Citing negative capital and surplus levels for two of its insurance companies in the third quarter 2009, A.M. Best has downgraded the ratings of MVP Health Care, Inc.’s insurance subsidiaries.

The ratings service announced it downgraded the financial strength ratings (FSR) to B (Fair) from B+ (Good) and issuer credit ratings (ICR) to “bb+” from “bbb-” of MVP Health Insurance Co. of Schenectady, N.Y., and Preferred Assurance Co. of Rochester, N.Y. A.M. Best also downgraded the FSRs to B- (Fair) from B (Fair) and ICRs to “bb-” from “bb+” of MVP Health Plan of New Hampshire, Inc. of Bedford, N.H. and MVP Health Insurance Company of NH, Inc. of Manchester, N.H.

All of those ratings were placed under review with negative implications.

A.M. Best also placed under review with negative implications and affirmed the FSRs of B+ (Good) and ICRs of “bbb-” of MVP Health Plan, Inc. and MVP Health Services Corp., both of Schenectady, N.Y.

The ratings actions follow the reports of negative capital and surplus levels at MVP Health Insurance Co. and MVP Health Insurance Plan of New Hampshire for the third quarter 2009, resulting from underwriting and net losses through September.

MVP Health Care Inc., the parent company, is currently working to gain regulatory approval from both New York insurance regulators and the department of health to transfer capital to these entities, according to A.M. Best.

A.M. Best said the ratings will remain under review until sufficient capital levels are achieved at all of MVP Health Care’s insurance subsidiaries and the completion of further discussion with the company’s management on full 2009 projections and 2010 financial projections. The overall capital management of the subsidiaries will also be a focus of the discussions, according to the ratings service.