Moody's affirms Security Benefit

Moody's Investors Service said it affirmed the Baa2 surplus note rating of Security Benefit Life Insurance Co. following the company's completion of its acquisition of Rydex Investments on Jan. 17.

The outlook remains negative.

The agency said that although the financing plan and allocation of ownership of Rydex between Security Benefit Life and Security Benefit Corp., its parent company, were not finalized at the time of the closing, it expected the group's consolidated financial leverage, debt service coverage and NAIC RBC ratios to remain within its original expectations. Security Benefit Life's strong niche position in 403(b) market and good capitalization and administrative capabilities were additional factors in the affirmation.

Moody's added that these strengths are somewhat offset by the group's weakened asset quality resulting from the significant increase in acquisition-related goodwill and intangible assets.

The negative outlook reflects the risks faced by the Security Benefit group of integrating Rydex into its operations while maintaining earnings and assets under management, the agency added.

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