AM Best Places Credit Ratings of Members of Columbian Financial Group Under Review With Developing Implications

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has placed under review with developing implications the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Ratings of “bb+” (Fair) of Columbian Mutual Life Insurance Company (Columbian) (Binghamton, NY) and Columbian Life Insurance Company (Chicago, IL), collectively referred to as Columbian Financial Group (CFG).

CFG focuses on the senior market with family solutions, pre-need, final expense and simplified issue term life insurance products. The group’s operations are conducted on a general agency plan in all 50 states, the District of Columbia and the U.S. Virgin Islands, with its core business focused mainly in small face amount life insurance markets with distribution through home sales, general agents and independent marketing organizations.

The under review with developing implications Credit Rating (rating) action reflects the recent announcement by Columbian that its board of directors has approved a strategic transaction with Constellation Insurance Holdings, Inc. (Constellation) that includes the sponsored demutualization of Columbian to a stock company with the issuance of all newly issued stock to Constellation. Constellation is an insurance holding company backed by two large Canadian institutional investors primarily engaged in the management of pension plans, Caisse de Dépôt et Placement du Québec and Ontario Teachers’ Pension Plan Board. The transaction provides for Constellation to invest up to $100 million to fund cash payments to eligible policyholders and significantly strengthen the capitalization of Columbian.

AM Best notes that despite the likely positive impact on capital from the planned transaction with Constellation, regulatory and policyholder approvals are still needed, with an anticipated closing date sometime during the first half of 2022. In the interim, further negative rating actions on CFG are possible if its risk-adjusted capitalization continues to decline prior to close of the transaction. AM Best will continue to monitor the group’s capitalization and operating performance over the near term, given the impact that the ongoing COVID-19 pandemic has had on 2020 and early 2021 results.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.