Fitch Assigns 'BBB' IDR to ING U.S.

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has assigned a long-term Issuer Default Rating (IDR) of 'BBB' to ING U.S., Inc. (ING U.S.). Fitch has maintained the Rating Watch Evolving status on all ratings, including the Insurer Financial Strength (IFS) ratings for ING U.S.'s life insurance company subsidiaries. A full list of ratings is provided at the end of this release.

Fitch's Rating Watch Evolving is based on uncertainty over ING U.S.'s pending change in ownership and concern over weakness in the company's operating performance. Based on an agreement with the European Commission, ING Group has agreed to divest its global insurance operations by the end of 2013. Fitch expects that the divestiture of ING U.S. will most likely occur via IPO.

ING U.S.'s standalone credit profile reflects the material progress ING Verzekeringen, the parent insurance holding company, has made in restructuring the U.S. life insurance operations in preparation for a potential IPO. ING U.S. has strengthened statutory capitalization, improved operating profitability in its ongoing businesses and reduced intercompany financial leverage. Further, Fitch believes that management has made good progress reducing the risk profile of current product offerings and mitigating capital and earnings volatility related to its closed block variable annuity businesses with increased hedging and the write-down of deferred acquisition costs.

ING U.S.'s ratings reflect the company's adequate statutory capitalization on the aggregate U.S. insurance operations including captives, large scale and solid business profile in retirement and individual life markets, and improving operating earnings performance within the core businesses. ING US has also improved the credit quality of its investment portfolio through reduced exposure to commercial mortgage backed securities (CMBS), subprime residential mortgage backed securities and alternative investments.

Fitch's ratings anticipate that a group rating approach for ING U.S. companies would be the most likely result of an IPO with all operating subsidiaries receiving a similar rating.

In the event that legal entity and/or product line restructuring occurs, individual companies receiving ongoing business lines with adequate capital profile and business outlooks could expect to be affirmed at current ratings levels. Those companies restructured to contain mainly runoff businesses/closed blocks could expect to be downgraded at least one notch depending on the resulting capital profile and business outlook.

The key rating triggers that could result in a downgrade include:

--A decline in reported RBC below 385%;

--Financial leverage exceeding 30%-35% resulting after the IPO;

--Significant adverse operating results;

--Further material reserve charges required in insurance/variable annuity books or a significant weakening of distribution channel or scale advantages.

The key rating triggers that could result in an upgrade include:

--Increased operating profitability and generation of consistent statutory capital;

--A reported RBC above 450%, and financial leverage below 25%;

--Private sale of closed block book at good value with boost to capitalization and reduction in volatility and risk;

--Acquisition of ING U.S. by a higher rated entity outside of IPO.

The rating actions are as follows:

Fitch has assigned:

ING U.S., Inc.

--Long-term IDR at 'BBB'; Rating Watch Evolving.

Maintain Rating Watch Evolving:

ING Life Insurance and Annuity Company

ING USA Annuity and Life Insurance Company

ReliaStar Life Insurance Company

ReliaStar Life Insurance Company of New York

Security Life of Denver Insurance Company

--Insurer Financial Strength (IFS) at 'A-'; Rating Watch Evolving.

Equitable of Iowa Companies, Inc.

--Long-term IDR at 'BBB'; Rating Watch Evolving.

Equitable of Iowa Companies Capital Trust II

--8.424% Trust preferred stock at 'BB'; Rating Watch Evolving.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Insurance Rating Methodology' (Sept. 22, 2011).

Applicable Criteria and Related Research:

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=651018

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Fitch Ratings
Primary Analyst, ING U.S.
Tana M. Higman, +1-312-368-3122
Director
Fitch, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Andrew Davidson, CFA, +1-312-368-3144
Senior Director
or
Primary Analyst (ING Verzekeringen and its subsidiaries) and Secondary Analyst (ING Group):
Marc-Philippe Juilliard, +33 (0)1 4429 91 37
Senior Director
Fitch France, 60, rue de Monceau 75008 Paris
or
Committee Chairperson
James Auden, +1-312-368-3146
Managing Director
or
Media Relations
Julia Belskaya von Tell, Moscow, +7 495 956 99 08
julia.belskayavontell@fitchratings.com

Source: Fitch Ratings