Rhode Island Adds Stable Value Fund to 529 College Savings Program

Business Wire, March 25, 2002

Business/Technology Editors

LOUISVILLE, Ky.--(BUSINESS WIRE)--March 25, 2002

AEGON Institutional Markets to Work with Alliance Capital to

Provide the "Principal-Protection Income Portfolio" --

a Stable Value Alternative for Investors Fearing Volatility

AEGON Institutional Markets, the nation's largest provider of stable value products, today announced that the State of Rhode Island has added a stable value investment option to CollegeBoundfundsm, the state-sponsored 529 college savings program, which is managed by Alliance Capital. State-sponsored 529 college savings plans offer parents and others who are saving for college tax advantages and features including a variety of investment options, low minimum investments and no income limits.

The stable value option, known as the Principal-Protection Income Portfolio, is now one of six core options offered by CollegeBoundfund, in addition to the state's nine customized allocation portfolio mutual funds. The Principal-Protection Income Portfolio's objective is to generate higher returns than money market funds without the fluctuations in value typically associated with bond funds. The Portfolio combines a diversified bond portfolio, managed by Alliance Capital, with one or more wrapper contracts issued by highly rated insurance companies and banks.

"Parents want stability, especially in today's volatile markets. But, with college costs rising, they don't want to sacrifice performance," said Lynn Allen, director of public markets at AEGON Institutional Markets. "Stable value products, with better returns than money market funds, lower risk than stocks and less volatility than bonds, give parents peace of mind. Stable value funds have long been used in retirement plans, and are gaining recognition as a way to safely balance risk and return for college savings."

"We saw demand among investors for a college savings option that reduced risk without affecting performance," said Paul Tavares, General Treasurer for the State of Rhode Island. "The new stable value investment option will help us better meet investor needs."

"We're committed to providing parents with choices that will help them secure their children's futures through higher education," added William H. Hurry, Executive Director of the Rhode Island Higher Education Assistance Authority. "By including a stable value option for college savings, we have given parents an important new investment choice that offers solid performance combined with stability."

"We are pleased to be working with the State of Rhode Island and Alliance Capital, which have made CollegeBoundfund one of the nation's fastest growing and most respected 529 savings programs," said AEGON's Lynn Allen. "Together with Alliance, we look forward to providing CollegeBoundfund families with a choice that can help parents secure their children's futures."

About Stable Value

Stable value funds seek to maintain the value of the investor's principal and earned interest and are often created by combining bond portfolios with wrapper contracts issued primarily by insurance companies and banks. According to Hueler Analytics, a leading stable value research firm based in Minneapolis, stable value pooled fund returns averaged 6.21 percent in 2001, outperforming average returns for stock, taxable bond and money market funds. The Hueler Analytics Stable Value Pooled Fund Comparative Universe is currently comprised of 27 major pooled funds with assets totaling more $61 billion -- 85 percent of the stable value pooled fund market. Return figures are reported net of contract fees and gross of fund management fees.

Stable value funds are offered primarily through defined contribution savings and profit sharing plans, some mutual funds and IRAs and, recently, in 529 college savings plans. They are included in approximately two-thirds of 401(k) plans, and represent approximately 25 percent of all 401(k) plan assets.

About AEGON Institutional Markets

With more than $55 billion in product balances, AEGON Institutional Markets, a Louisville, Kentucky-based unit of AEGON Insurance Group, is a leading provider of savings and investment products to institutional clients in the retirement and asset-accumulation markets. Its stable value products are insurance contracts issued by Monumental Life Insurance Company, AUSA Life Insurance Company, Inc., Transamerica Occidental Life Insurance Company and Transamerica Life Insurance Company. AEGON Insurance Group is one of the world's largest insurance organizations, with $232.7 billion in assets, $219.2 billion in liabilities and $13.5 billion in shareholders' equity as of December 31, 2001 (NYSE symbol: AEG).

About CollegeBoundfund

Sponsored by the State of Rhode Island, the CollegeBoundfund is a flexible, tax-advantaged college savings program authorized by section 529 of the federal Internal Revenue Code. The CollegeBoundfund offers investors a range of investment options targeted at helping both residents and nonresidents save for children's college educations. Information is available on the Web at www.collegeboundfund.com.