A.M. Best Revises Outlook to Negative for Issuer Credit Ratings of New York Life; Affirms Financial Strength Rating

A.M. Best Co. has revised the outlook to negative from stable and affirmed the issuer credit ratings (ICR) of "aaa" and long-term debt ratings of New York Life Insurance Company and its wholly-owned subsidiaries, New York Life Insurance and Annuity Corporation and NYLIFE Insurance Company of Arizona (collectively referred to as New York Life). Concurrently, A.M. Best has affirmed the financial strength rating of A++ (Superior) of New York Life. The outlook for the FSR is stable. All companies are headquartered in New York, NY...

The revised outlook for the ICRs and debt reflects the recent decline in New York Life's capitalization primarily due to losses on public and private equity investments and fixed income credit losses, as well as the potential for additional material credit losses within the group's general account investment portfolio. New York Life maintains significant holdings in mortgage-backed and asset-backed securities, which in aggregate were in a net unrealized loss position exceeding $5.5 billion at year-end 2008. Additionally, A.M. Best notes the group's considerable exposure to below investment grade bonds and commercial mortgage loans. Although A.M. Best believes New York Life's investment management capabilities are strong, the fact that high-yield default rates have increased substantially over the last 12-18 months and commercial mortgage delinquencies are beginning to materialize across the industry are key concerns in the near to medium term...

American Chronicle: A.M. Best Revises Outlook to Negative for Issuer Credit Ratings of New York Life; Affirms Financial Strength Rating