ADA Members Insurance Programs' companies 'very strong,' ratings say
The full financial strength of the Great-West Life & Annuity Insurance Co. stands behind its insurance certificates issued to participants in the ADA Members Insurance Programs, according to James Biesterfelt, the programs' vice-president and account executive.Industry ratings high for both Great-West and AXA Equitable
Great-West Life & Annuity Insurance Co.'s current ratings, which have been in effect since July 2003:
• A.M. Best Co. Inc.: A+ (Superior; highest of 10 categories) for financial strength, operating performance and business profile.
• Fitch Ratings: AA+ (Very Strong; second highest of nine categories) for financial strength.
• Moody's Investors Service: Aa3 (Excellent; second highest of nine categories) for financial strength.
• Standard & Poor's Ratings Services: AA (Very Strong; second highest of nine categories) for financial strength.
AXA Equitable Life Insurance Co.'s current ratings are as follows:
• A.M. Best Co. Inc.: A+ (Superior; second highest of 16 categories) for financial strength, operating performance and business profile.
• Fitch Ratings: AA+ (Very Strong; third highest of 21 categories) for financial strength.
• Moody's Investors Service: Aa3 (Excellent; fourth highest of 21 categories) for financial strength.
• Standard & Poor's Ratings Services: AA (Very Strong; third highest of 21 categories) for financial strength.
"Great-West Life has consistently received high industry ratings for its financial strength and operating performance," Mr. Biesterfelt says. "These ratings represent the opinion of nationally recognized rating agencies regarding the financial strength of the company and its ability to meet ongoing obligations to policyholders."
Mr. Biesterfelt also noted that Great-West has a very limited general account investment exposure to holdings in fixed income securities backed by Lehman Brothers Holdings Inc. and American International Group Inc.
"The combined total of Lehman and AIG investments represents less than one-third of 1 percent of the company's consolidated general account assets," said Mr. Biesterfelt.
According to David Dwyer, director of the Council on Members Insurance and Retirement Programs, AXA Equitable Life reports that the vast majority of assets held in the ADA Members Retirement Program and the members' individual retirement accounts are held in separate accounts of the AXA Equitable Life Insurance Co.
The council has been advised that the group annuity contracts issued by AXA Equitable that fund the ADA Members Retirement Programs provide protection in accordance with New York State insurance law against the general account creditors of the insurer.
CMIRP has also received phone calls from members about the retirement program's Money Market Guarantee Account.
"These members were reassured when they were advised that the Money Market Guarantee Account is protected by a separate account holding securities sufficient to provide for the repayment of all principal and securities," said Mr. Dwyer. "If these securities are insufficient, AXA Equitable will transfer additional assets into the separate account from its own general account."
Mr. Dwyer explained that AXA Equitable has advised that the only program assets that are not held in separate accounts are those invested in the guaranteed rate accounts. Contributions to these accounts are guaranteed by the general accounts of the AXA Equitable, Principal Mutual, John Hancock, New York Life and/or Metropolitan Life Insurance companies, depending on the date on which the guaranteed rate account was opened. All of these insurance companies have solid industry ratings, according to Mr. Dwyer.
AXA Equitable has continued to focus on its core business of financial protection, according to Santo LoPorto, vice president and account executive for the ADA Members Insurance Programs.
"AXA Group currently has a healthy balance sheet, sound strategies in place and remains focused on helping dentists meet long-term goals by continuing to develop and launch innovative new products and services," commented Mr. LoPorto. "We invest in state-of-the-art technology platforms and customer service initiatives. In doing so, we are capitalizing on our financial strength. In fact, just last month, we reported positive underlying earnings growth at half-year 2008, stable total revenues, positive net inflows in all business lines and overall financial strength."
Mr. LoPorto also observed that while AXA Group understands that no one is immune from the challenges of a volatile market, the company has taken crucial steps in recent years to strengthen and improve its ability to manage through turbulent market conditions when necessary.
Noting AXA's press release dated Sept. 16, Mr. LoPorto said AXA Group's equity exposure to AIG and Lehman Brothers is limited.
"The company holds a proprietary equity interest of 0.05 percent in Lehman Brothers and 0.02 percent in American International Group of their respective total outstanding common shares," said Mr. LoPorto.
Members who would like additional information about the ADA Members Insurance Programs should call Great-West Life at 1-888-463-4545. For information about the ADA Members Retirement Program and/or Individual Retirement Accounts, members should call AXA Equitable at 1-800-523-1125.