AM Best Affirms Credit Ratings of Merit Life Insurance Co.

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Merit Life Insurance Co. (Merit) (Austin, TX). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Merit’s balance sheet strength, which AM Best assigns as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

Merit’s balance sheet strength is bolstered by its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio. Merit’s fixed contingent deferred annuity product guarantees 5% distributions per year, for life, based on the greater of the contract holder’s investment portfolio account value on the date of issue or the exercise date. Contract holders must maintain a client account at one of Merit’s partner wealth management firms and be in an available investment portfolio accepted for protection by Merit. The contract holder’s protected investment portfolio is managed by the partner wealth management firms and in accordance with predetermined investment parameters, agreed to by Merit. Merit’s general investment account portfolio is expected to be diversified with favorable liquidity.

Merit’s operating performance has been assessed based solely on projections provided by Merit and include assumptions around expenses and income generation. Prospective earnings are expected to be derived primarily from fees earned on protected assets and are subject to market fluctuations. The company recently commenced sales.

AM Best views the business profile as limited based on the limited product offerings and distribution channels.

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 use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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.

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