S&P Affirms Merit Life Insurance Co. 'AApi' Rtg

Business Wire, Nov 9, 1999

NEW YORK--(BUSINESS WIRE)--Standard & Poor's--

Nov. 8, 1999-- Standard & Poor's today affirmed its double-'Api' financial strength rating on Merit Life Insurance Co.

Merit Life Insurance Co. is a stock company based in Evansville, Ind. and licensed in 43 states, the District of Columbia and the U.S. Virgin Islands. It commenced operations in 1957. Its major lines of business are individual life, credit accident and health, credit life, and term life insurance, which it provides through the consumer finance network of American General Finance Corp. (counterparty credit rating single-'A'-plus), of which it is a subsidiary.

Although the company is a member of the American General group of companies, the rating does not include additional credit for implied group support.

     Major Rating Factors:

--   Company's capitalization is extremely strong, as indicated by
     Standard & Poor's capital adequacy ratio of more than 300%.
     Capital has increased in the past five year period at an average
     rate of 14%, to reach $381 million.

--   Liquidity is excellent, as measured by Standard & Poor's
     liquidity ratio of over 300%, which is supported by an investment
     portfolio mostly comprised of high-quality bonds (83.5%).

--   Operating performance is extremely strong, as measured by
     time-weighted average return on assets of 5.6%.

--   Premium revenues have displayed volatility in the past five
     years. 'Pi' ratings, denoted with a 'pi' subscript, are insurer
     financial

Strength ratings based on an analysis of an insurer's published financial information and additional information in the public domain. They do not reflect in-depth meetings with an insurer's management and are therefore based on less comprehensive information than ratings without a 'pi' subscript. 'Pi' ratings are reviewed annually based on a new year's financial statements, but may be reviewed on an interim basis if a major event that may affect the insurer's financial security occurs. Ratings with a 'pi' subscript are not subject to potential CreditWatch listings.

Ratings with a 'pi' subscript generally are not modified with 'plus' or 'minus' designations. However, such designations may be assigned when the insurer's financial strength rating is constrained by sovereign risk or the credit quality of a parent company or affiliated group, Standard & Poor's said.--CreditWire