Fitch Maintains Negative Watch on Continental General Insurance & United Teacher Associates

CHICAGO--()--Fitch Ratings maintains United Teacher Associates Insurance Company and Continental General Insurance Company on Rating Watch Negative.

KEY RATING DRIVERS

Fitch downgraded the Insurer Financial Strength for both companies to 'BBB' and placed them on Rating Watch Negative on May 16, 2012, pending the results of an external actuarial study performed on long-term care reserves. Under Fitch's rating methodology, the strategic category for these companies is 'Limited Importance' as they are in run-off.

On Dec. 13, 2012 American Financial Group (AFG) announced preliminary results of the actuarial study and on February 11, announced that fourth quarter 2012 results include a GAAP after-tax charge of $99 million related to loss recognition in the long-term care operations.

The ratings remain on Rating Watch Negative pending Fitch's review of the statutory impact of the reserve strengthening on capital and RBC. Fitch expects to complete its analysis as part of its annual review of all AFG ratings within the next 45 days.

RATING SENSITIVITIES

The ratings could be downgraded further pending the results of the study, or deterioration in RBC to materially below 200%, without commensurate capital support from AFG.

Additional information is available at 'www.fitchratings.com'. The ratings above were unsolicited and have been provided by Fitch as a service to investors. The issuer did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.

Applicable Criteria and Related Research:

--'Insurance Rating Methodology' (Jan. 11, 2013).

Applicable Criteria and Related Research:

Insurance Rating Methodology -- Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=698731

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Contacts

Fitch Ratings
Primary Analyst
Martha M. Butler, CFA
Senior Director
+1-312-368-3191
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Douglas M. Pawlowski, CFA
Senior Director
+1-312-368-2054
or
Committee Chairperson
Mark E. Rouck, CFA
Senior Director
+1-312-368-2085
or
Media Relations:
Brian Bertsch, +1-212-908-0549 (New York)
brian.bertsch@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Martha M. Butler, CFA
Senior Director
+1-312-368-3191
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Douglas M. Pawlowski, CFA
Senior Director
+1-312-368-2054
or
Committee Chairperson
Mark E. Rouck, CFA
Senior Director
+1-312-368-2085
or
Media Relations:
Brian Bertsch, +1-212-908-0549 (New York)
brian.bertsch@fitchratings.com