AM Best modifies Universal Life Insurance Co.’s credit ratings
AM Best has removed from under review with negative implications and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of Universal Life Insurance Co., following the San Juan-based firm’s efforts to secure capital through its parent company, Universal Insurance Co., they announced.
“The ratings reflect Universal Life’s balance sheet strength, which AM Best categorizes as adequate, as well as its strong operating performance, limited business profile and marginal enterprise risk management,” the ratings agency noted.
The removal of the ratings from under review is predicated on Universal Life securing access to capital through Universal Insurance Co., which has established a surplus note of $25 million with the option to issue additional notes up to $100 million.
Liquidity in general terms remains strong. The surplus note is earmarked for the liquidity needs of Universal Life, should it be needed. The capital raise plan, underwritten by The Phoenix Fund, was approved by the Puerto Rico Insurance Commissioner in December 2020, the insurer said.