OREANDA-NEWS. S&P Global Ratings said today that it placed its 'BB+' issuer credit rating on CNO Financial Group Inc. and its 'BBB+' counterparty credit and financial strength ratings on CNO Financial's operating subsidiaries (Bankers Life, Colonial Penn, and Washington National) on CreditWatch with negative implications. We will resolve the CreditWatch placement after reviewing CNO Financial's audit and any additional information we may have surrounding a potential status quo relationship with Beechwood Re or a recapture of its reinsured business and a prospective review of the company's capitalization metrics and enhanced enterprise risk management as a result of this series of events. We placed the ratings on CreditWatch negative to reflect the limited amount information available on the potential repercussions of the federal probe into Platinum Partners and Platinum's ties to Beechwood Re. This probe could result in many different outcomes surrounding CNO Financial's reinsured long-term care blocks of business from a status quo relationship with enhanced oversight with Beechwood Re to a partial or full recapture of the reinsured liabilities and assets from Beechwood Re. Furthermore, we would need to have further discussions with the company surrounding its overall risk controls and, more specifically, its counterparty credit risk measures. To resolve the CreditWatch placement, we will need to have better insight into Beechwood Re's ties with Platinum as well as an improved understanding of CNO Financial's plans regarding these reinsured blocks of business. Should CNO Financial's management bring those assets and liabilities onto its primary operating subsidiaries' balance sheets--by choice or because it was required to--the consolidated enterprise will face additional statutory capital strain as per our risk-based model. This--coupled with the company's relatively aggressive capital-management strategies--cause us to question the prospective capital adequacy as per our risk-based capital model of the consolidated group. If CNO Financial were to recapture the reinsured business to Beechwood Re either voluntarily or involuntarily, the company's prospective capital adequacy as measured per our risk-based capital model, barring us having knowledge of any prospective management plans, will not be consistent with our current credit metrics. As such, we would consider lowering the ratings or affirming them and assigning a negative outlook. If CNO Financial were to recapture the reinsured business to Beechwood Re either voluntarily or involuntarily along with having a prospective plan to ready its operations for these liabilities through increased capital metrics in the neighborhood of 500% pre-recapture, we would likely affirm the ratings and assign a positive outlook. Understanding there are still many unknowns surrounding this and the varying outcomes associated with this unique situation, it would be very difficult to provide precise details surrounding its potential return to a positive outlook, barring the presence of enhanced risk controls with Beechwood Re and heightened oversight by CNO Financial into Beechwood's operations. If we believe that CNO Financial's capitalization could withstand such an action, we would likely affirm the ratings and assign a stable outlook. Evidence of this could include decreases in dividend capabilities and share repurchases.