Its investments battered this year by the subprime mortgage meltdown, Roanoke-based Shenandoah Life Insurance Co. said today it intends to merge with a large Indiana insurance company. 

The merger proposal with OneAmerica Financial Partners Inc. of Indianapolis was announced in a noon press release.

Shenandoah Life, a Roanoke corporate citizen since 1914, announced no employment changes.

Shenandoah Life coupled the merger announcement with a report that it lost $69.9 million during the first nine months of the year in the stock of secondary mortgage market entities Freddie Mac and Fannie Mae and an entity called Sigma Finance. Its finances weighed down by the heavy losses, Shenandoah Life posted a net loss of $61.5 million during the first nine months of the year, compared with a net gain of $4.7 million for the same period of 2007. Shares in Freddie Mac and Fannie Mae have lost more than 90 percent of their value this year in connection with the subprime mortgage meltdown characterized by credit-challenged borrowers defaulting on home loans.

“We believe it is in the best interests of our policyholders to enhance Shenandoah Life’s financial strength by joining with OneAmerica. Our common values focus on commitment to policyholders and continued growth of the service we provide,” said Shenandoah Life President and Chief Executive Officer Robert Clark.

A.M. Best Co. had already downgraded the company's financial strength rating from A-, or excellent, to B++, or good. In contrast, Moody's recently upgraded its ratings of OneAmerica.