A.M. Best Downgrades Ratings of Colonial Life Insurance Company (Trinidad) Limited

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has downgraded the financial strength rating to C (Weak) from B (Fair) and issuer credit rating to "ccc" from "bb" of Colonial Life Insurance Company (Trinidad) Limited (CLICO) (Trinidad & Tobago). The ratings remain under review with negative implications. CLICO is an insurance member company of CL Financial Limited (CL Financial), a diversified holding company based in Trinidad & Tobago.

These rating actions reflect the continuing uncertainty over the future of CLICO's fundamental life insurance and annuity businesses, as well as its inability to publish its financial results since the actions taken by the Central Bank of Trinidad & Tobago in January 2009.

A.M. Best notes that audited financial statements have not been filed for December 31, 2008 for CLICO and CL Financial. Additionally, as part of its investment strategy, CLICO maintains a high concentration in related party assets, including large holdings in the banking and financial services, energy and manufacturing sectors. Given current uncertain economic conditions, these assets are difficult to value. Moreover, given the fluid nature of the situation, A.M. Best has been unsuccessful in receiving updated information or satisfactory levels of dialogue with management.

The rating actions also take into consideration CLICO's delay in payment of certain financial obligations, especially premature annuity surrenders. A.M. Best believes that the business profile of the company has been diminished and its future direction is uncertain.

A.M. Best notes that the Government of the Republic of Trinidad & Tobago through the Central Bank of Trinidad & Tobago has committed to meet obligations to CLICO's Trinidad & Tobago third party policyholders. The Central Bank of Trinidad & Tobago also has publicly committed to a transformed CLICO in which existing and future policyholders' funds are safe.

The ratings will remain under review until A.M. Best can analyze the critical information it needs to conclude the rating process, including the review of year-end 2008 and current financial results. A.M. Best will continue to review the progress in restructuring CLICO's business model.

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

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

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.

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Source: A.M. Best Company