Market Overview

A.M. Best Affirms Credit Ratings of New York Life Insurance Company and Its Subsidiaries


A.M. Best has affirmed the Financial Strength Rating of A++
(Superior) and the Long-Term Issuer Credit Ratings of "aaa" of New
York Life Insurance Company
and its wholly owned subsidiary, New
York Life Insurance and Annuity
Corporation (collectively
referred to as New York Life). Additionally, A.M. Best has affirmed the
Long-Term Issue Credit Ratings (Long-Term IRs) on the funding
agreement-backed securities (FABS) programs, the outstanding notes
issued thereunder and the Long-Term IRs on the existing surplus notes of
New York Life Insurance Company. The outlook for each of these Credit
Ratings (rating) is stable. All companies are headquartered in New York,
NY. (See below for a detailed listing of the Long-Term IRs.)

The ratings reflect New York Life's balance sheet strength, which A.M.
Best categorizes as strongest, as well as its very strong operating
performance, very favorable business profile and very strong enterprise
risk management.

New York Life's ratings reflect the very strong risk-adjusted capital,
with consistently growing absolute levels of capital, ample financial
flexibility and abundant amount of liquidity even under extreme stress
scenarios. Currently, the company's reserve profile remains weighted
toward annuity products, which are exposed to the continued low interest
rate environment. However, this reserve profile is partially driven by
the reserving dynamics between the two products, which generate higher
reserves for the annuity products in the earlier years. While A.M. Best
believes that New York Life's investment management capabilities remain
strong, the potential still exists for higher than normal, albeit
manageable, credit losses within its general account investment
portfolio. While the organization's portfolio has a material allocation
to highly rated corporate fixed-income securities, A.M. Best notes that
New York Life has a sizeable allocation to non-traditional assets,
namely investments in private equity and hedge funds that together
represent approximately 20% of total capital.

New York Life's current adjusted GAAP financial leverage, excluding
accumulated other comprehensive income, together with secured and
non-recourse debt, is well within A.M. Best's guidelines for the
company's current rating level. Also, GAAP interest coverage is very
strong. Additionally, A.M. Best holds a favorable view of New York
Life's proactive management approach to interest rate risk through
ongoing hedging, product design, dynamic asset rebalancing and
disciplined sales. Finally, A.M. Best notes that New York Life has an
added measure of financial flexibility in support of its very strong
risk-adjusted capital position through the management of its
policyholder dividend scale.

The very strong and stable operating performance is generated from its
traditional ordinary life insurance business, providing long-term cash
flows as the foundation. The majority of new annuity sales are derived
from premium based products with market value adjustment features that
reduce interest rate risk and are offset with some vulnerability to
spread compression should the low interest rate environment persist.
Earnings have increased primarily as a result of favorable mortality and
morbidity experience with overall positive business growth. New York
Life's investment operations provide further earnings diversification
reflective of its strong spread revenue and asset-based fees that are
generated from the $586 billion of assets under management as of
year-end 2017.

The business profile is characterized by the conservative nature of the
company's product portfolio, together with its large block of ordinary
life business, translates into one of the more creditworthy liability
profiles in the industry. New York Life's ratings also reflect the
stability and strength of its career agency distribution force and its
market position among the top leaders in the U.S. life insurance
industry, which has led the industry in Million Dollar Round Table
(MDRT) membership for 63 consecutive years. The agency channel remains a
competitive advantage and has contributed to the organization's strong
persistency and prominent market position within the individual life
market. With respect to NYL's product portfolio, A.M. Best believes the
allocation to interest-sensitive liabilities is high relative to peers,
including its use of operating leverage; however, the company has
historically demonstrated solid capabilities in managing this exposure.
A.M. Best will continue to monitor any additional growth in this

The following Long-Term IRs have been affirmed:

New York Life Funding--program rating of "aaa"

New York Life Global Funding--program rating of "aaa"
"aaa" on all outstanding notes issued under the program

New York Life Insurance Company--
-- "aa" on $1 billion
5.875% surplus notes, due May 2033
-- "aa" on $1 billion 6.75%
surplus notes, due November 2039

New York Life Capital Corp--
-- AMB-1+ on the commercial
paper program

This press release relates to Credit Ratings 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 see A.M. Best's
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases

A.M. Best is the world's oldest and most authoritative insurance
rating and information source. For more information, visit

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its

View Comments and Join the Discussion!