(June 12 – 12:30 ET) – A.M. Best Co. has affirmed the A+ (Superior) financial strength rating of Transamerica Life Insurance Company of Canada and removed it from under review. The action follows Transamerica Life’s April 2000 acquisition of NN Life Insurance Company of Canada.

At the same time, Best has upgraded the rating of NN Life Insurance Company of Canada to A+ and removed it from under review. The upgrade reflects the planned amalgamation of the two companies, which should be completed by the end of 2000. The newly formed company will operate as Transamerica Life Canada.

The rating of Transamerica Life is based on its strategic role as the Canadian marketing arm of Aegon N.V.– its ultimate parent company — that is expected to maintain Transamerica Life’s current strong level of capitalization to support growth. Reflected in the rating are the expected benefits from the NN Life acquisition as well as an increased market position, improved profitability and low cost structure.

The acquisition–funded by its parent–has significantly improved Transamerica Life’s position in the individual life and investment product markets while increasing its economies of scale and enhancing its competitive position in products, systems and technology, distribution and customer service.

The company is well capitalized, which reflects its improving profitability and the financial support of Aegon N.V. Best expects the parent to maintain Transamerica Life’s capital at more than adequate levels to support its operating profile and investment mix. Although historical earnings are modest, due to new business growth, Best believes the company’s growing seg funds business, with its low cost structure and increasing expense efficiencies, will result in enhanced profitability.

Best believes Transamerica Life’s acquisition of NN Life will enable it to remain competitive in marketing traditional and universal life and investment products. Transamerica Life’s strategic alliances with mutual fund companies to market its seg funds are expected to generate continued growth in its investment products.
-IE Staff