A.M. Best Affirms Ratings of National Life Insurance Company and Its Subsidiary.Business Editors/Insurance Writers OLDWICK, N.J.--(BUSINESS WIRE)--June 9, 2004 A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A (Excellent) of National Life Insurance Company (NLV NLV Norwalk-Like Virus NLV North Las Vegas (Nevada) NLV National Language Version NLV National Library of Vietnam NLV Nanosat Launch Vehicle NLV New Living Version (version of the Bible) ) (Montpelier, VT) and its wholly-owned subsidiary, Life Insurance Company of the Southwest (Dallas, TX). Concurrently, A.M. Best has affirmed the debt rating of "bbb" on NLV's parent holding company, NLV Financial Corporation's (Montpelier, VT) $200 million 7.5% senior unsecured notes and has withdrawn the debt rating of "bbb+" on NLV's $70 million 8.25% surplus notes that were redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. in 2004. The outlook for all ratings remains negative. These rating actions reflect NLV's strong growth in its core life and annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. business, positive trending operating performance on both a statutory and GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, continued favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. mortality and persistency, careful interest spread management and a reduction in its below investment grade bond portfolio. These positive rating factors are offset by absolute and risk-adjusted capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. levels on a consolidated and stand-alone basis, which though improved, still remain somewhat below A.M. Best's expectations. Capitalization concerns are somewhat mitigated by the approximately $130 million of proceeds from NLV's parent holding company's debt offering, which could be used to support the capitalization needs of NLV's insurance subsidiary. Historically, NLV's operating returns have been pressured by a moderately high expense structure and a significant block of closed business with low rates of return. However, A.M. Best notes that a number of management initiatives undertaken to rationalize ra·tion·al·ize v. 1. To make rational. 2. To devise self-satisfying but false or inconsistent reasons for one's behavior, especially as an unconscious defense mechanism through which irrational acts or feelings are made to appear NLV's expense structure, coupled with continued top line revenue growth, will be important factors in sustaining and improving returns going forward. The financial strength rating of A (Excellent) has been affirmed for the following companies: -- National Life Insurance Company -- Life Insurance Company of the Southwest The following debt rating has been affirmed: NLV Financial Corporation-- -- "bbb" on $200 million 7.5% senior unsecured notes, due 2033 The following debt rating has been withdrawn: National Life Insurance Company-- -- "bbb+" on $70 million 8.25% surplus notes, due 2024 but redeemed 2004 For a list of A.M. Best's debt ratings, please visit http://www3.ambest.com/debtratings/. 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 www.ambest.com. |
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