A.M. Best Places Ratings of Standard Life Insurance Company of Indiana under Review with Negative Implications

2008-10-16 03:29:01 -

www.ambest.com - A.M. Best Co. has placed the financial strength rating (FSR) of B++ (Good) and issuer credit rating (ICR) of "bbb" of Standard Life Insurance Company of Indiana (Standard Life) (Indianapolis, IN) under review with negative implications. Standard Life is owned and managed by Capital Assurance Corporation (CAC), a privately owned holding company.

These rating actions reflect A.M. Best's concerns over Standard Life's near-term statutory capital and surplus and risk-adjusted capital levels due to expected investment losses to be taken by the company in third quarter 2008. Its investments in preferred stocks issued by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) as well as debt securities issued by Washington Mutual make up the majority of these expected impairments. Additionally, A.M. Best is reviewing the impact of the current market environment on Standard Life's remaining subprime investments, which constitute a material portion of capital.

In placing the ratings under review, A.M. Best notes CAC management's favorable track record of raising capital for Standard Life to support growth initiatives and replace previous investment losses. A.M. Best would expect CAC to replenish quickly any lost capital and surplus due to these potential investment losses and recognizes that management is proceeding in the capital raising process; however, in the event that CAC cannot restore lost capital in a timely manner, Standard Life's ratings will be downgraded.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

A.M. Best Co.
Analysts:
Steven Faulks, 908-439-2200, ext. 5035
steven.faulks@ambest.com
or
Thomas Rosendale, 908-439-2200, ext. 5201
thomas.rosendale@ambest.com
or
Public Relations:
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com