A.M. Best Upgrades Ratings for Regence BlueCross BlueShield of Oregon

Financial Strength Rating and Outlook for the Company and Its Subsidiary

Regence Life and Health Improve in the Wake of Company's Strong Earnings


Aug 30, 2006, 01:00 ET from Regence BlueCross BlueShield of Oregon

    PORTLAND, Ore., Aug. 30 /PRNewswire/ -- A.M. Best Co. has upgraded the
 financial strength rating for Regence BlueCross BlueShield of Oregon and
 its subsidiary, Regence Life and Health Insurance Company, to A-
 (Excellent) from B++ (Very Good). The outlook for this rating is being
 revised to stable from positive. A.M. Best is considered to be the most
 authoritative insurance rating and information source in the world.
     According to A.M. Best, Regence BlueCross BlueShield of Oregon's
 improved rating reflects its growth in earnings, with underwriting and net
 income more than doubling in 2005. Strengthening capital position and
 membership gains were also cited as factors in the improved rating. The
 improvement in operating performance is attributed to corrective measures
 implemented, which include the strategic focus on core customer segments,
 revisions to product pricing and increased leveraging of The Regence
 Group's management and financial resources. Regence Life and Health's
 rating improved as the result of underwriting earnings, strong risk-based
 capitalization and operational support from The Regence Group.
     "We were very pleased to learn that A.M. Best has upgraded our rating.
 It is something we can take pride in, as it reflects the hard work of all
 Regence employees to enhance our performance and the commitment they have
 to serving our members," said J. Bart McMullan, Jr., M.D., president of
 Regence BlueCross BlueShield of Oregon.
     "Regence BlueCross BlueShield of Oregon's capitalization has
 strengthened as a result of earnings, which has allowed the level of
 risk-based capital to improve. The level of risk-based capital was
 determined to be more than adequate to handle additional growth. Although
 membership declined during the past two years as the company re-priced
 business and exited from its commercial HMOs, Regence BlueCross BlueShield
 of Oregon has experienced new enrollment due to an increase in sales and
 improved retention on its existing business. This has led to an overall
 growth of 3.7% in the first seven months of 2006," according to AM Best's
 report on Regence's improved ratings.
     "Regence Life and Health's favorable underwriting trend is forecast to
 continue during the medium term," according to the report. In addition "the
 company's stable, single-digit underwriting returns continue to strengthen
 risk-based capital," providing adequate capacity to support what A.M. Best
 predicts will be sales growth in existing and new markets.
     Regence BlueCross BlueShield of Oregon provides medical, dental and
 related coverage for about one million members in Oregon and in Clark
 County, Washington. For more than 20 years, Regence Life and Health has
 offered quality life and disability products and health plans. Both are
 part of the Regence Group, the largest affiliation of health plans in the
 northwest and intermountain states, collectively covering nearly three
 million people. The Regence Group and its affiliates are not-for-profit
 independent licensees of the Blue Cross and Blue Shield Association. Nearly
 one in three Americans has health care coverage through Blue Plans. For
 more information, visit www.or.regence.com.

SOURCE Regence BlueCross BlueShield of Oregon