OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has commented that the Credit Ratings (ratings) of Employers Reassurance Corporation and Union Fidelity Life Insurance Company (both domiciled in Overland Park, KS) remain unchanged following the Jan. 16, 2018, announcement that General Electric Company (GE) [NYSE: GE] will contribute approximately $15 billion of statutory capital over a seven-year period to strengthen the long-term care reserves of these two insurance subsidiaries, which are collectively referred to as the ERAC Group. GE will also take a $6.2 billion after-tax GAAP insurance loss in the fourth quarter as a result of this ongoing review of its insurance legacy portfolio that began earlier in 2017.
A.M. Best notes that the ratings of the ERAC Group continue to be supported by the implicit and explicit capital support (evidence through capital maintenance agreements) provided by GE and that negative rating actions could occur if the financial strength of GE deteriorates.
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