A.M. Best has affirmed a rating of “a” on $800 million worth of insurance notes issued by Unum Group subsidiary Northwind Holdings.
Northwind Holdings was formed to hold the stock of Northwind Re, a special purpose financial captive insurance company domiciled in Vermont, as well as issuing insurance notes.
Northwind Re provides reinsurance coverage to Unum subsidiaries Provident Life and Accident Insurance Company, The Paul Revere Life Insurance Company and Unum Life Insurance Company of America. It also facilitates the funding of a portion of the capital required to support a closed block of individual disability income policies.
The rating of the Series A Floating Rate Insured Notes due 2037 took into consideration the adequacy of the excess cash flows at Northwind Re available to be transferred as dividends to Northwind Holdings to service the notes.
A.M. Best also took into the consideration the ability to meet or exceed certain benchmarks relative to Northwind Holdings’s plan and forecast, as well as the performance of its investment portfolio, which primarily consists of investment-grade securities and is the primary source of funds to pay ongoing claims.
Northwind Holdings’s issue rating and outlook may come under negative pressure if an unfavourable earnings trend develops over a prolonged period, or if certain benchmarks are not achieved or deteriorate relative to its plan and forecast.
