The financial strength ratings for Health Net’s life/health and HMO subsidiaries and its debt rating are under review with negative implications after a $117 million verdict in a lawsuit against the company triggered by the 1999 sale of one health plan subsidiary in Texas. A.M. Best, the world’s oldest insurance rating company will continue to review the company’s business strategy, membership retention and earnings growth. The company is also awaiting rulings on suits brought against Health Net in Oklahoma and Louisiana. A.M. Best noted that Health Net’s operating results improved in the first quarter of 2005, and that it has good flexibility given a $700 million borrowing capacity from an unused bank line of credit.
