AM Best Assigns Credit Ratings to CL Life and Annuity Insurance Company

BY Business Wire | CORPORATE | 09/15/22 09:38 AM EDT

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has assigned a Financial Strength Rating (FSR) of B++ (Good) and a Long-Term Issuer Credit Rating (Long-Term ICR) of ?bbb+? (Good) to CL Life and Annuity Insurance Company (CL Life) (Fort Worth, TX). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect CL Life?s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

CL Life, which launched in August 2022, initially has been capitalized with approximately $10 million, and is projected to have the strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), with a low level of initial business and high reinsurance leverage in the first couple of years of operations. The company anticipates receiving additional funding to support the projected annuity business growth. CL Life expects its projected new business growth to be measured, ensuring that capital remains at targeted levels while maintaining adequate liquidity under their established asset-liability management framework. The company?s investment portfolio is expected to focus on investment-grade private corporate credit, as well as first-lien real estate mortgages, with an allocation higher than the industry average, relying on the investment expertise of the parent company, Crestline Investors, Inc.

CL Life does not have any established or projected market position as of yet, with a high degree of competition currently in the annuity marketplace as a headwind toward execution of its business plan.

This press release relates to Credit Ratings that have been published on AM Best?s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best?s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best?s Credit Ratings, Best?s Performance Assessments, Best?s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best?s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright ? 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Source: AM Best

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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