Canada Life Financial Corp.'s U.S. Subs Off Watch; Outlook Negative

Business Wire, Oct 16, 2003

Business Editors

NEW YORK--(BUSINESS WIRE)--Oct. 16, 2003

Canada Life Financial Corp.'s U.S. Subs Off Watch; Outlook Negative

Rationale

On Oct. 16, 2003, Standard & Poor's Ratings Services affirmed the 'AA' financial strength ratings on Canada Life Insurance Co. of America (CLICA) and Canada Life Insurance Co. of New York (CLNY). At the same time, Standard & Poor's removed the ratings from CreditWatch, where they were placed Dec. 9, 2002. The outlook is negative. The ratings on parent company Canada Life Financial Corp. (GWO:TSX) and its other subsidiaries also were affirmed. (See list below.)

The ratings actions reflect the provision of guarantees from The Canada Life Assurance Co. to its two U.S. subsidiaries. The counterparty credit rating on CLICA has been withdrawn, now that it is guaranteed by The Canada Life Assurance Co.

Standard & Poor's views The Canada Life Assurance Co.'s Canadian operations as core to Great-West Lifeco Inc. and expects these operations to benefit from the leading business position and scale that the combined operations hold in the Canadian life insurance industry.

Outlook

The negative outlook reflects the undercapitalization (as measured by Standard & Poor's Canadian capital adequacy ratio) of Canada Life Financial Corp. post transaction, due to the significant amount of capital that was dividended up to its new parent, in part to finance the acquisition, and the integration risk that is associated with assimilating Canada Life's three primary business units in Canada, the U.S., and Europe into Great-West Lifeco simultaneously. Although Standard & Poor's clearly understands the strategic rationale for the purchase of Canada Life's Canadian operations, there is still a degree of uncertainty as it relates to Great-West Lifeco's strategic commitment to the non-Canadian operations in Europe and the U.S. and what these operations will look like after closing.

Ratings Affirmed               To                   From

Canada Life Insurance Co.
of America
Counterparty credit rating    Withdrawn         AA/Watch Neg/--
Financial strength rating(a)  AA/Negative       AA/Watch Neg

(a)Guaranteed by The Canada Life Assurance Co.

Canada Life Insurance Co.
of New York
Financial strength rating(a)  AA/Negative       AA/Watch Neg

(a)Guaranteed by The Canada Life Assurance Co.

Canada Life Financial Corp.
Counterparty credit rating    A/Negative/--
Prelim. preferred stock
Canadian scale                P-2(High)
Global scale                  BBB+

Canada Life Assurance Co. (The)
Counterparty credit rating    AA/Negative/--
Financial strength rating     AA/Negative
Subordinated debt rating      A+
Prelim. preferred stock
Canadian scale                P-1(Low)
Global scale                  A

Canada Life Assurance Co. (US Branch)
Counterparty credit rating    AA/Negative/--
Financial strength rating     AA/Negative

Canada Life Capital Trust
Canada Life Capital Securities series A and B (CLiCS)
Preferred stock
Canadian scale                P-1(Low)
Global scale                  A

Canada Life Capital Corp. Inc.
Prelim. preferred stock(b)
Canadian scale                P-2(High)
Global scale                  BBB+

(b)Guaranteed by Canada Life Financial Corp.

Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Credit Ratings Actions.