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Insurer May Stop Working With Rating Agency

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NU Online News Service, Nov. 11, 2004, 6:10 p.m. EST

Standard & Poor’s Ratings Services, New York, says it may rely on public information when rating a major U.S. arm of Old Mutual P.L.C., London.[@@]

The rating agency has affirmed the BBB credit and financial strength rating of Old Mutual’s Baltimore-based Fidelity & Guaranty Life Insurance Company unit and a sister unit that writes life insurance and annuities in New York state.

The outlook on the units is stable, and F&G and its sister company have strong operating performance and strong liquidity for companies with a BBB rating, S&P says.

But S&P recently lowered its ratings on the units from A minus because of concerns about the company’s financial-management policies, and it says Fidelity & Guaranty’s managers have asked S&P to withdraw the ratings.

“Standard & Poor’s believes that there is sufficient public interest in understanding the company’s creditworthiness,” Robert Hafner, an S&P analyst, says in a statement. “As a result, Standard & Poor’s will continue to maintain the public ratings noted above. Ratings surveillance might now be based solely on publicly available information and might not involve the participation of F&G management.”