A.M. Best Comments on the Sale of PEMCO Life Insurance Company [Professional Services Close – Up]

A.M. Best Co. has commented that the financial strength rating (FSR) of B+ (Good) and issuer credit rating of "bbb-" of PEMCO Life Insurance Company (PEMCO Life) are unchanged following the announcement that PEMCO Mutual Insurance Company (PEMCO) (both domiciled in Seattle, WA) has entered into a definitive agreement for the sale of PEMCO Life to Sagicor Life Insurance Company (Sagicor) (Austin, TX).

The planned sale is expected to be completed sometime during the first half of 2012 pending approval from the Washington State Office of the Insurance Commissioner.

A.M. Best believes that PEMCO Life's operations will remain essentially unchanged under its new ownership and that Sagicor will provide financial support if necessary. The continuation of the ratings reflects the fact that Sagicor's FSR of A- (Excellent) is the same as PEMCO's. In the interim, PEMCO will continue to support PEMCO Life until the sale is completed. Sagicor's FSR is unaffected by this transaction, which is expected to add scale through the acquisition of approximately 10,000 term and whole life insurance policies.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: "Understanding BCAR for Life/Health Insurers" and "Risk Management and the Rating Process for Insurance Companies." Best's Credit Rating Methodology can be found at ambest.com/ratings/ methodology.

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