SBLIC began a funding agreement program during 1998 as a convenient way to diversify its product offerings and leverage its spread management expertise and solid capital position.
SBLIC reported total admitted assets and adjusted surplus of $7.
The primary operating company, SBLIC
, reported statutory admitted assets of $9.
Although SBLIC impaired a large portion of the securities that account for its most risky asset exposure, specifically asset-backed securities backed by subprime mortgages, Fitch expects further significant losses to materialize in this and other segments of the company's investment portfolio in the coming quarters.
Fitch's ratings on SBLIC have historically been heavily supported by the company's strong capital position, the foundation of which was a diversified, highly liquid investment portfolio.
has no near-term refinance risk associated with its outstanding debt, which consists of $150 million of surplus notes.
At year-end 2007, SBLIC
reported a company action level Risk-Based Capital ratio of 740%.
Fitch currently expects to downgrade the IFS ratings on SBLIC
and FSBLIANY by one notch to 'A' and affirm SBLIC
's 'F1' short-term IFS rating following the close of the transaction.
has experienced lower profitability in recent years as the spread margins on its fixed products and fixed-rate options on its variable products compressed in the low interest rate environment.
Fitch's 'AA-' insurer financial strength rating on SBLIC
and its subsidiary, First Security Benefit Life Insurance and Annuity Company of New York (First Security Benefit Life of NY), and its 'F1+' short-term insurer financial strength rating on SBLIC
are not affected by today's rating action.
In addition, Standard & Poor's lowered its short-term counterparty credit and financial strength ratings on SBLIC
to 'A-1' from 'A-1+' and lowered its subordinated debt ratings on SBLIC
's outstanding $50 million 8.
is part of the Security Benefit Group (SBG), which is a financial services organization marketing fixed and variable annuities, mutual funds and retirement plans.