A.M. Best Comments on Under Review Status of Lincoln Benefit Life Company

A.M. Best has commented that the financial strength rating of A+ (Superior) and the issuer credit rating of “aa-” of Lincoln Benefit Life Company (LBL) (headquartered in Northbrook, IL) remain under review with negative implications following the announcement that TheAllstate Corporation (Allstate) (Northbrook, Il) [NYSE:ALL] has completed its previously announced sale of LBL to Resolution Life Inc. (Resolution Life) for approximately $587 million.

LBL had operated as Allstate’s marketing arm offering an array of life insurance and annuity products, and subsequently reinsuring the vast majority of the business to Allstate Life Insurance Company (ALIC) (Northbrook, IL). Immediately prior to closing, assets and insurance liabilities supporting business produced through the independent agent channel and deferred annuity products that previously were ceded to ALIC were recaptured by LBL.

The under review status reflects the uncertainty surrounding the new ownership, capital structure and business strategy of LBL following its acquisition by Resolution Life. It is A.M. Best’s understanding that Resolution Life is not rated by any other nationally recognized statistical rating organization. However, it is likely that a multi-level rating downgrade will occur at the completion of the full rating analysis, which is anticipated to be concluded in the near term. Previously, the ratings reflected the benefits derived from being affiliated with Allstate, along with the financial, reinsurance and operational support that policyholders historically had received, which is no longer in place.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

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