[January 30, 2013]

A.M. Best Comments on the Ratings of Merced Mutual Insurance Company

A.M. Best Co. has commented that the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of Merced Mutual Insurance Company (Merced Mutual) (Atwater, CA (News - Alert)) are unchanged. The outlook for both ratings is stable.

This commentary is based on the proposed transaction between Merced Mutual and United Heritage Financial Group, Inc. (UHFG). A.M. Best does not anticipate that the sale of Merced Mutual will result in a material change in its risk-adjusted capitalization or operating performance. The management of Merced Mutual is expected to remain intact with the buyer appointing one additional director. The transaction is expected to close by the second quarter of 201, pending policyholder and regulatory approvals.

Currently, UHFG consists of United Heritage Life Insurance Company, United Heritage Property & Casualty Company (both domiciled in Meridian, ID) and Sublimity Insurance Company (Sublimity, OR).

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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