S&P downgrades roll on: Insurers whacked

NEW YORK (CNNMoney) -- The credit ratings of five major insurance companies were whacked by Standard and Poor's on Monday as the rating agency systematically downgraded debt that is closely linked to the federal government.

The latest victims are insurers Knights of Columbus, New York Life, Northwestern Mutual, Teachers Insurance & Annuity Association of America and United Services Automobile Association.

The ratings were moved from AAA to AA+, and S&P assigned a negative outlook, which means another downgrade could take place in the next few years. (Read: Treasuries are safe. Sorta)

At the same time, S&P affirmed the AA+ rating on Assured Guaranty (AGO), Warren Buffett's Berkshire Hathaway (BRK.A), Guardian, Massachusetts Mutual and Western & Southern -- but lowered their outlook from stable to negative.

The actions were part of the continued fallout from the S&P decision on Friday to drop U.S. sovereign debt to AA+, an unprecedented move that rattled investors and sparked concern over the long-term impact of the action.

It was widely expected that S&P's downgrade of U.S. debt would roll downhill to other entities close to the federal government.

"Our view of these companies' fundamental credit characteristics has not changed," S&P said in a statement. Rather, the downgrade was necessary because "these companies' businesses and assets are highly concentrated in the U.S."

Earlier on Monday, mortgage finance giants Fannie Mae and Freddie Mac were downgraded, as were a series of Israeli bonds that are backed by the U.S. government.

S&P also said it was downgrading the Federal Home Loan Banks, which support consumer credit by making loans to other banks. Other entities close to the military, like the Marine Corps Community Services and Navy Exchange Service Command, were also docked.

Highly-rated businesses are expected to be let off the hook by S&P. Corporations that are based in the United States that have a AAA rating -- like Johnson & Johnson (JNJ, Fortune 500) -- should keep their sterling credit rating.