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December 09, 2011 at 08:18 AM
Fitch Ratings has maintained ING Verzekeringen’s (ING V’s) U.S. life insurance subsidiaries (ING US) rating watch status as Evolving on the heels of a December 7 announcement that the Dutch company will take a $1.1 billion fourth quarter charge on its closed block variable annuity business.
The anticipated charge, after an analysis of policyholder behavior and assumptions for variable annuities sold between 2003 and 2009 pertaining to lapse, mortality and annuitization rates renders a reserve adequacy on their variable annuity business at a 50% confidence level on an IFRS basis.
The overall outlook looks unfavorable for the Dutch insurance lion because funding from the company itself is viewed as a weaker form of capital than a flat out cash contribution and it intensifies the company’s single-issuer credit exposure.
