S&P affirms Americo Life

Standard & Poor's said it removed its BBB- counterparty credit rating on Americo Life Inc. and its A- counterparty credit and financial strength ratings on Americo Financial Life & Annuity Insurance Co. from CreditWatch, where they were placed with negative implications on Feb. 26, and affirmed them.

The outlook is negative.

The agency said it took these rating actions because of an expected improvement in Americo's capitalization. The company has implemented a capital plan, which includes the conversion to surplus of $60 million of surplus notes issued by United Fidelity Life Insurance Co. and held by Americo Life, the realization of $15 million of previously unrecognized tax benefits to be paid by its parent and a $25 million cash contribution from its parent to United Fidelity Life Insurance Co.

However, while the company has projected statutory earnings sufficient to replenish capital, S&P believes that the lower growth necessary to achieve this might have an adverse impact on the insurance company's business position, and the agency said there the use of earnings to replenish capital could potentially place additional pressure on the holding company's liquidity and ability to service its debt.

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