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FOR IMMEDIATE RELEASE
OLDWICK - JULY 21, 2015 11:49 AM (EDT)
A.M. Best has downgraded the financial strength rating to B++ (Good) from A (Excellent) and the issuer credit rating to "bbb+" from "a" of Colorado Bankers Life Insurance Company (Colorado Bankers) (Greenwood Village, CO). Additionally, A.M. Best has placed the ratings under review with developing implications. Colorado Bankers is currently a downstream subsidiary of Dearborn National Life Insurance Company (Dearborn National) whose ultimate parent is Health Care Service Corporation (HCSC) (both domiciled in Chicago, IL).
These rating actions follow the announcement that Dearborn National has signed an agreement to sell Colorado Bankers to Southland National Insurance Corporation (Southland National). The downgrade reflects the removal of rating enhancement that was afforded to Colorado Bankers as a result of implicit and explicit financial support provided by Dearborn National and HCSC and the change in A.M. Best's view of the strategic value of Colorado Bankers to the organization. The under review status reflects the evolving business strategy for Colorado Bankers as a subsidiary of Southland National. Southland National was acquired in 2014 by Eli Global, a privately-held international information and financial services group, and is the first insurance company to be part of the organization. Southland National's current block of business consists mostly of preneed business, which is in run-off. For the most part, Colorado Bankers markets worksite and individual life, annuity and accident and health products. Colorado Bankers currently has a strong level of risk-adjusted capital and has reported favorable operating results for the past two years. The company is also licensed in 49 states and has a well-established distribution structure. A.M. Best notes that the ratings of HCSC and Dearborn National remain unchanged due to their brand strength, premium revenue growth and maintenance of strong levels of risk-adjusted capital.
Based on initial discussion with management, Colorado Bankers will remain a separate downstream subsidiary of Southland National and intends to retain all of its employees. Eli Global plans to bolster the capital and surplus of Colorado Bankers, and the company will serve as the flagship of Eli Global's future insurance operations.
The ratings of Colorado Bankers will remain under review pending detailed discussions with the new management team, regulatory approval and the closing of the transaction.
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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