OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has commented that the Credit Ratings (ratings) of Principal Financial Services, Inc. (Principal) [NASDAQ: PFG] (headquartered in Des Moines, IA) and its insurance subsidiaries remain unchanged following the Jan. 31, 2022, announcement that Principal Life Insurance Company and Principal National Life Insurance Company have entered into an agreement to cede its in-force U.S. retail fixed annuities and universal life insurance with secondary guarantee (ULSG) blocks of business to Sutton Cayman, Ltd, an affiliate of Talcott Resolution Life, Inc.
The divestitures of the retail fixed annuity and ULSG in-force blocks are consistent with the results of Principal’s strategic review announced in June 2021. The retail fixed annuity and ULSG statutory reserves are $16 billion and $9 billion, respectively. The transaction will be structured through 100% coinsurance cessions and retrocessions, each on a coinsurance or coinsurance with funds withheld basis. There are several counterparty protections for the benefit of Principal. Principal will retain all responsibility for the administration of the ceded business, and Principal Global Investors, LLC will be appointed as investment adviser to manage the transferred commercial mortgage loans and private credit assets. The transaction is expected to close in the second quarter of 2022.
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