A.M. Best Affirms Financial Strength Rating of Security Mutual Life Insurance Company of New York; Revises Outlook to Stable.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) of Security Mutual Life Insurance Company of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (Security Mutual) (Binghamton, NY) and revised the outlook to stable from positive. This action follows today's announcement that Security Mutual's plan to be acquired via sponsored demutualization Demutualization The process of changing corporate structure from a mutual fund company to some other form, such as a limited liability or corporation. Notes: This means mutual/life insurance companies convert from policyholder companies to stock companies. by The Ohio National Life The Ohio National Life Insurance Company, is headquartered in Cincinnati, Ohio. It was originally founded as a stock company in 1909 but converted to mutual company status in 1959. In 1998, Ohio National reorganized as a mutual insurance holding company. Insurance Company (Ohio National) (Cincinnati, OH) has been terminated due to failure to obtain regulatory approval from the New York Insurance Department (NYID). Regulatory approval was declined as a result of the companies' inability to reach a stock purchase agreement that was satisfactory to the NYID. The transaction, if consummated, had been expected to provide broader product and distribution capabilities to Security Mutual, while enhancing its overall financial flexibility. A.M. Best believes the termination of the agreement may result in a decline in premium flow in the near term due to potential disruption within Security Mutual's distribution force. Additionally, expenses incurred during the due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. and demutualization process will have a negative impact on 2004 operating results. However, A.M. Best expects that premium volume will stabilize and ultimately grow, bolstered by improved sales within the group insurance and worksite markets. In addition, A.M. Best notes that Security Mutual's capital, on both a risk-adjusted and absolute basis, remains solid, enhanced by the recent completion of a $10 million surplus note offering. Going forward, A.M. Best will continue to evaluate Security Mutual's stand-alone strategy and expects recent improvements in operating fundamentals to continue. Security Mutual operates primarily in the New York metropolitan area New York–Northern New Jersey–Long Island is the most populous metropolitan area in the United States and the third most populous in the world, after Tokyo and Mexico City. with an emphasis on universal life, individual fixed annuities Fixed annuities Contracts in which an insurance company or issuing financial institution pays a fixed dollar amount of money per period. , group life and disability products. The company's rating reflects its strong presence within the upscale traditional life insurance market niche, its expanding worksite whole life business, solid capitalization, high quality asset portfolio and diversified earnings profile, which is well balanced between traditional life and asset accumulation products. While expenses related to the due diligence process connected with the terminated transaction with Ohio National are expected to depress de·press v. 1. To lower in spirits; deject. 2. To cause to drop or sink; lower. 3. To press down. 4. To lessen the activity or force of something. reported earnings in 2004, A.M. Best notes that underlying drivers of operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before have shown strong improvement, which is expected to generate better results going forward. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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