explicitly incorporates the potential for direct sovereign risk.

"The change results in lower ratings on some foreign branches and guaranteed subsidiaries, especially for those domiciled in higher-risk environments in which systemic risks or severe economic stress-the predecessors to government intervention-are perceived to be greatest," said S&P's credit analyst Mark Puccia.

"The change also makes the definition of analytic methodologies for insurance financial strength ratings conform with those used for issuer ratings in the bank and corporate sectors," he noted.

"The criteria change has resulted in lower ratings on these companies because they are domiciled in a higher-risk environment in which systemic risks or severe economic stress--the predecessors to government intervention--are perceived to be greatest," explained S&P's credit analyst Grace Osborne.

With explicit support--such as a guaranty or as a branch--the S&P financial strength rating on an insurer would generally be six notches higher than the sovereign local currency rating in domiciles where the sovereign local currency rating is investment grade.

S&P said the rating would be four notches higher in domiciles where the sovereign local currency rating is noninvestment grade, limited by the rating on the guarantor.

The same degree of support, S&P said, would be applied to the financial strength rating on a branch operation.

Ideally, the firm said, these would be companies or branches to which senior group management has demonstrated a strong commitment--a track record of support in good times as well as bad.

Complete ratings information is available to subscribers of RatingsDirect, S&P's Web-based credit analysis system, at www.ratingsdirect.com.

All ratings affected by this rating action, the company said, can be found on S&P's public Web site at www.standardandpoors.com; under Fixed Income in the left navigation bar.