A.M. Best Co. released ratings updates. The following are some of the most recent:

CAMICO Mutual Insurance

A.M. Best Co. downgraded the financial strength rating (FSR) to B++ (Good) from A- (Excellent) and issuer credit rating (ICR) to "bbb" from "a-" of CAMICO Mutual Insurance Co. The outlook for both ratings is stable.

The rating downgrades are the result of the deterioration in CAMICO's operating performance and capitalization in 2008. The company was negatively impacted by late developments in older year claims, as well as growth in indemnity payments on current losses and increased incurred but not reported reserve allocations. In addition, CAMICO incurred adverse investment returns with realized and unrealized losses that were consistent with the general investment marketplace during the year. Overall, the combination of these factors led the company to a 30% reduction in policyholders' surplus.

Golden State Mutual Life Insurance Co.

A.M. Best Co. downgraded the ICR to "b" from "b+" and affirmed the FSR of C++ (Marginal) of Golden State Mutual Life Insurance Co. (GSM). The outlook for both ratings has been revised to negative from stable.

These rating actions reflect GSM's large decline in capitalization in 2008, consistent operating losses and high exposure to real estate as reflected in its significant investment in California commercial mortgage loans relative to its declining capital position.

Subsequently, A.M. Best has withdrawn the ratings at the company's request and assigned a category NR-4 to the FSR and an "nr" to the ICR.

SureTec Insurance Co.

A.M. Best Co. upgraded the FSR to A (Excellent) from A- (Excellent) and ICR to "a" from "a-" of SureTec Insurance Co. The outlook for both ratings is stable.

The rating actions reflect SureTec's strengthened capitalization and improved financial flexibility, which have been built on a foundation of continued low underwriting leverage, profitable underwriting results, strong cash flows, low asset leverage and conservative investment and reserving practices. Additional strengths for the ratings, which enhance the stability of the company's underwriting earnings, include SureTec's well-established producer/agency relationships, strong underwriting expertise in the contract surety market, and technological enhancements that boost risk management and support geographic and product diversification.

These positive factors are partially offset by SureTec's rapid growth prior to 2008, its somewhat limited historical experience and the risk factors associated with geographic and product expansion as the company grows its business. Nevertheless, SureTec has demonstrated its ability to create a sustainable underwriting and risk mitigation infrastructure, which supports its proven ability to manage its growth and generate strong operating returns.

Pacific International Insurance Ltd.

A.M. Best Co. affirmed the FSR of B+ (Good) and the ICR of "bbb-" of Pacific International Insurance Ltd. The outlook for both ratings is positive.

The ratings reflect PII's solid risk-adjusted capitalization, consistent operating profitability and corresponding strong surplus accumulation. The ratings also acknowledge the new reinsurance structure effective November 2008.


A.M. Best Co. downgraded the FSR to A (Excellent) from A+ (Superior) and ICR to "a+" from "aa" of the primary life/health subsidiaries of AEGON N.V.'s U.S. operations. AEGON's U.S. life/health companies are collectively referred to as AEGON USA. In addition, A.M. Best has downgraded the debt ratings to "a+" from "aa" of the outstanding notes issued under funding agreement-backed securities (FABS) programs sponsored by Monumental Life Insurance Co., a member of AEGON USA. The outlook for the FSR is stable, while the outlook for the ICRs and debt ratings is negative.

A.M. Best also downgraded the FSR to A (Excellent) from A+ (Superior) and ICRs to "a+" from "aa-" of Merrill Lynch Life Insurance Co. and ML Life Insurance Company of New York, which were acquired by AEGON USA at the end of 2007. The outlook for the FSR is stable, while the outlook for the ICRs has been revised to negative from stable.

The rating actions primarily reflect the substantial deterioration in AEGON USA's profitability and investment performance during 2008. In addition to investment related losses, AEGON USA's statutory and international financial reporting standards (IFRS) results were negatively impacted by the equity market downturn through higher required reserves on variable annuity guarantees and lower asset-based fee income. The rating actions also incorporate A.M. Best's expectation that AEGON USA's financial results will experience further pressure in 2009 due to the likelihood of additional investment losses, reserve increases and reduced fee income.

Penn Mutual Life Insurance Co.

A.M. Best Co. affirmed the FSR of A+ (Superior) and ICR of "aa-" of The Penn Mutual Life Insurance Co. and its subsidiary, The Penn Insurance and Annuity Co., jointly referred to as Penn Mutual. Concurrently, A.M. Best has affirmed the debt rating of "a" for $200 million 6.65% 30-year surplus notes due June 15, 2034, of Penn Mutual. The outlook for all ratings is stable.

The rating actions reflect Penn Mutual's diversified business profile, marketing a full array of life insurance products that include whole life, term life, universal life and variable universal life, together with a complimentary fixed and variable annuity product portfolio. Penn Mutual has a well-established affluent market presence developed through its focus on relationship-oriented producers. Life and annuity products are distributed through three distinct and complimentary distribution channels¬ócareer agents, independent financial networks and independent broker-dealers. Penn Mutual's subsidiary¬óJanney Montgomery Scott LLC, is a full service regional securities broker-dealer that provides a source of earnings diversification.

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