Federated Life Insurance Rated 'Api' by S&P

Business Wire, Sept 22, 1998

NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 9/22/98-- Standard & Poor's today assigned its single-'Api' insurer financial strength rating to Federated Life Insurance Co.

Federated Life is licensed in 44 states. The company's major line of business is Ordinary Life Insurance, and it is a member of Federated Mutual Group, a large insurance group. The company commenced operations in 1959.

Below is a summary of the analysis that resulted in a rating of single-'Api'. -- Capitalization, as measured by Standard & Poor's capital

adequacy model, is considered to be excellent at a ratio of

over 300%. -- The company's rating is limited to the rating of its parent,

Federated Mutual Insurance Co., which is single-'Api'. -- The company's ratio of unassigned funds to total adjusted

capital, a measure of retained earnings, stands at an impressive

90.7%. -- The company's liquidity ratio of 222.2% is superior. -- The investment risk index that measures earning volatility together

with investment risk is limiting rating factor.

'Pi' ratings, denoted with a pi subscript, are insurer financial strength ratings based on an analysis of an insurer's published financial information and additional information in the public domain. The ratings do not reflect in-depth meetings with an insurer's management and are therefore based on less comprehensive information than ratings without a 'pi' subscript. Pi ratings are reviewed annually based on a new year's financial statements, but may be reviewed on an interim basis if a major event that may affect the insurer's financial security occurs. Ratings with a pi subscript are not subject to potential CreditWatch listings.

Ratings with a pi subscript generally are not modified with 'plus' or 'minus' designations. However, such designations may be assigned when the insurer's financial strength rating is constrained by sovereign risk or the credit quality of a parent company or affiliated group, Standard & Poor's said.---CreditWire