The rating agencies are wondering how a big life insurance acquisition will affect the acquirer’s relationship with a large life reinsurance subsidiary.[@@]

MetLife Inc., New York, announced Monday that it intends to use $11.5 billion in cash and stock to acquire Travelers Life & Annuity from Citigroup Inc., New York.

MetLife now owns 52% of the stock of Reinsurance Group of America Inc., St. Louis, but MetLife executives have suggested that the company might sell some assets, including its majority stake in RGA, to pay for the Travelers Life deal.

Standard & Poor’s Ratings Services, New York, has reacted by putting the AA minus ratings of RGA and its main subsidiaries on CreditWatch Negative.

The Chicago office of Fitch Ratings has reaffirmed the AA minus insurer financial strength rating that it has assigned RGA.

At S&P, “the ratings on RGA reflect, in part, implicit support from MetLife as a strategically important member of the group,” S&P says in a comment about its decision to review its RGA ratings.

Now that MetLife says it might consider selling its stake in RGA, “Standard & Poor’s no longer considers RGA to be strategic to MetLife and will be rating RGA solely on its stand-alone characteristics,” S&P says.

S&P will be talking to RGA managers about RGA strategy and capitalization plans, and, if the RGA ratings are lowered, the ratings “are not expected to fall by more than one notch,” S&P says.

Fitch says it may not have to change its RGA rating because the rating already incorporates the possibility that MetLife might sell its stake in the reinsurer. “Fitch’s ratings on RGA reflect the company’s stand-alone profile,” Fitch says.

Representatives for RGA were not immediately available for comment.