A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit rating (ICR) of “a” of Kansas CityLife Insurance Company (Kansas City Life) [NASDAQ: KCLI]. Additionally, A.M. Best has affirmed the FSR of A- (Excellent) and ICR of “a-” of Kansas City Life’s wholly owned subsidiary, Sunset Life Insurance Company of America (Sunset Life). The outlook for the above ratings is stable. Concurrently, A.M. Best has revised the outlook to stable from positive and affirmed the FSR of B++ (Good) and ICR of “bbb+” of Old American Insurance Company (Old American), the group’s final expense life insurance subsidiary. All companies are domiciled in Kansas City, MO. The ratings of Kansas City Life reflect its solid risk-adjusted capital position and favorable trends in statutory and GAAP operating profitability that have been primarily driven by the company’s core universal and traditional life insurance and fixed annuity lines of business. In addition, the ratings consider the company’s diversified product portfolio and multi-channel distribution platform. Kansas City Life also benefits from earnings on its acquired blocks of business. A.M. Best notes that acquisitions remain a significant part of the company’s growth strategy, and it plans on purchasing other insurance companies or blocks of ordinary life insurance on an opportunistic basis. Partially offsetting these positive rating factors is Kansas City Life’s general decline in capital and surplus over the past five years driven by stockholder dividends, and more recently, a material increase in its pension liability due to the low interest rate environment. However, Kansas City Life realized a $15 million capital gain from the sale of real estate in the early part of 2012, which resulted in a noticeable increase to its capital and surplus. The company also has experienced mixed trends of ordinary life premiums over the past five-year period, which can be partially attributed to the sluggish economy and intense competition in the life insurance market space. While Kansas City Life has reported operating gains on both a statutory and GAAP basis in recent periods, earnings have been negatively impacted by low interest rates and a general decline in premiums due to the run-off of its closed blocks of business and a general decline in life insurance sales.