A.M. Best Co. has assigned a financial strength rating of ?A? and an issuer credit rating of ?a? to new XL Re Life America Inc. Best assigned a stable outlook for the company which is ultimately owned by XL Capital Ltd.

XL Re Life America, currently named Servus Life Insurance Company, will change its name to XL Re Life America Inc. following state approvals.

With a licence in 48 states, XL Re Life America offers a platform for the XL to enter the US life reinsurance marketplace. It will initially write traditional mortality reinsurance on both a yearly renewable term and co-insurance basis, with a focus on smaller- and medium-sized life writers seeking to mitigate their triple X reserve strain, Best said.

The ratings firm believes there is opportunity and room for addition entrants in the US life reinsurance arena which has undergone significant consolidation and price hardening in recent years.

?XL currently has a team based in the US, with several years of experience in the US life insurance market. Moreover, XL subsidiaries have been active in the UK life reinsurance market for a number of years and have developed administration and underwriting capabilities, which are transferable to the US life reinsurance arena,? Best said.

It views XL Re Life America?s plan to target an NAIC risk-based capital ratio of 300 percent as ?adequate? to support the planned volume of new business.

XL Re Life America will have an internal retrocession arrangement in place, which lends further capital support to its new business activities, Best said. Offsetting these positives are a lack of a US operating history and uncertainties surrounding the successful execution of its business plan, Best said.