KBRA Affirms Rating for NSS Life, Revises Outlook to Stable
19 Feb 2026 | New York
KBRA affirms the BBB+ Insurance Financial Strength Rating for National Slovak Society of the United States of America ("NSS Life" or "the Society"). The Outlook has been revised to Stable from Positive.
The revision of the Outlook to Stable from Positive reflects weaker year-to-date 2025 operating performance relative to management projections, a moderation in near-term earnings and capital momentum, driven by elevated statutory strain from concentrated early-year MYGA production, compressed spreads, and moderating reinvestment yields. The Stable Outlook reflects KBRA’s expectation that NSS Life will maintain its current risk-adjusted capitalization through disciplined business plan execution, continue controlled growth in annuity and life insurance production, preserve strong investment portfolio credit quality, and actively manage crediting rates to address spread and disintermediation risk.
The rating reflects NSS Life's conservative balance sheet profile, high-quality investment portfolio, and durable franchise within the fraternal life insurance sector. The Society maintains a predominantly investment-grade portfolio, with the vast majority of bond holdings rated BBB or higher, and exposure to higher-risk assets remains modest relative to total adjusted capital. Asset/liability management is disciplined, with cash-flow matching that supports liquidity during periods of elevated policyholder activity, and the Society has not relied on asset sales to meet surrender obligations. Capitalization is supported by an unlevered capital structure and minimal reliance on reinsurance. At year-end 2024, the Society reported an RBC CAL ratio near 300%, consistent with management’s stated target and adequate for the current risk profile.
Balancing these strengths, risk-based capital declined during 2025 in line with earnings pressure and elevated statutory strain, while capital ratios and financial flexibility remain constrained and sensitive to statutory losses during periods of elevated annuity production. Recent operating performance reflects this sensitivity, as concentrated MYGA sales, compressed earned spreads, and lower reinvestment yields have pressured earnings and reduced near-term capital momentum, placing greater importance on disciplined pricing, production mix, and balance sheet management, as earnings remain sensitive to reserve dynamics and margin pressure. The business profile remains concentrated, with fixed annuities accounting for the majority of premiums and reserves and approximately two-thirds of premium volume originating from Pennsylvania. In addition, approximately 90% of reserves are tied to interest-sensitive products, with approximately 70% of annuity balances currently outside of surrender charge protection, resulting in ongoing structural exposure to disintermediation risk. These constraints are partially mitigated by strong life insurance persistency, more than 20 consecutive years of membership growth, and continued improvements in governance and risk management practices.
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