A.M. Best Co. has downgraded Keyport Life Insurance Co.

The rating on the Boston-based company was reduced to A from A-plus.

Keyport was the seventh-largest seller of annuities through banks on Sept. 30, according to Kenneth Kehrer Associates of Princeton, N.J.

In lowering the rating last week, Oldwick, N.J.-based A.M. Best cited "ongoing difficulty Keyport has experienced in growing its core individual annuity business."

Other reasons given included the disintermediation risk posed by the company's no- or low-surrender-charge products.

Keyport introduced a no-surrender-charge variable, which provides additional liquidity, in July. Now several other underwriters also offer such products.

Despite the downgrade, A.M. Best expressed approval of Keyport's focus on widening its product line and creating competitive and profit-enhanced annuity products.

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