A.M. Best Places Ratings of AIG Subsidiaries Merit Life and Yosemite Under Review with Developing Implications

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has placed under review with developing implications the financial strength rating (FSR) of A- (Excellent) and issuer credit rating (ICR) of “a-” of Merit Life Insurance Company (Merit Life) (Evansville, IN). Additionally, A.M. Best has placed the FSR of A (Excellent) and ICR of “a” of Yosemite Insurance Company (Yosemite) (Evansville, IN) under review with developing implications. Both companies are indirect, wholly owned subsidiaries of American General Finance, Inc. (AGF), whose ultimate parent is American International Group, Inc. (AIG) (New York) (NYSE: AIG). All ratings of AIG and its other subsidiaries are unaffected by these rating actions.

The rating actions follow AIG’s announcement on August 11, 2010 that a definitive agreement was entered into, under which 80% interest in AGF is being sold to Fortress Investment Group LLC (NYSE: FIG). The under review with developing implications status reflects the potential for a change in the rating and/or rating outlook based on the outcome of A.M. Best’s discussions with management and the close of the transaction; however, the direction of the change cannot be determined based on the information A.M. Best has received to date. The rating will remain under review pending discussions with Fortress management, A.M. Best’s assessment of the transaction and its effect on these two regulated insurers. This proposed transaction is expected to close some time in the first quarter of 2011 and is subject to customary regulatory approvals.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Understanding BCAR for Property/Casualty Insurers”; “Understanding BCAR for Life and Health Insurers”; “Equity Credit for Hybrid Securities”; and “A.M. Best’s Ratings & the Treatment of Debt.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

CONTACT:

A.M. Best Company
Analysts
Jennifer Marshall—P/C, 908-439-2200, ext. 5327
jennifer.marshall@ambest.com
or
William Pargeans—L/H, 908-439-2200, ext. 5359
william.pargeans@ambest.com
or
Public Relations
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com

KEYWORDS:   United States  Europe  North America  Indiana  New Jersey

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