OREANDA-NEWS. S&P Global Ratings said today that it assigned its 'A' long-term counterparty credit and financial strength ratings to CMFG Life Insurance Co. (CMFG Life), Members Life Insurance Co. (MEMBERS) and CUMIS Insurance Society Inc. (CUMIS). At the same time, we assigned our 'BBB' long-term counterparty credit rating to CUNA Mutual Financial Group Inc. (CUNA Mutual). The outlook is stable.

CUNA Mutual, domiciled in Madison, WI, is a multiline insurer with a significant positon in the U. S. credit union market. "Our ratings on CMFG Life, CUMIS, and MEMBERS are based on our belief that all three entities are core to the CUNA Mutual group," said S&P Global Ratings credit analyst Heena Abhyankar. CUNA Mutual writes its life and annuity and health business through CMFG and MEMBERS, and 100% of MEMBERS's business is ceded to CMFG Life. CUNA Mutual's property casualty (P/C) business is written through CUMIS and we believe the subsidiary is well capitalized and provides meaningful product diversification. The rating on CUNA Mutual is three notches below the ratings on the operating companies, which is standard for U. S. insurance holding companies, because it depends primarily on dividends from its operating subsidiaries for its cash-flow needs.

The stable outlook on CUNA Mutual and its core U. S. operating subsidiaries reflects our expectation that the company will maintain its business risk profile, generate favorable earnings, and maintain capital redundancy at least at the 'AA' level. We expect CUNA Mutual's financial leverage to be less than 25% and fixed-charge coverage to remain over 8x.

We may lower our ratings in the next two years if CUNA Mutual's competitive position deteriorates, which could happen as the result of earnings compression or if capital adequacy declines to less than the 'AA' confidence level as per our capital model. We may also lower the rating if the company adopts a more-aggressive investment policy or if the quality of the overall investment portfolio deteriorates, which could result in us revising our view of the company's overall investment risk profile.

We may raise the ratings in the next two years if the company further improves its competition position or demonstrates strong and sustainable capital redundancy at the 'AAA' level. Moreover, any upgrade consideration would require further evidence of continued development of CUNA Mutual's enterprise risk management program.