A.M. Best Places Ratings of Transamerica Life Canada and Canadian Premier Life Insurance Company Under Review With Developing Implications

A.M. Best has placed under review with developing implications the financial strength rating (FSR) of A- (Excellent) and the issuer credit rating (ICR) of “a-” of Transamerica Life Canada (TLC), and the FSR of A (Excellent) and the ICR of “a” of TLC’s subsidiary, Canadian Premier Life Insurance Company (CPL) (both domiciled in Toronto, Ontario, Canada). TLC is a wholly owned subsidiary of Aegon N.V. (Aegon) (Netherlands) [NYSE: AEG].

The ratings actions follow the recent announcement that Aegon has reached an agreement with Wilton Re Limited (Wilton Re) (Halifax, Canada) to sell its Canadian operations, including TLC and CPL, for CAD 600 million (EUR 423 million). The parties anticipate that the transaction will close in the first quarter of 2015, subject to regulatory approval.

The ratings of TLC and CPL currently reflect the ratings enhancement derived from the overall creditworthiness and historical financial support received from Aegon. The under review status reflects A.M. Best’s belief that the companies will be able to continue their current strategy of marketing life insurance, savings and retirement products to the Canadian middle market with the support of its new parent company. A.M. Best notes that the transaction is being funded through cash contributions by Wilton Re’s ultimate parent, the Canada Pension Plan Investment Board.

The ratings will remain under review pending completion of the transaction, during which time A.M. Best will review the transaction's integration, structure effect and discuss the strategic fit with Wilton Re’s management. If A.M. Best determines that TLC and CPL are not viewed as strategically important to Wilton Re, then the ratings would be negatively impacted.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Rating Members of Insurance Groups

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