S&P drops OM Financial

Standard & Poor's said that it lowered its counterparty credit, financial strength, and financial enhancement ratings on OM Financial Life Insurance Co. to BB+ from BBB-.

The outlook is negative.

"The downgrade reflects a weakening in OM's capital position because of increased credit losses, weak risk management, and strained financial flexibility," explained S&P credit analyst Jeremy Rosenbaum.

In addition, three factors are narrowing the competitive position in OM's targeted niche market: the company's exit of certain products and product lines, the concerted effort to slow sales growth in 2009 and a regulatory proposal that, if adopted, could significantly hurt sales of its core product.

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