MOODY'S ASSIGNS Aa3 INSURANCE FINANCIAL STRENGTH RATING TO PACIFIC LIFE & ANNUITY COMPANY
Moody's Investors Service has assigned a Aa3 insurance financial strength rating to Pacific Life & Annuity Company (Pacific Life & Annuity), a wholly-owned subsidiary of Pacific Life Insurance Company (Pacific Life, Aa3 insurance financial strength rating). The rating outlook for both companies is stable.
The rating reflects Pacific Life & Annuity's strategic importance to Pacific Life, as evidenced by a substantial capital contribution and close name identification. Pacific Life & Annuity is in the process of entering the life, annuity and investment products market in New York state, a geographic area in which Pacific Life has not been represented. In New York, Pacific Life & Annuity will be marketing products similar to the ones its parent does in the remainder of the U.S., targeting the same markets and using the same distribution channels.
Pacific Life & Annuity, which until recently has been known as PM Group Life Insurance Company, also operates as a life and health carrier for labor-management groups, unions and small- to mid-size corporate employer groups, and markets stop loss coverage for self-funded employers. In May 1999, the company announced plans to expand its product portfolio to include worksite marketing of group specialty coverages.
According to Moody's, the parent company's rating reflects its established market position in variable and universal life, annuities, and group pensions and institutional products, its strong asset management capabilities, its prudent asset/liability management and good capitalization. These strengths are somewhat offset by asset/liability management and liquidity risks arising from issuing GICs and short-term funding agreements, a separate account business that earns a lower return on assets, and the aggressive expansion of the variable annuity business subject to equity market fluctuations and intense competition.
Pacific Life & Annuity, domiciled in Arizona and headquartered in Newport Beach and Fountain Valley, California reported statutory assets of $331 million and statutory capital of $92 million as of March 31, 1999. In connection with Pacific Life & Annuity's entry into the New York market, Pacific Life added $97 million of additional capital to the company in June 1999. Pacific Life reported statutory assets of $40 billion and statutory capital of $1.5 billion as of March 31, 1999, and is among the twenty largest life insurance companies in the U.S. when ranked by assets.
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