WEISS RATINGS

Manufacturers, Allianz, and AIG Downgraded by Weiss Ratings
71 Life and Health Insurers Downgraded; 22 Upgraded in Recent Review

PALM BEACH GARDENS, Fla., February 26, 2003 - Manufacturers Life Insurance Company, Allianz Life Insurance Company of North America, Kemper Investors Life Insurance Company, Phoenix Life Insurance Company, and AIG Life Insurance Company were among 71 companies downgraded by Weiss Ratings, Inc., in its recent review of 983 life and health insurers. A total of 22 companies, including Transamerica Life Insurance Company of New York, American Pioneer Life Insurance Company, Midwest Security Life Insurance Company, Life of the South Insurance Company, and Sierra Health and Life Insurance Company, received upgrades by Weiss, the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

Manufacturers Life Insurance Company (Toronto, Canada) was downgraded to C (Fair) from B- (Good) due to a rapid decline in earnings since September 30, 2001. Net income plunged $499.8 million, from a $46.7 million profit in the first nine months of 2001 to a $453.1 million loss for the same period in 2002. The decline in profitability has significantly weakened the company's capital position, with capital and surplus falling 36 percent, from $1.3 billion at September 30, 2001 to $852.3 million at the end of the third quarter 2002. The company's risk-adjusted capital ratio also declined, falling to 0.57 compared to a ratio of 1.37 at September 30, 2001.

Allianz Life Insurance Company of North America (Minneapolis, Minn.) was downgraded to C (Fair) from B (Good) due to a substantial decline in earnings. Net income fell $274.1 million, from an $83.7 million profit in 2000 to a $190.4 million loss for the first nine months of 2002. The decline in earnings considerably weakened the company's capital position, which dropped from $808.7 million at year-end 2000 to $727 million at the end of the third quarter 2002.

Kemper Investors Life Insurance Company (Schaumburg, Ill.) was downgraded to a C+ (Fair) from a B- (Good). The downgrade reflects a progressive decline in the company's net income, from a $30.2 million loss in the first three quarters of 2001 to a $163.2 million loss for the same period in 2002. Return on equity (ROE) fell to -91.7 percent compared to a -9.8 percent ROE at September 30, 2001.

Phoenix Life Insurance Company (Enfield, Conn.) was downgraded to a C (Fair) from a B- (Good) due to a significant decline in earnings. Net income plummeted from a $266.1 million profit in 2000 to a $105.5 million loss for the first nine months of 2002. The company's risk-adjusted capital ratio also decreased, falling to 0.87 compared to a ratio of 1.32 at year-end 2000. Capital and surplus decreased by $678.3 million, from $1.3 billion at December 31, 2000 to $644.5 million at the end of the third quarter 2002.

AIG Life Insurance Company (Wilmington, Del.) was lowered to C+ (Fair) from B- (Good) based on a steady decline in earnings since December 2000. Net income decreased from an $18.7 million loss in 2000 to a $37.3 million loss for the first nine months of 2002. Contributing to the loss was a steep decline in premium income, from $1.4 billion in 2000 to $812 million in the first three quarters of 2002.

22 Companies Receive Weiss Safety Rating Upgrades

Transamerica Life Insurance Company of New York (Purchase, N.Y.) was upgraded to B- (Good) from C+ (Fair) based on steadily improved performance since September 30, 2001. Net income increased by $10.3 million, from a $9.2 million loss for the first nine months in 2001 to a $1.1 million profit for the same period in 2002. The increase in profitability has enabled the company to enhance its capital position, with capital and surplus jumping $67.2 million to $95.2 million as of the third quarter 2002 compared to $28 million one year earlier. Paid-in surplus, which rose from $83.9 million at September 30, 2001 to $148.9 million at September 30, 2002, also contributed to the company's improved capitalization.

American Pioneer Life Insurance Company (Orlando, Fla.) was upgraded to C- (Fair) from D+ (Weak) due to continuous improvement in its capital position since December 2000. Premium income rose from $43.2 million in 2000 to $56.7 million for the first nine months of 2002. Capital and surplus increased by $6.8 million to $21.2 million at the end of the third quarter 2002 compared to $14.4 million at December 31, 2000.

Midwest Security Life Insurance Company (Onalaska, Wis.) was upgraded to B- (Good) from C+ (Fair) based on steadily increasing premiums and the ability to control expenses, enabling the company to augment its capital position. Premium income jumped $31.3 million, from $118.7 million during the first nine months of 2001 to $150 million during the same period in 2002. Net income increased from $5.3 million during the first three quarters in 2001 to $10 million one year later. Likewise, return on equity increased to 29.6 percent compared to 21.8 percent in 2001.

Life of the South Insurance Company (Nashville, Ga.) has exhibited improvement in profitability since September 2001 and was upgraded to C- (Fair) from D (Weak). Net income increased by $1.5 million, from $0.1 million in the first three quarters of 2001 to $1.6 million in the first three quarters of 2002. The increase in earnings helped the company's capital position as capital and surplus rose to $12.3 million compared to $10.3 million at September 30, 2001.

Sierra Health and Life Insurance Company (Las Vegas, Nev.) was upgraded to C- (Fair) from D+ (Weak) due to improved profitability, which has given the company a stronger capital position. Net income increased from a $9.2 million loss at year-end 2000 to a $1 million profit in the first nine months of 2002. As a result, return on equity rose to 7.3 percent by the end of the third quarter 2002, compared to -73.9 percent in 2000. The company also improved its investment portfolio by continuing to avoid investments in junk bonds while decreasing its stock holdings by 58 percent.

Weiss Ratings issues safety ratings on more than 15,000 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 11,000 mutual funds and more than 9,000 stocks. 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 website at www.WeissRatings.com, or starting at $15 by calling 800-289-9222.


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