S&P Puts GE Units On Watch

NU Online News Service, Dec. 21, 12:22 p.m.EST? Standard & Poor's Ratings Services said it hasplaced several ratings for GE insurance units on "CreditWatch" withnegative implications, citing concerns about the group's continuingreserve strengthening for past accident years.[@@]

The rating agency's decision will affect "A-plus" counterpartycredit and financial strength ratings on Employers ReinsuranceCorp. (ERC) and the "A-minus" counterparty credit rating on GEInsurance Solutions Corp., as well as various ratings on several oftheir affiliates.

"These rating actions stem from our ongoing concerns about thegroup's continuing reserve strengthening for past accident years,"S&P credit analyst Laline Carvalho explained.

Ms. Carvalho said S&P expects to resolve the "CreditWatch"status in the 2005 first quarter, following a review of year-end2004 statutory financials. She added that although a definitiveconclusion cannot be established before then, S&P stillbelieves ratings would not change by more than two notches.

Ms. Carvalho noted that the current ratings on ERC and GEInsurance Solutions reflect the company's strong global reinsurancefranchise, moderately improving operating performance andconservative investment portfolio.