AM Best Information Services

MAY 07, 2020 03:21 PM (EDT)

AM Best Affirms Credit Ratings of NLV Financial Corporation and Its Insurance Subsidiaries

 Richard Francis
Senior Financial Analyst
+1 908 439 2200, ext. 5152

Edward Kohlberg
+1 908 439 2200, ext. 5664

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


OLDWICK - MAY 07, 2020 03:21 PM (EDT)
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” of National Life Insurance Company (NLIC) (Montpelier, VT) and its wholly owned subsidiary, Life Insurance Company of the Southwest (Addison, TX). Concurrently, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IR) of “a-” on the surplus notes of NLIC. Both companies are life insurance subsidiaries of NLV Financial Corporation (NLVF) (headquartered in Montpelier, VT), which is the intermediate holding company in the organization’s mutual holding company structure, and are collectively known as National Life Group. AM Best has also affirmed the Long-Term ICR and the Long-Term IRs of “bbb+” of NLVF. The outlook of these Credit Ratings remains positive. (See below for a detailed listing of the Long-Term IRs.)

The ratings reflect National Life Group’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The group has a long history of successful execution in targeting life insurance and annuity product solutions to the middle market segment, which it markets through a combination of career agents and a growing independent agency force. The group’s strong sales growth trends continued through year-end 2019, but remain challenged to grow at a similar pace through the rest of 2020 due to the coronavirus crisis, although its use of an e-application process will help. Recent profitable growth has led to an improved market position and increasing market share with its niche products, such as its offerings in the K-12 educators market and indexed universal life. The ERM assessment of appropriate is reflective of the group’s well-established governance structure, culture and risk management controls.

The positive outlooks reflect a continued strengthening trend in the group’s balance sheet strength, including currently maintaining a strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and improvements in the risk profile of the group’s investment portfolio due to recent de-risking initiatives. In addition, the company has run risk-based capital stress testing scenarios for the coronavirus crisis, which show 2020 risk-based capital levels remaining in excess of company defined risk thresholds.

The following Long-Term IRs have been affirmed with positive outlooks:

NLV Financial Corporation—

— “bbb+” on $75 million 6.50% senior unsecured notes, due 2035

— “bbb+” on $200 million 7.50% senior unsecured notes, due 2033

The following Long-Term IRs have been affirmed with positive outlooks:

National Life Insurance Company—

— “a-” on $200 million 10.50% surplus notes, due 2039

— “a-” on $500 million 5.25% surplus notes, due 2068

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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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