Standard & Poor’s Ratings Services has changed the ratings of 2 life insurers.

S&P, New York, has cut the financial strength and counterparty credit ratings of Security Benefit Life Insurance Company to A, from A plus.

S&P also has cut the financial strength and counterparty credit ratings of First Security Benefit Life Insurance and Annuity Company of New York to A, from A plus.

Security Benefit Life and First Security both are units of Security Benefit Corp., Topeka, Kan.

Security Benefit recently acquired Rydex Investments, Rockville, Md., a well-known supplier of index funds and exchange traded funds.

The S&P downgrades reflect the possibility that the cost of the Rydex deal might reduce Security Benefit’s financial flexibility and the possibility that Security Benefit might have trouble integrating the Rydex operations, S&P says in an explanation of the rating moves.

In addition, S&P has placed the ratings of Security Benefit Life on CreditWatch “as a result of [the company's] high indirect exposure to subprime mortgages though collateralized debt obligations,” S&P says.

Even if the review results in another downgrade, the ratings are likely to remain above BBB, S&P says.

The rating cuts were “not unexpected,” Security Benefit President Thomas Swank says.

Rating agencies tend to give asset managers lower ratings than they assign to insurance companies, and rating agencies also like to wait and see how rated companies do at integrating acquired companies, Swank says.

Swank says he believes the Security Benefit investment team will manage its way through the mortgage market turmoil.

“We’ve been investing successfully in CDOs for over 10 years,” Swank says.

Security Benefits has navigated its way through past disruptions, and Swank is confident the company can navigate its way through the current disruption, Swank says.

“We remain very strongly capitalized,” Swank says.