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A.M. Best Comments on the Ratings of Merit Life Insurance Co. and Yosemite Insurance Company

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A.M. Best has commented that the financial strength rating of B (Fair) and the issuer credit ratings of “bb+” of Merit Life Insurance Co. (Merit Life) and Yosemite Insurance Company (Yosemite), both wholly-owned subsidiaries of Springleaf Holdings, Inc. (Springleaf)(NYSE:LEAF) , remain unchanged following the recent announcement that Springleaf has entered into a definitive agreement to acquire OneMain Financial Holdings, Inc. (OneMain) from CitiFinancial Credit Company, a wholly-owned subsidiary of Citigroup Inc. (NYSE:C) , for total consideration of $4.25 billion in cash. Merit Life and Yosemite are based in Evansville, IN. The outlook for all ratings is stable.

The ratings of Merit Life and Yosemite reflect the drag of its immediate parent, Springleaf Finance Corporation (SFC), a below investment grade consumer finance company whose operating flexibility and business profile had been challenged by the credit crisis and subsequent difficult macroeconomic environment. A.M. Best notes that SFC has made progress in recent periods in repaying near-term debt and extending its liquidity runway as well as improving operating performance.

Both Merit Life and Yosemite will be closely monitored by A.M. Best for any adverse impact from SFC’s financial condition, notably its ability to meet upcoming debt maturities as financial leverage is expected to rise due to the OneMain acquisition.

Merit Life is a life and health insurance company specializing in writing credit life and credit disability insurance. Yosemite is a property and casualty insurance company that principally writes or reinsures credit involuntary unemployment insurance and lender-placed insurance.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at

Key insurance criteria reports utilized:

  • Risk Management and the Rating Process for Insurance Companies
  • Rating Members of Insurance Groups
  • Evaluating Non-Insurance Ultimate Parents
  • A.M. Best’s Perspective on Operating Leverage
  • Catastrophe Analysis in A.M. Best Ratings
  • Understanding BCAR for Property/Casualty Insurers
  • A.M. Best’s Liquidity Model for U.S. Life Insurers
  • Understanding BCAR for U.S. and Canadian Life/Health Insurers

This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit

Copyright (c) 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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