The outlook for First Rehabilitation Life Insurance Co. of America has been upgraded to “stable,” from “negative,” because of improved earnings and greater diversification, according to A.M. Best Co.

The ratings service said it also affirmed the financial strength rating of “A-“ (Excellent) and issuer credit rating of “a-” for the Great Neck, N.Y.-based company.

A.M. Best said the revised outlook reflects First Rehabilitation’s improving pre-operating earnings and capitalization, ongoing diversification efforts, as well as the completion of the premium crediting/refund process agreed upon with the state of New York a couple of years ago on its core statutory disability income business.

First Rehabilitation remains one of the largest statutory disability income carriers in New York, based on policy count and written premiums. The company has expanded its diversification of premiums written with the growth of its group medical reimbursement, group excess major medical, group dental and group vision products, according to A.M. Best.  The growth of these products, combined with the expansion of First Rehabilitation’s disability business, has generated increased pre-tax operating earnings. As a result of this growth, First Rehabilitation’s surplus also has grown, the ratings service noted.

A.M. Best said offsetting these strengths include First Rehabilitation’s concentrated business profile and challenges it faces in managing loss ratios in an uncertain economic and legislative environment in certain product segments.