TEXT - Fitch may still cut Continental General Insurance rating

Wed Feb 13, 2013 11:12am EST

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(The following statement was released by the rating agency)
    Feb 13 - Fitch Ratings maintains United Teacher Associates Insurance Company
and Continental General Insurance Company on Rating Watch Negative. 

KEY RATING DRIVERS

Fitch downgraded the Insurer Financial Strength for both companies to 'BBB' and 
placed them on Rating Watch Negative on May 16, 2012, pending the results of an 
external actuarial study performed on long-term care reserves. Under Fitch's 
rating methodology, the strategic category for these companies is 'Limited 
Importance' as they are in run-off. 

On Dec. 13, 2012 American Financial Group (AFG) announced preliminary results of
the actuarial study and on February 11, announced that fourth quarter 2012 
results include a GAAP after-tax charge of $99 million related to loss 
recognition in the long-term care operations. 

The ratings remain on Rating Watch Negative pending Fitch's review of the 
statutory impact of the reserve strengthening on capital and RBC. Fitch expects 
to complete its analysis as part of its annual review of all AFG ratings within 
the next 45 days.

RATING SENSITIVITIES

The ratings could be downgraded further pending the results of the study, or 
deterioration in RBC to materially below 200%, without commensurate capital 
support from AFG. 

 (Caryn Trokie, New York Ratings Unit)
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