TEXT - S&P may change MMA IARD Assurances Mutuelles

Wed Nov 21, 2012 12:10pm EST

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(The following statement was released by the rating agency)

Overview
     -- France-based composite mutual insurance group Covea has announced that 
it will restructure its operations, in particular creating an intermediate 
holding company, Covea Cooperations, which will own all operating entities of 
Covea. 
     -- The mutual group MMA will own a third of Covea Cooperations, alongside 
the mutual groups MAAF and GMF, which could affect our views of the financial 
and business profiles of MMA IARD Assurances Mutuelles (MMA).
     -- We are therefore placing our 'A-' insurer financial strength and 
counterparty credit ratings on MMA on CreditWatch with developing implications.
     -- The developing implications reflect the possibility that we could 
raise, lower, or affirm the ratings on MMA, after we further assess the risks 
and benefits for MMA from the restructuring.

Rating Action
On Nov. 21, 2012, Standard & Poor's Ratings Services placed its 'A-' insurer 
financial strength and counterparty credit ratings on French mutual insurer 
MMA IARD Assurances Mutuelles (MMA) on CreditWatch with developing 
implications. We also placed our 'A-' financial strength rating on MMA's U.K. 
subsidiary Covea Insurance plc on CreditWatch with developing implications. 

Rationale
The CreditWatch placement follows France-based composite mutual insurance 
group Covea's announcement that it will undertake a groupwide legal and 
financial restructuring, with potential implications for MMA IARD Assurances 
Mutuelles (MMA), which is a member of Covea. We therefore expect to assess the 
impact the restructuring could have on the ratings on MMA. 

In particular, Covea will create Covea Cooperations, a sub-holding company to 
be owned by Covea's three mutual groups  MMA, MAAF and GMF. Covea Cooperations 
will likely be the full owner of the group's insurance operating entities.  
The mutual group MMA will own a third of Covea Cooperations meaning it will 
indirectly own (through Covea Cooperations) one third of the operating 
entities of the GMF and MAAF groups. This is likely to materially affect 
MMA's' business and financial profiles, in our opinion, because MMA's scope of 
consolidation, on which we base our opinion of MMA's financial strength, will 
change substantially. We nevertheless understand that this restructuring is 
subject to regulatory and policyholder assembly approvals. 

The rating on MMA is supported by its strong competitive position in the 
French property/casualty market, prudent investment strategy, and solid 
capitalization. Partially offsetting these strengths are MMA's financial 
management practices that are not commensurate with the current size of the 
insurer's life portfolio and only good, albeit improving, operating 
performance. 

CreditWatch
We aim to resolve or update the CreditWatch within the next 90 days. During 
this period, we will assess the implications of the restructuring on MMA's 
business and financial profiles, and in turn, on the ratings. We understand 
the restructuring will be completed by year-end 2012.  

We could raise, affirm, or lower the ratings on MMA, depending on our views of 
the potential implications on its financial and business risk profiles. An 
upgrade or a downgrade, if any, is unlikely to exceed two notches.

Related Criteria And Research
     -- Use Of CreditWatch And Outlooks, Sept. 14, 2009
     -- Group Methodology, April 22, 2009
     -- Interactive Ratings Methodology, April 22, 2009

Ratings List
Ratings Affirmed; CreditWatch/Outlook Action
                                        To                 From
MMA IARD Assurances Mutuelle
 Counterparty Credit Rating
  Local Currency                        A-/Watch Dev/--    A-/Stable/--

MMA IARD Assurances Mutuelle
Covea Insurance Plc
 Financial Strength Rating
  Local Currency                        A-/Watch Dev/--    A-/Stable/--

 (Caryn Trokie, New York Ratings Unit)
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