A.M. Best Places Ratings of Forethought Life Insurance Company Under Review With Negative Implications.OLDWICK, N.J. -- A.M. Best Co. has placed the financial strength rating of A- (Excellent) and issuer credit rating "a-" of Forethought fore·thought n. 1. Deliberation, consideration, or planning beforehand. 2. Preparation or thought for the future. See Synonyms at prudence. Life Insurance Company (FLIC FLIC - Functional Language Intermediate Code. An intermediate language used in the Chalmers LML compiler. ["FLIC - A Functional Language Intermediate Code", S. Peyton Jones <simonpj@dcs.gla.ac.uk> et al, RR 148, U Warwick, Sep 1989]. ) (Indianapolis, IN) under review with negative implications. These actions reflect A.M. Best's concern with FLIC's decline in statutory capitalization, net loss on a statutory and GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, its high unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. position and significant level of intangibles relative to its GAAP equity. The ratings have been placed under review following discussions with FLIC's ultimate parent company, Forethought Financial Group, Inc. (FFG FFG Forschungsförderungsgesellschaft (German: Austrian research promotion agency) FFG Flash Flood Guidance FFG Guided Missile Frigate FFG Fall from Grace (band) FFG Fast Frigates FFG Freeware Flight Group ), about significant new capital raising initiatives. These efforts are expected to improve the capital position of the organization to support growth and offset any additional investment losses. While A.M. Best expects tangible progress in these efforts in the near term, the ratings of FLIC will be negatively impacted should the capital raising efforts be unsuccessful. FLIC recorded a decline in its reported statutory capital and surplus following investment impairments and net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. . These losses were somewhat offset by capital contributions from FFG. A.M. Best notes that FFG was successful in paying down a large portion of its outstanding debt; however, the high level of intangibles and large unrealized losses have stressed FFG's balance sheet and its exposure relative to equity remains high. The ratings continue to reflect FLIC's adequate risk-adjusted capitalization, strong market position in the pre-need segment and the simplification of its organizational structure  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. . FLIC also has taken steps to reduce the investment risk on its balance sheet by employing experienced external asset managers and investing in higher rated credits. For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion