A.M. Best Places Liberty Bankers Life Insurance Company and American Benefit Life Insurance Company Under Review with Negative Implications

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has placed the financial strength rating (FSR) of B- (Fair) and the issuer credit ratings (ICR) of “bb-” of Liberty Bankers Life Insurance Company (Liberty Bankers) and its primary life insurance subsidiary, American Benefit Life Insurance Company(American Benefit), under review with negative implications. Both companies are domiciled in Edmond, OK.

The rating action primarily reflects A.M. Best’s concerns regarding the decline in absolute and risk-adjusted capitalization in 2010 as a result of a large dividend to its ultimate parent, Realty Advisors, Inc. (Realty Advisors), as well as Liberty Bankers’ elevated level of delinquent direct commercial mortgage loans. The under review status with negative implications also reflects the uncertainty of the current financial state of the real estate operations of Realty Advisors as 2010 financial statements for the organization are not yet available. A.M. Best notes that Realty Advisors has contributed a significant amount of capital since Liberty Bankers was purchased in 2004, which resulted in a considerable increase in capital and surplus levels prior to this most current period. The ratings of Liberty Bankers and American Benefit will remain under review pending further discussions with management on specific strategic initiatives that have been proposed to address capital issues and its exposure to the real estate operations of Realty Advisors.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Life and Health Insurers”; and “Rating Members of Insurance Groups.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2011 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Michael Adams, 908-439-2200, ext. 5133
Senior Financial Analyst
michael.adams@ambest.com
or
Thomas Rosendale, 908-439-2200, ext. 5201
Assistant Vice President
thomas.rosendale@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Source: A.M. Best Co.