OREANDA-NEWS. August 31, 2015.  Fitch Ratings has completed a portfolio review covering four insurance groups within the UK life insurance sector focused exclusively on application of Fitch's recently updated notching criteria for the insurance industry. The purpose of the review was to identify any ratings that should be changed as a result of the application of the updated notching criteria.

Fitch published updated insurance notching criteria on 14 July 2015, following publication of an exposure draft of the criteria on 12 May 2015. The updated notching criteria appear in Section VI of the insurance master criteria report Insurance Rating Methodology.

Notching refers to the practice of establishing a given rating relative to a defined "anchor" rating, using guidelines linked to certain characteristics of the rating that is being notched. For Fitch's insurance ratings, the Insurer Financial Strength (IFS) Rating is the initial anchor rating, and other ratings that are notched relative to it include Issuer Default Ratings (IDRs) of operating and holding companies, and debt/hybrid obligation ratings.

Fitch updated its notching criteria in light of changes in the regulatory landscape, including the move in Europe and other jurisdictions to Solvency 2 or a Solvency 2-type regulatory framework. As a result, from a global perspective, notching changes are more pronounced in Europe and other such jurisdictions than in the U.S. and similarly regulated countries.

KEY RATING DRIVERS
For this rating review, the key rating driver was the impact of the updated notching criteria. See most recently published Rating Action Commentaries or research reports for additional information on other Key Ratings Drivers pertinent to specific entity ratings.

RATING SENSITIVITIES
Not applicable to this portfolio review given its limited focus on implementation of the updated notching criteria. See most recently published Rating Action Commentaries or research reports for additional information on Rating Sensitivities pertinent to specific entity ratings.

SUMMARY OF RATING ACTIONS
A link to a summary report that details all of the ratings actions taken as part of the portfolio review is available via the link above.

The linked summary report includes:
--A full list of ratings and related rating actions
--A hyperlink to each rated entity's ratings summary page on the Fitch website
--Primary analyst and secondary analyst contact information
--Participation status

The review has resulted in ten ratings being upgraded, one rating being downgraded and 50 ratings being affirmed.

PREVIOUSLY REVIEWED ENTITIES

While included in the UK life insurance sector, the ratings for the following groups were not reviewed as part of the portfolio review. These groups' ratings were previously updated to reflect the new notching criteria, with details available via the ratings announcement links below.

Fitch Upgrades Old Mutual's IDR to 'BBB+'; Outlook Stable

Fitch Rates Phoenix Life and Phoenix Life Assurance IFS 'A'; Outlook Stable

LIMITATIONS
The portfolio review was limited in scope, and only included an assessment of the updated notching criteria as outlined in Section VI (Notching: Debt, Hybrid, IFS Rating and Holding Companies) of Fitch's insurance master criteria. None of the factors outlined in Section I (Key Rating Factors) of the master criteria, or any other elements discussed in the master criteria, were reviewed. Where relevant, Fitch considered the appropriateness of the relative ranking of ratings in the UK life insurance sector, after initial consideration of updated notching guidelines, as part of the portfolio review.