Fitch Ratings Updates Quantitative Ratings on U.S. Life Insurance Companies.

Publication: Business Wire

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COPYRIGHT 2007 Business Wire

CHICAGO -- Fitch Ratings has updated the Quantitative Insurer Financial Strength (Q-IFS) ratings assigned to life insurance companies in the U.S., resulting in 196 rating affirmations, 29 rating upgrades, and 13 rating downgrades. Further, Fitch has assigned initial Q-IFS ratings to an additional 19 U.S. life insurance companies.

The update of Fitch's Q-IFS ratings assigned to U.S. life insurance companies was based on statutory financial information through year-end 2006, and reflected generally modest improvement in balance sheet fundamentals and stable earnings performance.

'The industry has benefited in recent years from low bond defaults and improved equity markets. Life insurer ratings have been relatively stable in 2006 as seen in the high percentage of rating affirmations, and rating upgrades that outpaced rating downgrades,' said Douglas Meyer, Managing Director and U.S. Life Insurance Sector Head.

'Fitch is committed to providing more comprehensive coverage of the U.S. life insurance sector to meet growing demand for Fitch's ratings. Fitch believes that these Q-IFS ratings provide an invaluable tool in assessing the financial strength of U.S. life insurance companies, particularly those companies that do not have broad rating coverage from all agencies.'

Q-IFS ratings are generated using a model that utilizes statutory financial statement information that individual companies file with state regulators. The model incorporates 'rating logic' that mirrors many aspects of the quantitative analysis that is used to assign traditional IFS ratings. Traditional IFS ratings incorporate both quantitative and qualitative factors and typically involve in-depth discussions with senior management. The Q-IFS ratings incorporate a 'q' subscript to differentiate the ratings from traditional IFS ratings.

While recognizing the limitations associated with using a strict quantitative rating approach, Fitch believes that Q-IFS ratings will provide a reasonable representation of the life insurance company's stand-alone financial strength and operating profile.

For further information on Fitch's Q-IFS ratings, Fitch has published a special report titled 'Quantitative Insurer Financial Strength Ratings Methodology: U.S. Life Insurers', which is available on the Fitch web site www.fitchratings.com and can be found in the Criteria Reports section on the Sector marked 'Insurance' under 'Financial Institutions'. The report provides an overview of the Q-IFS rating program and the rating model, a discussion of the limitations regarding the use of the Q-IFS ratings, and a review of the rating scale and definitions.

Quantitative Insurer Financial Strength ratings affirmed by Fitch

Entity / NAIC Code / Prior Rating / Current Rating

--5 Star Insurance Company (LA) / 77879 / 'BBBq';

--Alabama Reassurance Company, Inc (AL) / 94331 / 'BBBq';

--Amalgamated Life Insurance Company (NY) / 60216 / 'BBBq';

--American-Amicable Life Insurance Company of Texas(TX) / 68594 / 'Aq';

--American Capitol Insurance Company (TX) / 60291 / 'BBq';

--American Century Life Insurance Company (OK) / 97810 / 'Bq';

--American Exchange Life Insurance Company (TX) / 60372 / 'BBq';

--American Fidelity Assurance Company (OK) / 60410 / 'BBBq';

--American Fidelity Life Insurance Company (FL) / 60429 / 'BBBq';

--American Home Life Insurance Company (KS) / 60542 / 'BBq';

--American Life & Accident Insurance Company of Kentucky (KY) / 60666 / 'BBBq';

--American Modern Life Insurance Company (OH) / 65811 /...

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