A.M. Best Downgrades Rating of Jefferson National Life and American Life of New York; Revises Outlook to Negative.OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength rating to B+ (Very Good) from B++ (Very Good) of Jefferson National Life Insurance Company (JNL JNL Journal JNL Jackson National Life (insurance company; Lansing, MI; also seen as JNLIC) JNL JTIDS (Joint Tactical Information Distribution Systems) Network Library ) (Dallas, TX) and The American 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 (ALICNY) (New York, NY). Both life companies are indirect subsidiaries of Inviva, Inc., a privately held insurance holding company. The rating outlook has been revised to negative from stable. These rating actions reflect the continuing decline in stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. at Inviva, high levels of financial leverage and intangibles within Inviva's balance sheet and significant net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. . Inviva's 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. has been negatively impacted by net operating losses driven by new business strain and continued investments in sales and marketing, as well as a one-time charge involving the settlement, without admitting or denying liability, of market timing issues with the Securities and Exchange Commission and New York Attorney General's investigations over its acquired variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. business. Furthermore, A.M. Best notes that Inviva's business model continues to be challenged as high levels of corporate overhead expenses associated with a lack of critical mass are offsetting the benefits gained from competitive policy administration unit costs. A.M. Best believes that Inviva will be challenged to contain its overhead expenses as the business grows, thus creating a difficult environment to improve earnings and capitalization. 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 http://www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 1,100 individual life/health companies and A.M. Best groups, please visit http://www.ambest.com/lh. 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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