Genworth reported material reserve strengthening in its U.S. long-term care insurance business. Earnings volatility has increased and dividend capacity to the parent holding company is now more constricted. We are lowering our ratings on Genworth Financial Inc. and its U.S. life subsidiaries. The negative outlook reflects the need to rebuild capital strength, the risk of further reserve strengthening, and execution risk in the turnaround of the U.S. life insurance division. On Nov. 6, 2014, Standard&Poor's Ratings Services lowered its long-term counterparty credit and senior unsecured debt ratings on Genworth Financial Inc. to 'BB+' from 'BBB-'. We also lowered our financial strength ratings on Genworth Life Insurance Co., Genworth Life and Annuity Insurance Co., and Genworth Life Insurance Co.
