A.M. Best Places Ratings of First Investors Life Insurance Company Under Review With Developing Implications
A.M. Best Co. has placed under review with developing implications the financial strength rating (FSR) of A- (Excellent) and issuer credit rating (ICR) of “a-” of First Investors Life Insurance Company (FIL) (New York, NY).
The Independent Order of Foresters (Foresters) has entered into a definitive agreement to purchase all of the stock of FIL’s parent, First Investors Consolidated Corporation (FICC). The transaction is expected to close December 31, 2010. The companies involved in the purchase are FIL, First Investors Management Company, Administrative Data Corporation and First Investors Corporation. Foresters’ intends to operate FICC as an independent entity in the United States. In addition, the FSR of A (Excellent) and ICR of “a+” of Foresters are unchanged by the proposed acquisition of FIL.
FIL’s ratings will remain under review until the close of the purchase transaction, which is subject to regulatory approval and current capital restructuring. Additionally, the continuing volatility in the U.S. equity market could adversely affect FIL’s core separate account business.
The proposed acquisition of FIL will enable Foresters to enter into the U.S separate account business, as well as expand its life insurance business and distribution reach, and further augment new product offerings to its U.S.-based fraternal members. The asset management business of FICC as well as its middle market focus are strategic additions to Foresters’ evolving U.S. marketing strategy.
The principal methodologies 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 “Understanding BCAR for Life/Health Insurers.” Methodologies can be found at http://www.ambest.com/ratings/methodology.
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