OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has commented that the Credit Ratings (ratings) of MetLife, Inc. (MetLife) (headquartered in New York, NY) [NYSE:MET] and its insurance subsidiaries remain unchanged following the announcement that it will increase group annuity reserves between $525 million and $575 million on a pre-tax basis for unrecorded pension liabilities as part of its pension risk transfer (PRT) business.
Although the full-year 2017 net income impact is expected to be between $165 million and $195 million pre-tax, A.M. Best notes that MetLife has sufficient earnings capacity to absorb this charge, which is not expected to have a material impact on reported risk-adjusted capitalization ratios. While the charge has resulted in disclosure of a material weakness in MetLife’s internal control framework, A.M. Best believes this issue is confined to its PRT business segment only and not indicative of broader control risks throughout other business lines. Therefore, its ratings will remain unchanged at present. However, future disclosures relating to broader material weakness in its internal controls could result in a negative rating action, as would additional charges that materially impact MetLife’s level of risk-adjusted capitalization.
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