S&P: Health Insurance Plan unchanged

Standard & Poor's said Health Insurance Plan of Greater New York's (HIP, BBB-/negative) announcement that it had signed a memorandum of understanding under which the company will unite with Group Health Inc. (GHI, not rated) will have no effect on the ratings on HIP or its ConnectiCare Inc. subsidiary (BB+/negative).

The agency added the merger will commence under a newly formed governing foundation with an equal number of directors from the two companies, HIP and GHI will continue as separate operating entities while an integration plan is developed.

Integration is expected to occur no earlier than the intermediate term and S&P said it expects that HIP's risk-adjusted capitalization will remain more than 130%.

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