Best’s News & Research Service - March 02, 2018 11:53 AM (EST)
A.M. Best Removes From Under Review and Affirms Credit Ratings of Fidelity & Guaranty Life Holdings, Inc. and Key Subsidiaries
- March 02, 2018 11:53 AM (EST)
Oldwick //BestWire// - A.M. Best has removed from under review with developing implications and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “bbb+” of the key life/health subsidiaries of Fidelity & Guaranty Life Holdings, Inc. (FGLH) (Delaware). Concurrently, A.M. Best has removed from under review with developing implications and affirmed the Long-Term ICR and existing senior Long-Term Issue Rating (Long-Term IR) of “bb+” of FGLH. The ratings have been removed from under review with developing implications following the closing of its acquisition by CF Corporation (renamed FGL Holdings upon completion of the transaction) in late 2017, as well as discussions by A.M. Best with management related to the organization’s anticipated business strategy under its new ownership. The outlook assigned to all Credit Ratings (ratings) is positive. (See below for a detailed listing of the companies and ratings.)
The positive outlook assigned to the ratings primarily reflects the group’s recently improved risk-adjusted capitalization and the strong financial flexibility it is expected to maintain as a member of FGL Holdings. FGLH’s operating companies have reported generally positive earnings and hold a strong competitive position in the fixed-indexed annuity (FIA) market. Partially offsetting these rating factors is the above average risk exposure in the company’s investment portfolio, its significant reliance on FIA sales and the high level of competition in the FIA market. A.M. Best also notes that FGL Holdings is still in the process of integrating its acquisition of FGLH, and that the insurance industry awaits further guidance on the specifics of the new Base Erosion and Anti-Abuse (BEAT) tax and its applicability to affiliate reinsurance transactions. A.M. Best expects that this BEAT tax will have an impact on how FGLH and certain other insurance companies structure their operations and utilize legal entities.
The FSR of B++ (Good) and the Long-Term ICRs of “bbb+” have been removed from under review with developing implications, affirmed and assigned positive outlooks for the following key life/health subsidiaries of Fidelity & Guaranty Life Holdings, Inc.
- Fidelity & Guaranty Life Insurance Company
- Fidelity & Guaranty Life Insurance Company of New York
The following Long-Term IR has been removed from under review with developing implications, affirmed and assigned a positive outlook:
— “bb+” on $300 million 6.375% senior unsecured notes, due 2021
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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