Best’s News & Research Service - January 31, 2022 04:20 PM (EST)
AM Best Comments on Credit Ratings of Principal Financial Group, Inc. and Its Subsidiaries Following Reinsurance Announcement
- January 31, 2022 04:20 PM (EST)
Oldwick //BestWire// - AM Best has commented that the Credit Ratings (ratings) of Principal Financial Services, Inc. (Principal) [NASDAQ: PFG] (headquartered in Des Moines, IA) and its insurance subsidiaries remain unchanged following the Jan. 31, 2022, announcement that Principal Life Insurance Company and Principal National Life Insurance Company have entered into an agreement to cede its in-force U.S. retail fixed annuities and universal life insurance with secondary guarantee (ULSG) blocks of business to Sutton Cayman, Ltd, an affiliate of Talcott Resolution Life, Inc.
The divestitures of the retail fixed annuity and ULSG in-force blocks are consistent with the results of Principal’s strategic review announced in June 2021. The retail fixed annuity and ULSG statutory reserves are $16 billion and $9 billion, respectively. The transaction will be structured through 100% coinsurance cessions and retrocessions, each on a coinsurance or coinsurance with funds withheld basis. There are several counterparty protections for the benefit of Principal. Principal will retain all responsibility for the administration of the ceded business, and Principal Global Investors, LLC will be appointed as investment adviser to manage the transferred commercial mortgage loans and private credit assets. The transaction is expected to close in the second quarter of 2022.
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.