A.M. Best Co. has downgraded the financial strength rating (FSR) to B++ (Good) from A- (Excellent) and issuer credit ratings (ICR) to “bbb+” from “a-” of Household Life Insurance Company (Household Life) (Detroit, MI) and its wholly owned subsidiary, First Central National Life Insurance Company of New York (First Central) (New York, NY). Household Life and First Central, (together referred to as Household Life Insurance Group), are the principal insurance operating entities of HSBC Finance Corporation, which is an indirect wholly owned subsidiary of HSBC Holdings, plc. (HSBC) (United Kingdom) [NYSE: HBC]. Concurrently, A.M. Best has downgraded the FSR to B++ (Good) from A- (Excellent) and the ICR to “bbb+” from “a-” for Household Life’s property/casualty affiliate, HSBC Insurance Company of Delaware (HSBC DE) (New Castle, DE). The outlook for all ratings is stable. The rating actions for the Household Life Insurance Group primarily reflect the recent announcement that it will cease manufacturing insurance products in the United States and Canada. Specifically, the company has decided to exit the manufacturing of all insurance products through the sale of HSBC Finance Corporation’s interest in substantially all of its insurance subsidiaries. Insurance products will continue to be offered to HSBC customers through non-affiliate providers. The decision to sell these entities was made at the conclusion of a strategic review that had been ongoing since the second half of 2011, at which time HSBC had decided that this business was no longer consistent with its core strategy in the United States and Canada. The company had previously decided to cease issuing new term life insurance products in 2011 as part of this review. The ratings also reflect an anticipated substantial decline in capital and surplus due to an extraordinary stockholder dividend and A.M. Best’s expectation that Household Life Insurance Group will be managing to much lower risk-adjusted capital ratios going forward relative to historical levels.