A.M. Best Upgrades Ratings of Louisiana Dealer Services Insurance, Inc.’s Subsidiaries

A.M. Best Co. has upgraded the issuer credit rating (ICR) to “bbb+” from “bbb” and affirmed the financial strength rating (FSR) of B++ (Good) of First Assurance Life of America and Performance Life of America. A.M. Best also has upgraded the FSR to B++ (Good) from B+ (Good) and the ICR to “bbb” from “bbb-” of Versant Life Insurance Company (Jackson, MS). These companies’ ultimate parent is Louisiana Dealer Services Insurance, Inc. (LDS), and the subsidiaries are collectively referred to as LDS life subsidiaries The outlook for all ratings is stable. All companies are domiciled in Baton Rouge, LA, unless otherwise specified.

The upgrading of the ICRs for the LDS life subsidiaries reflects their favorable level of risk-adjusted capitalization, consistent earnings over a five-year period and high credit quality and liquid investment portfolios. The conservative investment strategy has allowed these companies to weather the financial crisis with very modest investment losses.

The rating actions also recognize the integrated nature and earnings contribution these companies make to LDS. The ratings also acknowledge the group’s synergies, common management and opportunities to market its credit life and disability insurance products, along with the companion property/casualty product portfolio to automobile dealerships, and to a lesser extent, consumer financing.

While LDS life subsidiaries’ capitalization and earnings remain favorable, A.M. Best believes their business profile will remain challenged. The group is subject to macroeconomic and regulatory pressures, as well as competitive pressures from larger, more diversified credit insurers, which may continue to limit their growth opportunities. The life group also has very limited geographic diversity with operations in only two states.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at http://www.ambest.com/ratings/methodology.