Why babies born on Oct. 20 hit the jackpot and the financial woes of some government A-listers.
Fitch Ratings maintains United Teacher Associates Insurance Company and Continental General Insurance Company on Rating Watch Negative.
KEY RATING DRIVERS
Fitch downgraded the Insurer Financial Strength for both companies to 'BBB' and placed them on Rating Watch Negative on May 16, 2012, pending the results of an external actuarial study performed on long-term care reserves. Under Fitch's rating methodology, the strategic category for these companies is 'Limited Importance' as they are in run-off.
On Dec. 13, 2012American Financial Group (AFG) announced preliminary results of the actuarial study and on February 11, announced that fourth quarter 2012 results include a GAAP after-tax charge of $99 million related to loss recognition in the long-term care operations.
The ratings remain on Rating Watch Negative pending Fitch's review of the statutory impact of the reserve strengthening on capital and RBC. Fitch expects to complete its analysis as part of its annual review of all AFG ratings within the next 45 days.
The ratings could be downgraded further pending the results of the study, or deterioration in RBC to materially below 200 percent, without commensurate capital support from AFG.
Additional information is available at 'fitchratings.com'. The ratings above were unsolicited and have been provided by Fitch as a service to investors. The issuer did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.
Applicable Criteria and Related Research:
--'Insurance Rating Methodology' (Jan. 11,).
Insurance Rating Methodology -- Amended
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