As it is getting a bit crazy in the financial markets and there has been a fresh surge of rating down grades, i'll be introducing a page here on The Settlement Channel devoted entirely to the credit ratings of both current life insurance companies writing structured settlements, but also those of companies that use to write structured settlements such as AEGON, Mass Mutual, ING, Genworth, Canada Life, etc.
One of the biggest areas of concern among annuitants, plaintiffs, courts and other beneficiaries are the regular headlines that pop up in the financial press that announce credit downgrades, rating changes and other news that elevates anxiety among this vulnerable group of annuitants.
Most often you'll find that the rating change, while a concern on it's face, is just a reflection of temporary business conditions at a company that needed to be addressed, such as the failure of a particular product line, over exposure in one area of investment or lending or quite simply poor management decisions that are being addressed by a new management team. It's important for people to realize that life insurance companies that are rated A or better have an exceptional record of safety and financial integrity and unlike the banking industry which has seen 16 banks taken over by the FDIC so far this year we have yet to see a major life insurance company really run into any sort of serious trouble.
Obviously, the concerns surrounding AIG make everyone paranoid, particularly when Fed Chairman continues to use terms such as " Financial Contagion" when discussing the risk of a systemic failure to a wide chain of firms if AIG isn't continuously propped up by the Fed. However, as we have discussed repeatedly on this blog and in our weekly broadcasts, the AIG life companies are well run, stable, sufficiently capitalized entities that eventually will likely be purchased by another company as AIG goes through this painful dissembling.
The companies currently writing structured settlement annuities that will be covered starting tomorrow will be:
New York Life
Prior companies that wrote structured settlements and still have substantial blocks of structured settlement annuities on their books are:
AEGON, which will include Transamerica Life and Monumental Life.
Genworth, which will include First Colony, Mayflower and GE Life.
Mass Mutual Life Insurance.
Obviously we won't move them up or down the same day the agency does, but we will keep a current list and summary of the key agencies, which I deem to be S&P and A.M. Best. I realize Moody's and Fitch have value but for the purpose of this summary we will run with what I consider to be the two big dogs of life insurance company rating so people can see where their life company ranks and what the movement is.
Watch for this on a seperate page here at the Settlement Channel starting March 6th.