Major Rating Factors: Good quality investment portfolio (5.0 on a scale of 0 to 10) despite substantial holdings of BBB bonds in addition to moderate junk bond exposure. Exposure to mortgages is significant, but the mortgage default rate has been low. Good Liquidity (6.7) with sufficient resources to handle a spike in claims as well as a significant increase in policy surrenders. Fair profitability (4.7) with investment income below regulatory standards in relation to interest assumptions of reserves.
Other Rating Factors: Fair overall results on stability tests (4.5). Strong capitalization (7.4) based on excellent risk adjusted capital (severe loss scenario).
Stability Factors: I - Past results on our Investment Safety Index. T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Group annuities (83.7%), ind health (5.9%), group health (2.4%), group life (1.1%), other (6.8%)
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