A.M. Best Affirms Ratings of Farm Bureau Life Insurance Company and EquiTrust Life Insurance Company.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A (Excellent) and the issuer credit rating (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "a+" of Farm Bureau Life Insurance Company (FB Life). The outlook for the FSR is stable, and the outlook for the ICR has been revised to negative from stable. A.M. Best has also affirmed the FSR of A (Excellent) and the ICR of "a" of EquiTrust Life Insurance Company (EquiTrust). The outlook for both EquiTrust ratings is stable. Concurrently, A.M. Best has affirmed the ICR and senior debt ratings of "bbb" of FBL FBL Full Bell Lines (coin grading) FBL Fly by Light FBL FIATA Bill of Lading FBL Functional Baseline FBL Foundation for a Better Life FBL Federal Barge Lines, Inc. Financial Group Inc. (FFG FFG Forschungsförderungsgesellschaft (German: Austrian research promotion agency) FFG Flash Flood Guidance FFG Guided Missile Frigate FFG Fall from Grace (band) FFG Fast Frigates FFG Freeware Flight Group ) [NYSE NYSE See: New York Stock Exchange : FFG], the ultimate parent of FB Life and EquiTrust. The outlook for both ratings is stable. All companies are domiciled in West Des Moines West Des Moines (də moin`), city (1990 pop. 31,702), Polk co., S central Iowa, a growing suburb W of Des Moines; inc. 1893 as Valley Junction, renamed 1938. Products manufactured there include cement, metal items, and pumps. , IA. The rating affirmations for FB Life recognize its consistent positive earnings, favorable capitalization and strong affinity branding within the Farm Bureau niche. Offsetting these positive rating factors are the company's flat premium production and its ongoing challenge of managing spread compression in the low interest rate environment and high, but declining level of real estate related assets. The negative outlook on its ICR reflects the ongoing dividend requirements FB Life provides for servicing the group's debt as well as capital contributions to support the growth in its affiliate, EquiTrust. As EquiTrust has grown in size and importance, A.M. Best expects the ICRs of both companies will be harmonized har·mo·nize v. har·mo·nized, har·mo·niz·ing, har·mo·niz·es v.tr. 1. To bring or come into agreement or harmony. See Synonyms at agree. 2. Music To provide harmony for (a melody). , reflecting the dominance of annuities in the group's reserve composition and increasing leverage and intangibles to equity triggered by EquiTrust's rapid growth. The ratings of EquiTrust acknowledge its growth in absolute capital and its adequate risk-adjusted capitalization, primarily supported through capital contributions, as well as recent positive 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 . During the last several years, EquiTrust has recorded rapid premium growth in the fixed and indexed annuity marketplace, which has raised business concentration concerns. However, recent sales of fixed and indexed annuities have slowed, and A.M. Best expects annuity growth to moderate going forward. While the recent growth in annuity liabilities resulted in significant interest rate risk, EquiTrust's adequate risk-adjusted capitalization, surrender charge Surrender Charge A fee levied on a life insurance policyholder upon cancellation of his or her life insurance policy. The fee is used to cover the costs of keeping the insurance policy on the insurance provider's books. protection and market value adjustment feature somewhat mitigate these risks. Similar to FB Life, EquiTrust maintains a high level of real estate related investments. A.M. Best continues to recognize EquiTrust's rational product design, competent hedging programs and proactive market conduct and compliance programs. However, A.M. Best remains cautious with regard to the indexed annuity marketplace, especially in light of recent litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. against several leading indexed annuity carriers. A.M. Best believes that competition within the indexed annuity marketplace remains high and that this product line is susceptible to additional regulatory and legislative challenges. FFG's debt-to-capital ratio is within the range for its ratings, and the company maintains a favorable fixed coverage ratio to service its outstanding debt. The following debt ratings have been affirmed: FBL Financial Group Inc--. -- "bbb" on $75 million 5.85% senior unsecured notes, due 2014 -- "bbb" on $100 million 5.875% senior unsecured notes, due 2017 Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and healthcare service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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