A.M. Best Places Rating of FLAC Holdings, LLC Insured Notes Under Review

Business Wire, Feb 4, 2008

OLDWICK, N.J. -- A.M. Best Co. has placed the debt rating of "aaa" of the $134 million floating rate insured notes, due December 15, 2018 of FLAC Holdings, LLC (FLAC Holdings) (New York, NY) under review with negative implications.

The rating previously took into consideration the following: the financial strength rating of Forethought Life Assurance Company (FLAC) (Batesville, IN); a review of the actuarial assumptions and their impact on cash flow; an analysis of the deal model cash flow projections including stress testing of key risk factors, interest rate and investment conditions; review of the structure, legal documentation and regulatory environment. In arriving at the rating of "aaa", A.M. Best considered the securities stand-alone rating and the credit enhancement provided by XL Capital Assurance Inc. (XLCA), a financial guarantor and operating subsidiary of Security Capital Assurance Limited (SCA) (Bermuda).

The under review status of FLAC Holdings' rating is due solely to A.M. Best's concerns regarding financial pressures currently being experienced by SCA in executing its capital remediation plans and the change in credit profile of XL Capital Group (XL Capital) (Cayman Islands), which provides substantial reinsurance support to SCA's operating subsidiaries and guarantees certain SCA obligations. A.M. Best will continue to monitor SCA's capital strengthening activities to assess any further impact to its ratings (both long and short term).

For access to special reports, analytical methodologies and transactions relating to structured finance, please visit http://www3.ambest.com/sfc/.> Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.