WEISS RATINGS

At Least 49 Life and Health Insurers Have More
Junk Bonds Than Capital, Increasing Vulnerability
to Recent Plunge in Junk Bond Prices
Flow into these variable annuities and life insurance
products slowed dramatically in third quarter

PALM BEACH GARDENS, Fla., November 20, 2000 - At least 49 life and health insurers whose junk bond holdings exceeded capital at June 30 are vulnerable to the sharp decline in junk bond prices which began in September of this year, according to a recent study by Weiss Ratings, Inc., the only independent provider of insurance company ratings and analyses.

Insurance companies reporting the largest percentage of junk bonds in relation to capital include:

Weiss
Safety
Rating
Junk
Bonds
$(Mil)
Capital
$(Mil)
Junk
Bonds
Capital
Il Annuity & Insurance Company (Mass.) C 211.9 40.2 527%
Capitol Life Insurance Co. (Colo.) D 51.3 13.7 375%
Conseco Direct Life Insurance Co. (Penn.) D+ 88.7 29.6 299%
Fidelity & Guaranty Life Insurance Co. (Md.) C 536.3 185.2 290%

Weiss Safety Rating: A = Excellent; B = Good; C = Fair; D = Weak; E = Very Weak

"A high exposure to junk bonds today could have a negative impact down the road on the safety of fixed annuities and whole life policies held by hundreds of thousands of consumers. Although the current decline in the junk bond market does not have an immediate impact on an insurer's financials, since the company can continue to hold the bonds and avoid realizing losses, it could be an advance warning of higher default rates on junk bonds in the future which would have a significant impact on the profits and capital of these insurers," said Martin D. Weiss, Ph.D., chairman of Weiss Ratings.

Overall, the 49 companies hold $41.4 billion in junk bonds, or over 43% of the $95.4 billion held by all 1,095 life insurers reviewed by Weiss. And on average, the 49 companies have $1.20 invested in junk bonds for every dollar of capital, as compared to $0.48 industry-wide.

Weiss does not consider all insurers holding junk bonds as financially weak. Some companies have other offsetting strengths, such as high capital levels or strong stable profits, that can help them avert future financial difficulties and protect the consumer's safety. Therefore, Weiss advises that consumers review both (a) the company's exposure to junk bonds, and (b) the company's Weiss Safety Rating which takes these other factors into account.

Profits Up Moderately

The nation's life and health insurers reported operating profits of $23.1 billion during the first half of 2000, representing a $1.2 billion, or 5.3%, increase over the $21.9 billion recorded in the first half of 1999. Likewise, the industry's bottom line net profit increased to $12.8 billion in the first half of 2000, up $831 million, or 6.9%, compared to the $12.0 billion profit recorded in the first half of 1999.

Notable Upgrades and Downgrades

Among the life, health, and annuity insurers recently reviewed by Weiss, six received upgrades, while 13 were downgraded.

Notable upgrades include:
• Phoenix Home Life Mutual Insurance Co. (N.Y.) from B- to B
• North Central Life Insurance Co. (Minn.) from C+ to B-
• Funeral Directors Life Insurance Co. (Texas) from D+ to C-
Notable downgrades include:
• American Community Mutual Insurance Co. (Mich.) from C- to D
• American Heritage Life Insurance Co. (Fla.) from A- to B+
• Conseco Direct Life Insurance Co. (Penn.) from C- to D+
• Conseco Annuity Assurance Co. (Ill.) from C to C-

The Weiss ratings are based on an analysis of a company's risk-adjusted capital, five-year historical profitability, quality of investments, liquidity, and stability. The latter category combines a series of factors including asset growth, premium growth, strength of affiliate companies, and risk diversification.

Weiss issues safety ratings on more than 16,000 financial institutions, including HMOs, life and health insurers, Blue Cross Blue Shield plans, property and casualty insurers, banks, and brokers. Weiss also rates the risk-adjusted performance of more than 10,000 mutual funds. Weiss Ratings is the only major rating agency that receives no compensation from the companies it rates. Revenues are derived strictly from sales of its products to consumers, businesses, and libraries.

Consumers needing more information on the financial safety of a specific company can purchase a rating and summary analysis for as little as $7.95 through the Weiss Ratings web site at www.WeissRatings.com.

Company Weiss
Safety
Rating
Junk
Bonds
$(Mil)
Capital
$(Mil)
Junk
Bonds
Capital
Il Annuity & Insurance Co (MA) C 211.9 40.2 527.0%
Capitol Life Insurance Co (CO) D 51.3 13.7 374.7%
Conseco Direct Life Insurance Co (PA) D+ 88.7 29.6 299.4%
Fidelity & Guaranty Life Insurance Co (MD) C 536.3 185.2 289.6%
American Investors Life Insurance Co (KS) C 228.7 115.2 198.6%
First Columbine Life Insurance Co (CO) C 201.6 105.2 191.7%
Provident Life & Accident Insurance (TN) C 961.6 510.2 188.5%
Security Life & Trust Insurance Co (TX) D+ 71.0 38.0 186.8%
Conseco Annuity Assurance Co (IL) C- 801.6 473.4 169.3%
United Life Insurance Co (IA) C+ 89.1 52.6 169.3%
Pfl Life Insurance Co (IA) B- 603.1 364.8 165.3%
Amerus Life Insurance Co (IA) C+ 291.7 187.6 155.5%
Security First Life Insurance Co (DE) B- 206.5 134.8 153.2%
Ge Life and Annuity Assur Co (VA) B 839.4 563.6 149.0%
Cova Financial Services Life Ins Co (MO) C 152.8 104.2 146.7%
Jackson National Life Insurance Co (MI) C+ 3,336.7 2,303.7 144.8%
American Enterprise Life Ins Co (IN) B 510.7 354.2 144.2%
Southland Life Insurance Co (TX) B 129.0 91.3 141.3%
First Colony Life Insurance Co (VA) B 800.0 578.9 138.2%
Columbia Universal Life Insurance Co (TX) C+ 21.7 16.1 134.7%
Great American Life Ins Company (OH) C 522.8 392.2 133.3%
Bankers United Life Assurance Co (IA) B- 221.9 166.7 133.1%
Aig Life Insurance Company (DE) B- 354.2 278.3 127.3%
Usg Annuity & Life Company (OK) B 473.2 381.4 124.1%
Financial Benefit Life Insurance Co (KS) C 28.0 22.6 123.8%
Thomas Jefferson Life Insurance Co (NY) C 20.1 16.3 123.1%
American Internatl Life Asr Co NY (NY) B 485.0 394.4 123.0%
Ids Life Insurance Company (MN) B 2,331.6 1,906.5 122.3%
American Centurion Life Assured Co (NY) C+ 45.3 37.9 119.6%
Metropolitan Life Insurance Co (NY) A- 9,116.5 7,654.1 119.1%
American General Life & Acc Ins (TN) B 433.6 367.2 118.1%
Conseco Variable Insurance Co (TX) C 143.4 122.7 116.9%
Keyport Life Insurance Co (RI) B 957.8 828.7 115.6%
American General Life Ins Co of NY (NY) B+ 48.9 42.3 115.4%
Acacia National Life Insurance (VA) B- 30.6 26.9 113.8%
American General Annuity Ins Co (TX) B 1,103.4 971.0 113.6%
Security Life of Denver Insurance Co (CO) B 379.8 340.1 111.7%
Conseco Life Insurance Co (IN) C 249.6 227.1 109.9%
American Progressive L&H Ins of NY (NY) D 10.3 9.5 108.8%
Liberty Life Assurance Co of Boston (MA) B- 167.7 155.1 108.1%
CM Life Insurance Co (CT) B+ 96.6 89.6 107.8%
Variable Annuity Life Insurance Co (TX) B+ 1,485.1 1,383.5 107.3%
Conseco Health Insurance Co (AZ) C 121.1 114.7 105.6%
Sunamerica Life Insurance Co (AZ) B- 1,621.9 1,538.8 105.4%
Franklin Life Insurance Co (IL) B+ 422.8 406.8 103.9%
All American Life Insurance Co (IL) B- 188.1 114.0 103.6%
Transamerica Life Ins & Annuity (NC) B 818.2 810.4 101.0%
Prudential Insurance Co of America (NJ) B- 9,354.5 9,318.1 100.4%
Household Life Insurance Co of AZ (AZ) U 63.6 63.5 100.1%



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