Citing worries about subprime mortgages, Fitch Ratings has downgraded the insurer financial strength rating of Security Benefit Life Insurance Co., Topeka, Kan., and is keeping it on Rating Watch Negative. Fitch said the downgrade stems from Security Benefit's acquisition of Rydex Investments, specifically from concerns about the financing of the transaction and its effect on Security Benefit's balance sheet fundamentals. Fitch said it was maintaining the negative watch status based on Security Benefit's exposure to subprime mortgages through its investment in mortgage-backed securities. "The company's surplus exposure to subprime-related investments is significantly above average for the life insurance industry, and Fitch believes that deteriorating conditions in the mortgage market and the economy as a whole could further impair the quality of Security Benefit's portfolio of asset-backed securities," the rating agency said.

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