrease in risk-adjusted capitalization, a sudden shift in strategy by MedPro or from an adverse earnings trend prompted by changes in regulatory, legislative or judicial circumstances in Oklahoma.

All remaining ratings of MedPro and its members are unchanged. (Please see A.M. Best’s press release dated May 27, 2015 for further information.)

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 visit A.M. Best’s Ratings & Criteria Center.

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

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts:

A.M. Best Company
Susan Molineux, (908) 439-2200, ext. 5829
Senior Financial Analyst
susan.molineux@ambest.com
or
Charles M. Huber, (908) 439-2200, ext. 5122
Assistant Vice President
charles.huber@ambest.com
or
Christopher Sharkey, (908) 439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, (908) 439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

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