A.M. Best Maintains Under Review Status on Ratings of The Phoenix Companies, Inc. and Its Subsidiari
Mar 19th 2013 3:35PM
Updated Mar 19th 2013 3:42PM
A.M. Best Maintains Under Review Status on Ratings of The Phoenix Companies, Inc. and Its Subsidiaries
OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. is maintaining the under review with negative implications status on the financial strength rating (FSR) of B+ (Good) and issuer credit ratings (ICR) of "bbb-" of the subsidiaries of The Phoenix Companies, Inc. (Phoenix) (Hartford, CT) (NYS: PNX) . A.M. Best also is maintaining the under review with negative implications status on the ICR of "bb-" of Phoenix.These rating actions follow the company's recent announcement of an additional delay in the filing of its third quarter and full-year 2012 GAAP financial statements. (See below for a detailed listing of the companies.)
In November 2012, Phoenix made its initial announcement regarding the delayed filings as it would be restating previously issued GAAP financial statements for the years ended December 31, 2011, 2010 and 2009, the interim periods for 2011 and the first and second quarters of 2012.
To date, the impact of the correction of errors identified and quantified in the restatement of prior periods has not had a material impact on Phoenix's GAAP equity as of its last filing date of June 30, 2012. Additionally, although not anticipated at this time, the newly announced delay and potential impact of additional adjustments to consolidated stockholders' equity and consolidated cash and cash equivalents could be material and adverse. Moreover, in Phoenix's press release dated March 15, 2013, management believes it has identified multiple material weaknesses in its internal controls over financial reporting and is continuing to assess its disclosure controls and procedures.
A.M. Best has received and reviewed the group's unaudited statutory statements as of December 31, 2012. A.M. Best notes that Phoenix plans to provide an update on the restatement on or before April 30, 2013.
A.M. Best will continue to monitor developments regarding Phoenix's restatement and filings, including holding discussions with management regarding any additional errors found and/or potential changes in the materiality of any adjustments or processes before concluding on the under review status.
The FSR of B+ (Good) and ICRs of "bbb-" remain under review with negative implications for the following subsidiaries of The Phoenix Companies, Inc.:
- Phoenix Life Insurance Company
- PHL Variable Insurance Company
- Phoenix Life and Annuity Company
- American Phoenix Life and Reassurance Company
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Co.
Kate Steffanelli, 908-439-2200, ext. 5063
Senior Financial Analyst
Ken Johnson, CFA,908-439-2200, ext. 5056
Managing Senior Financial Analyst
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
KEYWORDS: United States Europe North America Connecticut New York
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