A.M. Best Downgrades Financial Strength and Indicative Debt Ratings on Annuity and Life Re.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 30, 2002 A.M. Best Co. has downgraded the financial strength rating to B++ (Very Good) from A- (Excellent) for 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. and Life Re (Holdings), Ltd.'s (NYSE NYSE See: New York Stock Exchange :ANR ANR - Automatic Network Routing ), (Bermuda) operating companies operating company A business that engages in transactions with outsiders. : Annuity and Life Reassurance REASSURANCE. When an insurer is desirous of lessening his liability, he may procure some other insurer to insure him from loss, for the insurance he has made this is called reassurance. , Ltd. (Bermuda) and Annuity & Life Reassurance America, Inc. (Hartford, CT). Concurrently, A.M. Best has downgraded the indicative senior debt rating to "bbb-" from "bbb" under ANR's $200 million shelf registration. All ratings remain under review with developing implications. These rating actions follow a July 29, 2002, decision to lower the financial strength ratings of ANR's subsidiaries to A- (Excellent) from A (Excellent) and to maintain the rating under review with negative implications. In that press release, A.M. Best indicated further rating reductions were possible because of uncertainties in 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. and operating fundamentals. Also, these rating actions follow ANR's September 12, 2002, public announcement that it is evaluating capital raising alternatives and has appointed a transition committee of two members from its Board of Directors to oversee the management of the company's operations, following the retirement of its chief executive officer (CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. ). These ratings reflect A.M. Best's concerns with the resolution of the SEC's review of ANR's financial statements, the unsatisfactory operating performance due to the Transamerica Re annuity 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. contract and the near-term uncertainties surrounding ANR's effort to raise additional capital and to identify a successor to its recently retired CEO. A.M. Best has discussed with ANR's management and transition committee each of these areas and their specific and appropriate plans for resolution. These initiatives, along with resolution of the pending arbitration cases, are expected to strengthen risk-adjusted capitalization and restructure the company's collateral programs to support new business activities -- including the $89 million outstanding on an unsecured credit facility with Citibank N.A. A.M. Best will continue to closely monitor ANR's progress on these initiatives including its revised business plan and the consequences to its financial strength. Upon successful and timely resolution of the collective issues enumerated This term is often used in law as equivalent to mentioned specifically, designated, or expressly named or granted; as in speaking of enumerated governmental powers, items of property, or articles in a tariff schedule. above, A.M. Best will re-evaluate the current financial strength ratings. The under review status and restoration of an Excellent rating is predicated on the outcome of the proposed capital raising alternatives and A.M. Best's view of the group's ability to complete the proposed re-structuring plan in a timely manner. The financial strength rating of A- (Excellent) has been downgraded to B++ (Very Good) for the following operating companies of Annuity and Life Re (Holdings), Ltd.: -- Annuity and Life Reassurance, Ltd. -- Annuity & Life Reassurance America, Inc. The following indicative senior debt rating has been downgraded: -- Annuity and Life Re (Holdings), Ltd.-- -- "bbb-" on senior debt securities available under the $200 million shelf registration 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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