S&P downgrades Security Benefit

Standard & Poor's said it lowered its counterparty credit and financial strength ratings on Security Benefit Life Insurance Co. to BBB+ from A and lowered its subordinated notes to BBB- from BBB+.

The ratings were removed from CreditWatch with negative implications, and the outlook is negative.

The downgrade reflects a reduction in the company's financial flexibility as a result of the Rydex transaction, S&P's expectation that investment losses will be significant relative to the company's capitalization and the agency's view that investment losses have exposed weaknesses in enterprise risk management.

The challenges facing the company are partially offset by a strong competitive position in the 403(b) market and operational strengths associated with se2, its third-party administration business, S&P added.

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