NEW YORK - Standard & Poor's Ratings Group affirmed its ratings on Cigna Corp.'s debt following a restructuring announcement Oct. 2 by the insurance company that incorporated a method of problem asset disposition pioneered by banks.

Standard & Poor's affirmed its A2 rating on Cigna's commercial paper, the BBB rating on its subordinated debt; and the BBB-plus rating on its long-term debt, and revised its outlook to stable from negative.

Cigna's restructuring of its property-casualty operations incorporates elements of a method, known as the "good bank/bad bank" strategy, which commercial bank managements and regulators have used often in the past to separate poorly performing assets from healthy ones.

The process, which involves a troubled bank, establishes two newcorporate entities: a "good bank" to house performing assets and a "bad bank" to hold assets that are nonperforming, or of high risk. Cigna's process is closely analogous to that followed in the banking industry in that it seeks to separate reserve risk by setting up two pools where one formerly existed.

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