A.M. Best Downgrades Ratings of Texas Life Insurance Company

A.M. Best Co. has downgraded the financial strength rating to A- (Excellent) from A (Excellent) and issuer credit rating to "a-" from "a+" for Texas Life Insurance Company (Texas Life) (Waco, TX). The outlook for both ratings is stable. Texas Life’s ultimate parent is MetLife, Inc. (MetLife) (New York, NY) [NYSE: MET]. The ratings of MetLife and its key life/health subsidiaries are unchanged.

The downgrading of Texas Life’s ratings reflects MetLife’s intent to sell Texas Life in the near term, as MetLife no longer considers the company a strategic fit within its organization. A.M. Best historically viewed Texas Life’s role as a marketer of permanent individual life insurance policies sold at the workplace and marketed through MetLife and independent distributors as a strategic fit to MetLife. In addition, Texas Life has maintained very segregated operations from MetLife. Nevertheless, A.M. Best historically afforded lift to the ratings of Texas Life due to its affiliation with MetLife and its access to MetLife’s prominent investment management expertise, enterprise risk management strategies and implicit capital support. However, after conducting a thorough review of its operations in 2007, MetLife determined that Texas Life was no longer a strategic business.

Recently, A.M. Best learned of Wilton Reassurance Company’s (Plymouth, MN) intent to purchase Texas Life, pending regulatory approval, with an expected closing date during first quarter 2009. Therefore, A.M. Best has revised the ratings of Texas Life to a solely stand-alone basis; and thus, the ratings receive no credit enhancement from MetLife.

While Texas Life has some investment exposure to the industries and asset classes that currently are causing concern at many insurance companies, A.M. Best believes that write-offs relative to capital will be modest. A.M. Best also expects that the company’s target customer base largely will withstand the worst affects of the poor macroeconomic environment.

For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.