OLDWICK, N.J.–(BUSINESS WIRE)–AM Greatest has maintained the below evaluate with adverse implications standing for the Monetary Power Score of B+ (Good) and the Lengthy-Time period Issuer Credit score Score of “bbb-” of Common Life Insurance coverage Firm (San Juan, PR) (Common Life) following a reinsurance arbitration award.
This Credit score Score (ranking) motion displays a continuation of the below evaluate with adverse implications standing that was assigned on April 15, 2020, and was predicated on Common Life elevating capital to supply ample liquidity for its fixed-annuity enterprise presently reinsured by Personal Bankers Life & Annuity Co., Ltd. (PBLA).
This below evaluate standing relies on the elevated counterparty threat attributed to the fixed-annuity belongings maintained and held in belief by PBLA, a Bermuda-domiciled firm with direct ties to Greg E. Lindberg, who was convicted of wire fraud and bribery prices by a U.S. federal jury in March 2020.
Common Life was awarded a $524 million reinsurance arbitration award on June 2, 2020, with the arbitration panel ordering PBLA to fund absolutely a segregated belief account with cash for the only advantage of Common Life. Nevertheless, the account has not been funded and Common Life’s litigation staff has filed a lawsuit demanding that Lindberg uphold the contractual assure of the belief. The arbitration award is actually a good growth; nevertheless, AM Greatest stays involved in regards to the timing of the funding of the segregated belief account.
The scores will stay below evaluate till PBLA funds the segregated account with cash as per the quantity within the arbitration award together with Common Life executing its personal recapture of the PBLA belief funds and fascinating with a brand new reinsurance associate for its inforce fixed-annuity enterprise; or Common Group, Inc. completes the capital increase and offers extra help to Common Life as per the beforehand disclosed capital increase.
AM Greatest will proceed to have ongoing discussions with Common Life’s administration staff for updates on each the funding of the segregated account and the capital increase, which we anticipate decision on by the tip of the third quarter 2020.
These scores mirror Common Life’s steadiness sheet power, which AM Greatest categorizes as satisfactory, in addition to its robust working efficiency, restricted enterprise profile and marginal enterprise threat administration.
This press launch pertains to Credit score Rankings which were revealed on AM Greatest’s web site. For all ranking data referring to the discharge and pertinent disclosures, together with particulars of the workplace answerable for issuing every of the person scores referenced on this launch, please see AM Greatest’s Current Score Exercise net web page. For extra data concerning the use and limitations of Credit score Score opinions, please view Information to Greatest’s Credit score Rankings. For data on the right media use of Greatest’s Credit score Rankings and AM Greatest press releases, please view Information for Media – Correct Use of Greatest’s Credit score Rankings and AM Greatest Score Motion Press Releases.
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