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Best’s News & Research Service - September 17, 2021 11:18 AM (EDT)

AM Best Places Credit Ratings of Prudential Annuity Life Assurance Corporation Under Review With Negative Implications

  • September 17, 2021 11:18 AM (EDT)

Oldwick //BestWire// - AM Best has placed under review with negative implications the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa-” (Superior) of Prudential Annuity Life Assurance Corporation (PALAC), headquartered in Newark, NJ.

PALAC’s Credit Ratings (ratings) were placed under review with negative implications following the announcement that Fortitude Group Holdings, LLC (Fortitude) and Prudential Financial, Inc. (Prudential) have entered into a definitive agreement for Fortitude to acquire a portion of Prudential’s in-force legacy variable annuity block and acquire PALAC. The block is valued at $2.2 billion and the all-cash purchase price is $1.5 billion, subject to certain adjustments at closing, plus a capital release to Prudential and an expected tax benefit. The PALAC block primarily consists of non-New York traditional variable annuities with guaranteed living benefits that were issued prior to 2011, which constitute approximately $31 billion or 17% of Prudential’s total in-force individual annuity account values as of June 30, 2021.

The negative implications reflect that PALAC will no longer benefit from the financial strength of Prudential. The transaction is expected to close during the first half of 2022. The ratings will remain under review until the transaction closes, all customary regulatory approvals are received, and AM Best evaluates PALAC’s role in the Fortitude organization.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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