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Best’s News & Research Service - April 16, 2015 02:03 PM (EDT)

A.M. Best Affirms Ratings of TD Reinsurance (Barbados) Inc.

  • April 16, 2015 02:03 PM (EDT)
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Oldwick //BestWire// - A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of "a+" of TD Reinsurance (Barbados) Inc. (TD Re) (Barbados). The outlook for both ratings is stable.

TD Re is a life reinsurer that is ultimately owned by The Toronto-Dominion Bank (TD Bank) (Toronto, Ontario). TD Re principally reinsures credit insurance policies underwritten by third-party life insurance carriers on consumer loans originated by its Canadian retail bank branches with future intentions of reinsuring policies underwritten in the United States.

The rating affirmations reflect TD Re's pattern of strong profitability, solid capitalization, strong liquidity and its conservative investment portfolio. Positively trending operating earnings reflect a steady increase in new business volume. Additionally, the ratings recognize the high credit quality of TD Re's investment portfolio, which provides good liquidity with a short duration that adequately matches its liability profile.

These strengths are partially offset by TD Re's historically high shareholder dividend payouts, which have tempered capital expansion, and a dependence on Canadian consumer loan originations for growth. While the overall operating fundamentals of TD Re remain strong, any decrease in consumer loan originations could impact TD Bank's ability to reinsure credit insurance, thus impacting TD Re's growth prospects.

Positive rating actions are unlikely in the near or intermediate term. Factors that may cause negative rating actions include a significant decline in the company's capitalization or business outlook, a decline in operating performance that impacts its business model or negative rating actions at TD Bank.

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:


  • Evaluating Non-Insurance Ultimate Parents

  • Understanding Universal BCAR

  • Risk Management and the Rating Process for Insurance Companies

  • Equity Credit for Hybrid Securities

This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best's Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.



Barbados Canada Life Reinsurance Ontario Life Insurers Press Release Insurance Life Insurance Best's Credit Rating Action


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