A.M. Best Downgrades Ratings of the Life Subsidiaries of Financial Industries Corporation.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--April 26, 2004 A.M. Best Co. has downgraded the financial strength rating to B+ (Very Good) from B++ (Very Good) for Family Life Insurance Company (Family Life) and to B (Fair) from B+ (Very Good) for Investors Life Insurance Company of North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. (ILNA ILNA Iranian Labor News Agency ILNA Illinois Numismatic Association ILNA Indian Languages Newspapers Association ILNA International and Local Network Association ILNA Inspector Led Neighbourhood Area (UK) ). These life insurance entities are wholly owned operating life insurance subsidiaries of the Financial Industries Corporation (FIC FIC First International Computer FIC Fogarty International Center (John E. Fogarty International Center for Advanced Study in the Health Sciences; National Institutes of Health) FIC Fellowship for Intentional Community ) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : FNINE). All companies are located in Austin, TX. The outlook on these ratings has been negative since June 2003. The rating action for Family Life reflects the company's declining net premium trends in recent years, fluctuating statutory operating results, challenges encountered in growing its core mortgage protection life insurance business and the impact of the financially weakened parent, FIC. However, A.M. Best notes that Family Life's risk-adjusted capitalization remains more than adequate for its current business profile and investment risks. The rating action for ILNA reflects its weak risk-adjusted capitalization, reduced statutory 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 , significant exposure to real estate investments and related concentration risk and the impact of the financially weakened parent, FIC. In addition, this rating action acknowledges the continuing challenges A.M. Best perceives ILNA may face in its core business strategy and limited financial support from its weakened parent. In recent years, FIC has encountered numerous financial challenges, which have become known recently during the current ongoing review of its corporate financial records by its newly appointed management team. As a result, FIC's shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. has declined materially. 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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