Select the preferred region/country and language from the list below:

Check this box to go to your preferred country/region and language homepage every time you visit www.standardandpoors.com.

S&P |
S&P.com will be conducting routine maintenance Friday at 8pm through Sunday at 5pm, New York time. Site performance may not be optimal during this time. We apologize for the inconvenience and thank you for your patience.

Rating Actions Taken On 10 U.S.-Based Insurance Groups Following Sovereign Downgrade

Publication date: 08-Aug-2011 12:19:42 EST


  • On Aug. 5, 2011, Standard & Poor's Ratings Services lowered its long-term sovereign credit rating on the United States of America to 'AA+' and assigned a negative outlook.
  • As a result, we have lowered the long-term counterparty credit and financial strength ratings on five U.S. insurance groups to 'AA+' and assigned negative outlooks.
  • We have also affirmed the ratings on five other U.S. insurance groups and revised the outlooks on these companies to negative from stable.
  • In our view, the U.S. sovereign credit rating constrains the long-term ratings on these U.S. insurers because their businesses and assets are highly concentrated in the U.S. and they have significant holdings in U.S. Treasury and agency securities.
 
NEW YORK (Standard & Poor's) Aug. 8, 2011--Standard & Poor's Ratings Services 
said today that it lowered to 'AA+' from 'AAA' its long-term counterparty 
credit and financial strength ratings on the member companies of five U.S. 
insurance groups: Knights of Columbus, New York Life, Northwestern Mutual, 
Teachers Insurance & Annuity Assoc. of America (TIAA), and United Services 
Automobile Assoc. (USAA). The outlooks on the ratings on all of these 
companies are negative. Standard & Poor's also said that it lowered the 
ratings on approximately $17 billion of securities issued by New York Life, 
Northwestern Mutual, TIAA, USAA, and their affiliates.
     At the same time, Standard & Poor's affirmed the 'AA+' ratings on the 
members of five other insurance groups--Assured Guaranty, Berkshire Hathaway, 
Guardian, Massachusetts Mutual, and Western & Southern--and revised the 
outlooks on ratings on these companies to negative from stable.
     The rating actions on these 10 insurance groups follow the lowering of 
the long-term sovereign credit rating on the United States of America to 'AA+' 
from 'AAA' (see "United States of America Long-Term Rating Lowered To 'AA+' On 
Political Risks And Rising Debt Burden; Outlook Negative," Aug. 5, 2011.) We 
factor direct and indirect sovereign risks--such as the impacts of 
macroeconomic volatility, currency devaluation, asset impairments, and 
investment portfolio deterioration--into our financial strength ratings. Per 
our criteria, the sovereign local-currency credit rating constrains our 
financial strength ratings on insurers (see "Counterparty Credit Ratings And 
The Credit Framework," April 14, 2004). The 10 affected insurance groups 
operate in the U.S. and generally have significant holdings of U.S. Treasury 
and agency securities. For the insurers with the most exposure, these 
investments constituted as much as 200% of total adjusted capital at year-end 
2010.
     In our opinion, very strong financial profiles and favorable business 
profiles support the 'AA+' ratings on the 10 affected U.S. insurance groups. 
In our view, these companies maintain very strong capital and liquidity. In 
addition, we believe that the significant retail insurance liabilities--such 
as whole life insurance and deferred annuities--that some of these companies 
have are less prone to withdrawals or surrenders than institutional 
liabilities. Knights of Columbus, TIAA, and USAA also benefit from affinity 
relationships with their policyholders, which enhance the persistency of 
liabilities.
     Our view of these companies' fundamental credit characteristics has not 
changed. Rather, the rating actions reflect the application of criteria and 
our view that the link between the ratings on these entities and the sovereign 
credit ratings on the U.S. could lead to a decline in the insurers' financial 
strength. This is because these companies' businesses and assets are highly 
concentrated in the U.S.
     For related rating actions on other U.S. financial services companies, 
select GSEs, and funds, see "Ratings On Select GREs And FDIC- And 
NCUA-Guaranteed Debt Lowered After Sovereign Downgrade," also published today.
     Under our criteria, the local-currency sovereign credit rating on the 
U.S. constrains the ratings on domestic insurance operating and holding 
companies. If we were to lower our rating on the U.S. again, we would likely 
take the same rating action on the affected insurers and their related 
obligations. Alternatively, if we were to revise the rating outlook on the 
U.S. to stable, we would likely revise the outlook on the affected insurers to 
stable, assuming there is no deterioration in a particular insurer's business 
and financial profiles.
 
RATINGS LIST
 
Ratings Lowered And Removed From CreditWatch Negative
                                 To                    From
Knights of Columbus
 Counterparty Credit Rating      AA+/Negative/--       AAA/Watch Neg/--
 Financial Strength Rating       AA+/Negative          AAA/Watch Neg

New York Life Insurance Co.
 Counterparty Credit Rating      AA+/Negative/A-1+     AAA/Watch Neg/A-1+
 Financial Strength Rating       AA+/Negative          AAA/Watch Neg
 Subordinated Debt               AA-                   AA/Watch Neg
New York Life Insurance & Annuity Corp.
 Counterparty Credit Rating      AA+/Negative/--       AAA/Watch Neg/--
 Financial Strength Rating       AA+/Negative          AAA/Watch Neg
New York Life Funding
New York Life Global Funding
 Senior Secured                  AA+                   AAA/Watch Neg

Northwestern Mutual Life Insurance Co.
 Counterparty Credit Rating      AA+/Negative/--       AAA/Watch Neg/--
 Financial Strength Rating       AA+/Negative          AAA/Watch Neg
 Subordinated Debt               AA-                   AA/Watch Neg
Northwestern Long Term Care Insurance Co.
 Counterparty Credit Rating      AA+/Negative/--       AAA/Watch Neg/--
 Financial Strength Rating       AA+/Negative          AAA/Watch Neg

Teachers Insurance & Annuity Assoc. of America
 Counterparty Credit Rating      AA+/Negative/--       AAA/Watch Neg/--
 Financial Strength Rating       AA+/Negative          AAA/Watch Neg
 Senior Unsecured                AA+                   AAA/Watch Neg
 Subordinated Debt               AA-                   AA
TIAA-CREF Life Insurance Co.
 Counterparty Credit Rating      AA+/Negative/--       AAA/Watch Neg/--
 Financial Strength Rating       AA+/Negative          AAA/Watch Neg

United Services Automobile Assoc.
USAA Casualty Insurance Co.
USAA General Indemnity Co.
USAA Life Insurance Co.
USAA Life Insurance Co. of New York
 Counterparty Credit Rating      AA+/Negative/--       AAA/Watch Neg/--
 Financial Strength Rating       AA+/Negative          AAA/Watch Neg
USAA Capital Corp.
 Counterparty Credit Rating      AA+/Negative/A-1+     AAA/Watch Neg/A-1+
 Senior Unsecured                AA+                   AAA/Watch Neg
 Commercial Paper                A-1+                  A-1+

Ratings Affirmed; Outlook Revised To Negative
                                 To                    From
Assured Guaranty Ltd.
 Counterparty Credit Rating      A+/Negative/--        A+/Stable/--
 Junior Subordinated Debt        A-                    A-
 Senior Unsecured Debt           A+                    A+
Assured Guaranty (Bermuda) Ltd.
Assured Guaranty (Europe) Ltd.
Assured Guaranty (UK) Ltd.
Assured Guaranty Corp.
Assured Guaranty Municipal Corp.
Assured Guaranty Municipal Insurance Co.
 Counterparty Credit Rating      AA+/Negative/--       AA+/Stable/--
 Financial Strength Rating       AA+/Negative          AA+/Stable
 Financial Enhancement Rating    AA+/Negative          AA+/Stable

Berkshire Hathaway Inc.
 Counterparty Credit Rating      AA+/Negative/A-1+     AA+/Stable/A-1+
 Senior Unsecured                AA+                   AA+
 Commercial Paper                A-1+                  A-1+
Berkshire Hathaway International Insurance Ltd.
 Counterparty Credit Rating      AA+/Negative/A-1+     AA+/Stable/A-1+
 Financial Strength Rating       AA+/Negative          AA+/Stable

Berkshire Hathaway Life Insurance Co. of NE
Columbia Insurance Co.
 Counterparty Credit Rating      AA+/Negative/--       AA+/Stable/--
 Financial Strength Rating       AA+/Negative/--       AA+/Stable/--
 Financial Enhancement Rating    AA+/Negative          AA+/Stable
GEICO Corp.
 Counterparty Credit Rating      AA+/Negative/--       AA+/Stable/--
 Senior Unsecured                AA+                   AA+
General Re Corp.
 Counterparty Credit Rating      AA+/Negative/A-1+     AA+/Stable/A-1+
 Commercial Paper                A-1+                  A-1+
General Re Financial Products Corp.
National Re Corp.
 Counterparty Credit Rating      AA+/Negative/--       AA+/Stable/--
Berkshire Hathaway Assurance Corp.
 Financial Strength Rating       AA+/Negative          AA+/Stable
 Financial Enhancement Rating    AA+/Negative          AA+/Stable
National Fire & Marine Insurance Co.
 Counterparty Credit Rating      AA+/Negative/--       AA+/Stable/--
 Financial Strength Rating       AA+/Negative          AA+/Stable
 Financial Enhancement Rating    AA+/Negative          AA+/Stable
Central States Indemnity Co. of Omaha
Continental Divide Insurance Co.
Cornhusker Casualty Co.
CSI Life Insurance Co.
Cypress Insurance Co. (CA)
Fairfield Insurance Co.
GEICO Casualty Co.
GEICO General Insurance Co.
GEICO Indemnity Co.
General Reinsurance AG
General Reinsurance Australia Ltd.
General Reinsurance Corp.
General Star Indemnity Co.
General Star National Insurance Co.
Genesis Indemnity Insurance Co.
Genesis Insurance Co.
Government Employees Insurance Co.
Kansas Bankers Surety Co.
Medical Protective Co.
National Indemnity Co.
National Indemnity Co. of Mid-America
National Indemnity Co. of the South
National Liability & Fire Insurance Co.
National Reinsurance Corp.
Redwood Fire & Casualty Insurance Co.
Wesco-Financial Insurance Co.
 Counterparty Credit Rating      AA+/Negative/--       AA+/Stable/--
 Financial Strength Rating       AA+/Negative          AA+/Stable
Faraday Reinsurance Co. Ltd.
General Re Life Corp.
General Reinsurance Africa Ltd.
General Reinsurance Life Australia Ltd.
 Financial Strength Rating       AA+/Negative          AA+/Stable

Guardian Insurance & Annuity Co.
Berkshire Life Insurance Co. of America
 Counterparty Credit Rating      AA+/Negative/--       AA+/Stable/--
 Financial Strength Rating       AA+/Negative          AA+/Stable
Guardian Life Insurance Co. of America
 Counterparty Credit Rating      AA+/Negative/--       AA+/Stable/--
 Financial Strength Rating       AA+/Negative          AA+/Stable
 Subordinated Debt               AA-                   AA-

Massachusetts Mutual Life Insurance Co.
 Counterparty Credit Rating      AA+/Negative/A-1+     AA+/Stable/A-1+
 Financial Strength Rating       AA+/Negative          AA+/Stable
 Commercial Paper                A-1+                  A-1+
 Subordinated Debt               AA-                   AA-
C.M. Life Insurance Co.
MML Bay State Life Insurance Co.
 Counterparty Credit Rating      AA+/Negative/--       AA+/Stable/--
 Financial Strength Rating       AA+/Negative          AA+/Stable

Western & Southern Financial Group Inc.
 Counterparty Credit Rating      AA-/Negative/--       AA-/Stable/--
 Senior Unsecured                AA-                   AA-
Western and Southern Life Insurance Co.
Western-Southern Life Assurance Co.
Columbus Life Insurance Co.
Integrity Life Insurance Co.
National Integrity Life Insurance Co.
 Counterparty Credit Rating      AA+/Negative/--       AA+/Stable/--
 Financial Strength Rating       AA+/Negative          AA+/Stable
Lafayette Life Insurance Co.
 Financial Strength Rating       AA+/Negative          AA+/Stable
 
RELATED CRITERIA AND RESEARCH
 
Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.

Primary Credit Analysts:Neal Freedman, New York (1) 212-438-1274;
neal_freedman@standardandpoors.com
Michael Gross, San Francisco (1) 415-371-5003;
michael_gross@standardandpoors.com
John Iten, New York (1) 212-438-1757;
john_iten@standardandpoors.com
Neil Stein, New York (1) 212-438-5906;
neil_stein@standardandpoors.com
Patrick Wong, New York (1) 212-438-1936;
patrick_wong@standardandpoors.com
David Veno, New York (1) 212-438-2108;
david_veno@standardandpoors.com
David M Zuber, New York (1) 212-438-1125;
david_zuber@standardandpoors.com
Secondary Contacts:Kevin Ahern, New York (1) 212-438-7160;
kevin_ahern@standardandpoors.com
Matthew Carroll, New York (1) 212-438-3112;
matthew_carroll@standardandpoors.com
Gregory Gaskel, New York (1) 212-438-2787;
greg_gaskel@standardandpoors.com
Damien Magarelli, New York (1) 212-438-6975;
damien_magarelli@standardandpoors.com

No content (including ratings, credit-related analyses and data, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of S&P. The Content shall not be used for any unlawful or unauthorized purposes. S&P, its affiliates, and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions, regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an "as is" basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT'S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P's opinions and analyses do not address the suitability of any security. S&P does not act as a fiduciary or an investment advisor. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.

Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they have been assigned. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. To reprint, translate, or use the data or information other than as provided herein, contact Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to: research_request@standardandpoors.com.

Contact Client Services

1-877-SPCLIENT
1-877-772-5436

Call Tree Options
Contact Us