NU Online News Service, Jan. 7, 2004, 5:53 p.m. EST – Moody’s Investors Service, New York, says it has lowered the financial strength rating of a U.S. insurance unit of ING Groep N.V., Amsterdam, because of a drop in the unit’s capital level and doubts that ING thinks of the unit as a core holding.[@@]
The move cut the rating of the unit, Life Insurance Company of Georgia, to A3, from A2. The outlook on the rating is stable.
The level of capital at Life of Georgia amounted to $138 million at the end of the third quarter of 2003, down from $180 million at the end of 2001, Moody’s says.
Assets increased to $1.9 billion from $1.5 billion over the same period, but the unit took a $75 million charge during the period to reinsure a block of business from a sister company, Moody’s says.
“ING has not announced any plans to divest Life of Georgia,” Moody’s notes in a discussion of the rating change.
But Moody’s questioned in May 2002 whether ING thought of Life of Georgia as being of strategic importance, and the rating agency continues to believe that Life of Georgia’s business is “not a core business for ING,” Moody’s says.
Life of Georgia sells home service life insurance.
The new A3 rating on Life of Georgia reflects Moody’s assessment of Life of Georgia’s creditworthiness on a stand-alone basis, Moody’s says.
Moody’s says it will be going through a similar analysis when rating other insurance subsidiaries that have no legally binding guarantees from their parent companies.