AM Best Removes From Under Review With Developing Implications and Affirms Credit Ratings of Fidelity Life Association, A Legal Reserve Life Insurance Company

AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Fidelity Life Association, A Legal Reserve Life Insurance Company (Fidelity Life) (Des Plaines, IL). Fidelity Life is a wholly owned subsidiary of Vericity, Inc. (Vericity). The outlook assigned to these Credit Ratings (ratings) is stable.

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

The rating actions follow the completed acquisition of Vericity by iA American Holdings, Inc., a subsidiary of iA Financial Corporation, Inc. on June 28, 2024. Fidelity Life will now operate as a wholly owned subsidiary as part of iA’s strategy to expand its U.S. operations. The acquisition is expected to extend the capabilities of Fidelity Life and eFinancial to make life insurance more accessible. AM Best expects earnings strain from future growth to be supported by capital contributions from iA Financial as needed.

Fidelity Life’s balance sheet is underpinned by its risk-adjusted capitalization, which is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Fidelity Life’s surplus level has been improved by executed capital contributions from iA Financial. However, the company’s operating performance is expected to be impacted by strategic actions that include changes to the commission structure as well as a recapture of business. Business profile and risk management characteristics are expected to be integrated over the next couple of years. Overall near and intermediate results will be monitored as integration efforts continue.

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 Performance Assessments, 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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