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FOR IMMEDIATE RELEASE
OLDWICK - APRIL 08, 2015 01:57 PM (EDT)
A.M. Best has commented that the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings of "a" of Pan-American Life Insurance Company (New Orleans, LA), its wholly owned subsidiary, Pan-American Assurance Company (New Orleans, LA), and an affiliate INRECO International Reinsurance Company (Cayman Islands) – collectively referred to as the Pan-American Life Insurance Group – are unchanged following the recent announcement that their ultimate parent, Pan-American Life Mutual Holding Company (PALMHC) has signed a definitive merger agreement with Mutual Trust Holding Company (MTHC) (Oak Brook, IL). PALMHC and MTHC are mutual insurance holding companies.
As a result of the transaction, MTHC will merge with PALMHC; MTL Holdings Inc., MTHC's intermediate holding company, will merge into Pan-American Life Insurance Group Inc. (PALIG), PALMHC's downstream holding company and the immediate parent of the members of the Pan-American Life Insurance Group. MTL Insurance Company (Oak Brook, IL), MTHC's sole life/health insurance company, is expected to operate as a stand-alone entity wholly owned by PALIG. Upon closing, the combined company will continue to operate as a mutual insurance holding company.
The merger is expected to revitalize PALIG's U.S. domestic life segment and rebalance PALIG's geographic diversification that in recent years has been more heavily weighted toward its non-U.S. businesses.
The merger with MTHC is expected to be immediately accretive to PALIG's earnings. A.M. Best expects current risk-adjusted capitalization levels for the members of the Pan-American Life Insurance Group to be unaffected.
The merger has been approved by the boards of directors of both MTL and PALMHC, and is expected to close in the second half of 2015, subject to policyholder and regulatory approvals and customary closing conditions.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
This press release relates to rating(s) 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 visit A.M. Best's Ratings & Criteria Center.
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