The removal of the under review status reflects the recent acquisition of LBL by
The rating downgrades of LBL are reflective of a run-off company that is expected to maintain a strong capitalization profile, both on a risk-adjusted basis, as well as within Best's Capital Adequacy Ratio (BCAR). The company will manage the business based on a run-off business model utilizing a variable cost structure, which relies on outside third party administrators. This variable cost structure should allow the company to operate efficiently as the book of business matures. LBL has committed to limit the risk contained in the asset portfolio of its balance sheet, and while not focusing on higher yielding assets, the company's strategy is to position itself as a lower asset risk entity.
While LBL has committed to creating a very stable and low risk balance sheet, it is currently in the early stages of converting the management of its operations into a new business model, as it will still utilize
Positive rating actions are unlikely in the near term, as LBL has not yet fully transitioned into the new business model. Negative rating actions could occur if there are negative changes in LBL's capitalization and/or operating performance.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of
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