A.M. Best Withdraws Credit Ratings of Financial American Life Insurance Company
OLDWICK, N.J.--(BUSINESS WIRE)--Mar 30, 2017--A.M. Best has downgraded the Financial Strength Rating (FSR) to B (Fair) from B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bb+” from “bbb” of Financial American Life Insurance Company (FAMLI) (Overland Park, KS). The outlook of the Long-Term ICR has been revised to negative from stable, while the outlook for the FSR is stable. Concurrently, A.M. Best has withdrawn the Credit Ratings (ratings) as the company has requested to no longer participate in A.M. Best’s interactive rating process.
The rating actions reflect recent unfavorable financial results of FAMLI, which has been in run-off since mid-2013. These results have proved materially different from original estimates due to higher expenses, higher benefits paid and a write-down in deferred tax assets. The poor results have significantly impacted capital and surplus, which is at a level lower than what had been expected by A.M. Best. In addition to these results and the significant deviation from A.M. Best’s expectations, the ratings also reflect A.M. Best’s ongoing concern about management’s ability to manage FAMLI’s run-off operations profitably and to continue servicing all its liabilities.
Prior to 2013, FAMLI was the credit insurance provider for Financial American Holdings Corporation (FAMHO). In recent years, its business profile contracted due to the economy and a shift in consumer preference to non-credit life products, such as vehicle service contracts, GAP insurance and other casualty-related products. These factors have impacted most credit writers, and several have exited the credit insurance marketplace. As a result, FAMLI decided it would discontinue issuing new business in mid-2013. The company has been in run-off since and has produced volatile results.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings .
A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
View source version on businesswire.com:http://www.businesswire.com/news/home/20170330006279/en/
CONTACT: Erik Miller, 908-439-2200, ext. 5187
Senior Financial Analyst
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
Tom Rosendale, 908-439-2200, ext. 5201
Jim Peavy, 908-439-2200, ext. 5644
Director, Public Relations
KEYWORD: UNITED STATES EUROPE NORTH AMERICA NEW JERSEY
INDUSTRY KEYWORD: PROFESSIONAL SERVICES FINANCE INSURANCE
SOURCE: A.M. Best
Copyright Business Wire 2017.
PUB: 03/30/2017 06:16 PM/DISC: 03/30/2017 06:15 PM