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Life Health > Life Insurance

Rating Agencies Affirm Ratings for 3 Carriers

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Credit rating agencies say 3 large insurers are continuing to do a good job of managing their finances.

Companies that have seen strong ratings affirmed recently include New York Life Insurance Company, New York; Guardian Life Insurance Company of America, New York; and the Teachers Insurance and Annuity Association of America (TIAA) and a principal TIAA subsidiary, TIAA-CREF Life Insurance Company, Charlotte, N.C.

Four rating agencies — Moody’s Investors Service Inc., New York; Standard & Poor’s Financial Services L.L.C., New York; Fitch Inc., New York; and A.M. Best Company Inc., Oldwick, N.J. – say they will continue to assign top-level AAA financial strength ratings or the equivalent, with a stable outlook, to New York Life.

“New York Life has performed well in a very difficult economic environment, and we expect continued improvement in earnings and capital generation as investment losses subside, albeit to higher than historical levels,” Moody’s says in a comment on its decision to affirm the Aaa it has given New York Life. “Although the company has not been immune to industry stresses, its modest financial leverage, prudent investment portfolio, strong liquidity profile, and conservative product designs have limited financial stress during a period in which many other life insurers had seen considerably greater strain.”

In other ratings news, Moody’s has affirmed the Aaa insurance financial strength ratings of TIAA and TIAA-CREF Life. Moody’s also has affirmed the Aa1 long-term issuer rating of TIAA and the Aa1 rating on the guaranteed debt of TIAA Global Markets Inc.

Moody’s changed the rating outlook on TIAA and its affiliates to stable, from negative.

The outlook changed because of TIAA’s strengthened capital position and an expectation of improved earnings over the near-to-medium term, Moody’s says.

“While we expect the company will take material investment losses in 2010– potentially up to $2 billion, largely in commercial real estate and non-agency [residential mortgage-backed securities]–the company has ample capital to absorb losses,” Moody’s Senior Vice President Scott Robinson says in a statement. “In the event of an extreme stress scenario, which is not anticipated, the company also has the flexibility to further cut policyholder dividends.”

Standard & Poor’s has affirmed its AA plus credit rating on Guardian Life and kept its outlook on Guardian at stable. The Guardian rating affirmation also applies to Guardian Insurance & Annuity Company, the Guardian subsidiary that issues variable insurance products, fixed annuities and 401(k) products, Standard & Poor’s says.

The Guardian rating affirmation was primarily based partly on the carrier’s “very strong competitive position, supported by one of the industry’s most productive captive-agent distribution systems,” and partly on its “very strong investment management and liquidity,” Standard & Poor’s says.


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