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OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has downgraded the issuer credit ratings (ICR) to aaa from aa+a and affirmed the financial strength rating (FSR) of A (Excellent) of the key life insurance entities of the U.S. operations of ING Groep N.V. (ING) (Netherlands) (NYSE: ING), collectively known as ING USA (headquartered in Atlanta, GA). Concurrently, A.M. Best has downgraded the debt rating to aaa from aa+a of the funding agreement-backed securities program and all outstanding notes issued under the program of ING Security Life Institutional Funding. Additionally, A.M. Best has placed all the above ratings under review with negative implications. (Please see below for a detailed listing of the companies and ratings.)

The rating actions follow the announcement on December 7, 2011 that ING expects to take an estimated USD 1.2 to 1.45 billion (EUR 0.9 to 1.1 billion) earnings charge against fourth-quarter results in its U.S. variable annuity closed block. A.M. Best notes ING USAas weakened operating profile, reduced risk-adjusted capital level and diminished financial flexibility, which may have an adverse effect on the timing of the proposed initial public offering (IPO) of the U.S. insurance business.

The under review with negative implications status reflects the potential for a further change in the ratings and/or outlook based on A.M. Bestas annual meeting with management planned for the first-quarter of 2012 and the subsequent review. However, at this time, A.M. Best views the announced charge as significant enough to take rating actions and place the current ratings under review.

ING USAas ratings continue to reflect some enhancement based on the ownership and explicit support the U.S. operations have received from their ultimate parent, ING. On a stand-alone basis, offsetting rating factors include both the large execution and operational risk of the pending IPO and the sizable legacy closed block of variable annuity policies with guarantees.

Key factors that could result in future negative rating actions include a significant and sustained decline in risk-adjusted capitalization as measured by Bestas Capital Adequacy Ratio (BCAR) model; operating performance below A.M. Bestas expectations; financial leverage and/or interest coverage that fails to meet A.M. Bestas guidelines for the current rating level; or substantial delays in the anticipated IPO. Factors that could drive an affirmation of the current ratings include reaching targeted financial leverage and coverage levels, generating sustained growth in statutory capital and surplus or a successful completion of the planned IPO creating improved financial flexibility.

The ICRs have been downgraded to aaa from aa+a and the FSR of A (Excellent) has been affirmed for the following entities of ING USA:

• ING Life Insurance and Annuity Company
• ING USA Annuity and Life Insurance Company
• ReliaStar Life Insurance Company
• ReliaStar Life Insurance Company of New York
• Security Life of Denver Insurance Company

The principal methodology used in determining these ratings is [ Bestas Credit Rating Methodology - Global Life and Non-Life Insurance Edition ], which provides a comprehensive explanation of A.M. Bestas rating process and highlights the different rating criteria employed. Additional key criteria utilized include aUnderstanding BCAR for Life/Health Insurersa and aRating Members of Insurance Groups.a Methodologies can be found at [ www.ambest.com/ratings/methodology ].

Founded in 1899, A.M. Best Company is the worldas oldest and most authoritative insurance rating and information source. For more information, visit [ www.ambest.com ].

Copyright 2011 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.