BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
NEW YORK—Standard & Poor's Corp. said Friday that it has placed its long-term counterparty-credit and financial-strength ratings and related issue ratings on all AAA-rated U.S. insurance groups on review with negative implications because of their significant holdings of U.S. Treasury and agency securities.
S&P recently placed the AAA long-term and A-1+ short-term sovereign credit ratings on the United States of America on CreditWatch with negative implications due to fears it would default if lawmakers and the White House cannot agree on a plan to raise the nation's debt ceiling.
The AAA-rated insurance groups affected by the move are:
• Knights of Columbus,
• New York Life Insurance Co.,
• Northwestern Mutual Life Insurance Co.,
• Teachers Insurance & Annuity Assn. of America,
• United Services Automobile Assn. and
• Goldman Sachs Mitsui Marine Derivative Products L.P., which offers over-the-counter derivative products.
“In addition, we placed the AA ratings on $5.75 billion of surplus notes issued by three of the affected insurers on CreditWatch,” S&P said in a statement. The short-term ratings of the companies remain unchanged, it said.
S&P said the five AAA-rated insurance groups—excluding GSMMDP—operate in the United States and have significant holdings of U.S. Treasury and agency securities.
Default risk small
“Investments in Treasury and agency securities represented 60% to 200% of total adjusted capital for each of the five groups at year-end 2010,” S&P said. “However, in the unexpected event of a U.S. default, we would expect these insurers' losses, if any, to be modest and manageable relative to capital.”
“We still believe that the risk of a payment default on U.S. government debt obligations as a result of not raising the debt ceiling is small, though increasing,” S&P said in the statement. “However, any default on scheduled debt service payments on the U.S.' market debt, however brief, could lead us to revise the long-term and short-term ratings on the U.S. to SD.”
Under S&P’s rating definitions, SD—or selective default—refers to a situation where an issuer, “the federal government in this case, has defaulted on some of its debt obligations, while remaining current on its other debt obligations.”