A.M. Best Co. has placed the financial strength ratings (FSR) and issuer credit ratings (ICR) of Aon Corporation’s life/health subsidiaries, Combined Insurance Company of America (CICA) of Glenview, Ill., Combined Life Insurance Company of New York (CLICNY) and Sterling Life Insurance Company of Glenview, Ill. under review with negative implications.
Best said it took the actions in response to Aon’s announcement that it is considering “strategic options” for its life/health subsidiaries (See IJ web site Aug.1).
Best said the ratings would “remain under review pending further discussions with management regarding projected capitalization levels and ownership possibilities.”
However, Best indicated that CICA’s and CLICNY’s current ratings “are likely to be downgraded if a spin off occurs, and Sterling’s ratings will be dependent on capital support from CICA and CLICNY.”
In the event the companies were acquired, Best also said it would then “evaluate the financial strength of the new parent company, as well as CICA’s, CLICNY’s and Sterling’s overall fit within the new organization prior to determining if rating actions would be necessary.”
Best currently rates CICA and CLICNY with an FSR of “A” and an ICR of “a.” Sterling is rated “A-” and “a-.”
Best’s negative review takes a somewhat harsher stance than Fitch Ratings, which put them on its “Ratings Watch Evolving” list. Neither rating agency has indicated that the possible sale of the companies will affect Aon’s ratings.
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