Life Settlement News

A new association has formed to transfer longevity and mortality-related risk to the capital markets in the same way that some of the world’s biggest perils, such as hurricanes and earthquakes, are protected against by shifting the risk to investors via catastrophe bonds.

Fitch Ratings does not expect that the National Association of Insurance Commissioners’ (NAIC) efforts to address issues in its Risk Based Capital (RBC) formula related to downgraded residential mortgage-backed securities (RMBS) will ultimately have a material impact on Fitch’s analysis or the ratings of U.S. life insurance companies. While Fitch reviews the NAIC RBC ratio as part of its ratings analysis, Fitch believes its review of insurer capital strength will not be materially impacted by the adjustments expected by the NAIC because Fitch takes a multi-faceted approach to capital analysis as compared to that used by regulators.

Fitch Ratings has affirmed the Insurer Financial Strength (IFS) ratings of Genworth Financial Inc.‘s (GNW or holdco) primary U.S. life insurance companies (GNW-Life) at ‘A-’. The Rating Outlook remains Negative. A full rating list is shown below. The affirmation follows an updated review of GNW’s investment exposures, capital position, liquidity and interim financial performance, and reflects Fitch’s view that these key ratings factors remain consistent with expectations for the current rating. Fitch notes that the company has taken a number of positive steps this year to improve its financial flexibility and strengthen its capital position, including the successful partial IPO of its Canadian mortgage insurance business for $705 million of proceeds, and a recently completed equity raise of $621 million.

Massachusetts Mutual Life Insurance Co., one of the best-capitalized U.S. life insurers going into last year’s market slide, lost its coveted triple-A financial-strength rating from Standard & Poor’s Ratings Services.

The Lifetrade Fund B.V., has received a Standard & Poor’s Credit Quality rating as a life settlement investment fund. Lifetrade is the first open-ended fund to receive such a rating from Standard & Poor’s in the secondary life insurance market.

Standard and Poor’s Ratings Services has raised its outlook on TARP recipients The Hartford (Conn.) Financial Services Group and Lincoln National Corp.

Three life and health insurers have become financially “impaired” so far this year and more carriers are expected to follow, according to a report by A.M. Best.

A number of insurers saw their risk-based capital ratios and statutory surplus levels soar last year because of accounting breaks they received from their respective state regulators, according to a new report from Moody’s Investors Service.

Phoenix Cos. Inc. has pulled its application to participate in the U.S. Treasury’s Capital Purchase Program, which has allocated the lion’s share of the $700 billion Troubled Asset Relief Program, after federal regulators took control of the life insurer’s recently acquired savings and loan.

Legal & General Group Plc, the U.K.‘s third-largest insurer, has a solution to the problem of aging: high-yield corporate bonds.

Four months ago it took over a $475 million pension fund at Smiths Group Plc, betting it can improve returns enough to pay off 7,000 pensioners and turn a profit. Smiths, the world’s biggest maker of airport bomb detectors, was happy to rid itself of what insurance companies call ``longevity risk.’’ Longer life expectancies mean a 65-year-old man in Britain will probably live to 82 and claim payments until 2025.