A.M. Best Co., Fitch Ratings, Standard & Poor’s, and Moody’s Investors Service released ratings updates. The following are some of the most recent:


BancInsure Inc.

A.M. Best removed from under review with negative implications and affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit rating of “a-” of BancInsure Inc. Both ratings have been assigned a stable outlook.

The ratings were placed under review with negative implications on March 20, 2009 following BancInsure’s net loss for 2008 and unrealized investment losses, which, combined, produced a $16.1 million or 36% erosion in shareholders’ equity in 2008.

BancInsure’s ratings reflect that its risk-based capital position has been replenished by a significant capital contribution; thus, recognizing the financial strength and support of its investors, according to A.M. Best. Through April 30, 2009, BancInsure results demonstrate improvements in underwriting performance, and in its investment portfolio while showing a reduction in the company’s allocation to equities.


Fairfax Financial Holdings Ltd. and its Subsidiaries

A.M. Best affirmed the ICR of "bbb" and the unsecured debt ratings of Fairfax Financial Holdings Ltd. A.M. Best also affirmed the FSR of A (Excellent) and ICRs of “a” of Crum & Forster Insurance Group and Seneca Insurance Group, both wholly owned subsidiaries of Fairfax. Additionally, A.M. Best affirmed the ICR of “bbb” and the unsecured debt ratings of Crum & Forster Holdings Corp.

Concurrently, A.M. Best affirmed the FSR of B+ (Good) and ICR of “bbb-” and the FSR of B++ (Good) and ICR of “bbb” of TIG Insurance Group and Fairmont Specialty Group (both of Texas), respectively, which are both in run off. The outlook for all ratings is stable.

The ratings of Crum & Forster reflect its role within Fairfax, its strong risk-adjusted capital levels, proven opportunistic underwriting strategy (particularly in underserved markets) and management’s commitment to reduce the group’s property catastrophe exposure to improve overall profitability, according to A.M. Best. Significantly reduced legacy issues, including the commutation of most finite reinsurance contracts and the resolution in 2008 of its largest outstanding asbestos claim, also lends to the group’s profitability prospects going forward.

Investors Heritage Life Insurance Co.

A.M. Best affirmed the FSR of B+ (Good) and ICR of “bbb-” of Investors Heritage Life Insurance Co. Additionally, A.M. Best affirmed the ICR of “bb-” of its holding company, Investors Heritage Capital Corp. The outlook for all ratings is stable.

The ratings reflect Investors Heritage Life’s adequate level of risk-adjusted capitalization and historically stable operating profitability. At year-end 2008, risk-adjusted capitalization declined due to a loss of absolute capital and surplus. This loss in capital and surplus was driven by the net loss in realized capital losses, which is attributable to other-than-temporary impairments in the investment portfolio. However, net operating earnings have remained positive over the last five years.

Lincoln National Corp.

A.M. Best assigned a debt rating of “a-” to Lincoln National Corp.’s recent issuance of $500 million 8.75% 10-year senior unsecured notes. The outlook for the rating is negative. The existing financial strength, issuer credit and debt ratings of Lincoln and its life/health insurance subsidiaries are unchanged.

The issuance of these notes is part of Lincoln’s recent capital-raising initiative, which included a $600 million common share offering as well as the company’s intention to issue approximately $950 million of preferred stock pursuant to the U.S. Treasury’s Capital Purchase Program. A.M. Best expects about $1 billion of the debt and equity proceeds to be downstreamed to Lincoln’s life/health insurance subsidiaries, with the remainder to be retained at the holding company for financial flexibility.


National Financial Group, its Members and National Life Insurance Co.

A.M. Best downgraded the FSR to B++ (Good) from A- (Excellent) and ICR to “bbb” from “a-”of National Financial Group (NFG) and its members. The group consists of National Insurance Co. and National Group Insurance Co. Concurrently, A.M. Best has downgraded the FSR to B++ (Good) from A- (Excellent) and ICR to “bbb+” from “a-” of National Life Insurance Co. The outlook for all ratings is negative.

These rating actions for NFG’s are the result of its continued poor operating performance, surplus erosion and geographic concentration of risk. While management has taken several initiatives to protect policyholders and its capital position, including a capital infusion, enhanced data management and the development of a solid reinsurance program, the group has failed to achieve expected underwriting results in recent years, with a continued weak performance projected for 2009.


New York Life Insurance Co.

New York Life Insurance Co. announced that four rating agencies have recently affirmed the company’s highest possible ratings for financial strength. Standard & Poor’s affirmed its AAA financial strength rating on New York Life, which followed recent similar actions by Moody’s Investors Service (Aaa), Fitch Ratings (AAA) and A.M. Best (A++).

According to the insurer, highlights from the rating agencies’ comments in affirming the ratings include:

Standard & Poor’s – Rating of AAA
• Noted the exceptional quality of the company's career agency force, its very strong risk based capital position, operating earnings, and growing presence in international markets

Moody’s – Rating of Aaa
• Noted New York Life's continued leading position in the U.S. life insurance market, as well as on its significant financial flexibility and operational scale, earnings diversity, very strong liquidity and outstanding capitalization

Fitch – Rating of AAA
• Noted New York Life’s very strong capital position and capital adequacy

A.M. Best – Rating of A++
• Noted New York Life’s leading market position in U.S. life insurance


NYMAGIC Inc. and its Subsidiaries

A.M. Best affirmed the FSR of A (Excellent) and ICR of “a” of New York Marine Group. The ratings also apply to the two members of the group, New York Marine and General Insurance Co. and Gotham Insurance Co. A.M. Best also affirmed the FSR of A- (Excellent) and ICR of “a-” of Southwest Marine and General Insurance Co., which was formed in 2006 to write excess and surplus lines for the group. Concurrently, A.M. Best affirmed the ICR of “bbb” and the debt rating of “bbb” of the $100 million, 6.5%, senior unsecured bonds due 2014 issued by the publicly traded parent company, NYMAGIC, Inc. The outlook for all ratings is stable.

The ratings reflect NY Marine’s solid capitalization, derived from historically conservative underwriting leverage, strong history of operating earnings, management’s efforts to decrease its catastrophe exposure, proven ability to quickly adapt to changing market conditions and a strong market niche in its core marine business line.


The Northwestern Mutual Life Insurance Co.

Fitch Ratings affirmed the “AAA” insurer financial strength (IFS) rating of The Northwestern Mutual Life Insurance Co. (NM) and Northwestern Long Term Care Insurance Co. The rating outlook is stable.

Fitch's ratings reflect NM's strong competitive position in the U.S. life insurance market and exceptionally strong balance sheet fundamentals. Fitch considers NM's key competitive advantages to include its successful distribution system, large and stable block of traditional life insurance, and focus on expense control. NM's exposure to variable annuity risk is minimal due to the relatively small size of its variable annuity business and the lack of living benefit guarantees.


TIAA and TIAA-CREF Life Insurance Co.

Fitch Ratings affirmed the 'AAA' IFS ratings of Teachers Insurance and Annuity Association of America (TIAA) and its wholly owned subsidiary, TIAA-CREF Life Insurance Co. (TIAA-CREF Life). The Rating Outlook has been revised to negative from stable. At the same time, Fitch has downgraded the guaranteed senior debt rating of TIAA Global Markets Inc. to 'AA+' from 'AAA', reflecting greater weighting of the subordinated nature of the guarantee in connection with the outlook revision.

These rating actions follow Fitch's updated review of TIAA's capitalization, liquidity, financial flexibility and operating results.

The negative outlook reflects Fitch's concern about potential investment losses given the company's large unrealized loss position relative to total adjusted capital (TAC). TIAA has significant exposure to structured securities, particularly commercial mortgage backed securities (CMBS), which account for over half of the company's unrealized losses. This, together with a large commercial mortgage portfolio, exposes the company to potential weakness in the commercial mortgage sector in the ongoing difficult economic environment.

The affirmation of TIAA's IFS ratings recognizes TIAA's extremely strong risk-adjusted capitalization, the ability of the company to offset investment losses through strong statutory operating earnings, an exceptionally stable liability structure and the existence of hidden capital through reserve conservatism.

Western & Southern Financial Group

Fitch Ratings has downgraded the Issuer Default Rating (IDR) of Western & Southern Financial Group (W&SFG) to “AA-“ from “AA” and the IFS ratings to “AA” from “AA+” for W&SFG's wholly owned life insurance subsidiaries. The rating outlook is stable.

The rating actions reflect Fitch's view that the volatility associated with W&SFG's total adjusted capital, which declined 17% as a result of the challenging economic environment, does not align with the prior rating rationale. Additionally, Fitch believes W&SFG's capital will continue to be under pressure from further investment losses particularly given its exposure to common and preferred stock, which is highly concentrated in the financial sector, and residential mortgage-backed securities.

The Stable Outlook reflects Fitch's view that further investment losses are manageable in the context of W&SFG's still very strong capital position and earnings profile. Fitch notes that W&SFG has approximately $430 million in cash and invested assets held at the holding company on Dec. 31, 2008, which could be contributed to the insurance operating companies to bolster capital if needed.

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