A.M. Best Assigns Ratings to XL Re Life America Inc.OLDWICK, N.J. -- A.M. Best Co. has assigned a financial strength rating of A (Excellent) and an issuer credit rating of "a" to XL Re Life America Inc. (XL Re Life America) (Stamford, CT). The outlook for both ratings is stable. XL Re Life America is a start-up operation, currently named Servus Life Insurance Company. The name is expected to change to XL Re Life America Inc. following state approvals. XL Re Life America is ultimately owned by XL Capital Ltd (XL) (Bermuda) and offers XL a platform to enter the U.S. life reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. marketplace. XL Re Life America is licensed in 48 states and will initially write traditional mortality reinsurance on both a yearly renewable term (YRT YRT York Region Transit (Ontario) YRT Yearly Renewable Term (insurance) YRT Yale Repertory Theatre YRT Year Round Training (military) ) and co-insurance basis, with a focus on smaller- and medium-sized life writers seeking to mitigate their triple X reserve strain. The U.S. life reinsurance arena has undergone significant consolidation and price hardening hardening, in metallurgy, treatment of metals to increase their resistance to penetration. A metal is harder when it has small grains, which result when the metal is cooled rapidly. in recent years, and thus, A.M. Best believes there is opportunity and room for additional entrants. XL currently has a team based in the U.S., with several years of experience in the U.S. life insurance market. Moreover, XL subsidiaries have been active in the U.K. life reinsurance market for a number of years and have developed administration and underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. capabilities, which are transferable to the U.S. life reinsurance arena. XL Re Life America will target an NAIC NAIC See National Association of Investors Corporation (NAIC). risk-based capital ratio Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. of 300%, which A.M. Best believes will be adequate to support the planned volume of new business. Additionally, XL Re Life America will have an internal retrocession RETROCESSION, civil law. When the assignee of heritable rights conveys his rights back to the cedent, it is called a retrocession. Erskine, Prin. B. 3, t. 5, n. 1; Dict. do Jur. h.t. arrangement in place, which lends further capital support to its new business activities. Offsetting factors include the lack of a U.S. operating history and the uncertainties surrounding the successful execution of its business plan. In addition, A.M. Best believes the rate of growth of the U.S. life reinsurance market has slowed, which may pressure XL Re Life America's longer-term growth prospects. For Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 330 reinsurance companies, please visit www.ambest.com/reinsurance. 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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