Fitch lowers Genworth Life to BB+

Fitch Ratings said it downgraded the insurer financial strength ratings of Genworth Life Insurance Co., Genworth Life and Annuity Insurance Co. and Genworth Life Insurance Co. of New York to BB+ from BBB.

The outlook is negative.

Fitch said the action follows the announcement that Genworth Financial, Inc. will be suspending all sales of traditional life insurance and fixed annuity products in the first quarter of 2016. The company will continue to offer long-term care products.

As such, Fitch views Genworth Life and Annuity as a run-off entity and Genworth Life Insurance as a monoline long-term care company and downgraded the ratings accordingly.

The negative outlook reflects the company's dependence on regulatory approval for future long-term care rate increases and the potential for future long-term care reserve charges. Fitch believes the company's financial flexibility has deteriorated significantly and holding company liquidity will be constrained over the next several years, so it would difficult for the holding company to fund a capital contribution to the life companies, if one were required.

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