A.M. Best Downgrades Rating of First Colony

A.M. Best Downgrades Rating of First Colony

Business Editors

OLDWICK, N.J.–(BUSINESS WIRE)–Oct. 20, 2003

A.M. Best Co. has affirmed the financial strength ratings of A+ (Superior) of GE Financial Assurance insurance companies (GEFA) except for First Colony Life Insurance Company (First Colony) (Lynchburg, VA), which was downgraded to the group rating of A+ (Superior) from A++ (Superior). First Colony is a member of the GE Financial Assurance (Richmond, VA) group of insurance companies, part of the General Electric Company. The outlooks for these companies are stable.

These rating actions reflect A.M. Best’s group rating philosophy, which, in part, holds that since core subsidiaries within an insurance group are managed collectively, their ratings will be consistent across the group. The rating action also reflects GEFA’s consideration of staged consolidation of its legal entities. The objective of legal entity consolidation is to simplify market identity, increase capital efficiency and reduce the expenses associated with operating multiple companies. As such, this rating is not in response to an underperformance on the part of First Colony.

The ratings of the GEFA companies reflect the organization’s prominent positions in its target markets, solid operating results, distribution breadth, well-balanced business risk profile and the diversity of insurance liabilities. The ratings also reflect GEFA’s historically consistent operating performance that has grown both organically and through acquisitions, along with its consistently strong investment returns. GEFA maintains a solid capital structure supported by its strong parent company.

Partially offsetting these positive rating factors is the capital management strategy deployed by GEFA. The GEFA companies are managed with a level of capital to generate returns acceptable to its publicly traded industrial parent, viewed as superior by A.M. Best but not at an A++ level.

The financial strength rating of A+ (Superior) has been affirmed for the following subsidiaries of GE Financial Assurance Group:

— American Mayflower Life Insurance Company of New York

— Federal Home Life Insurance Company

— GE Capital Life Assurance Company of New York

— GE Life and Annuity Assurance Company

— General Electric Capital Assurance Company

— Union Fidelity Life Insurance Company

The financial strength rating of A (Excellent) has been affirmed for the following subsidiaries of GE Financial Assurance Group:

— GE Group Life Insurance Company

— Heritage Life Insurance Company

— Professional Insurance Company

A.M. Best Co., established in 1899, is the world’s oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best’s Web site at www.ambest.com.

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