A.M. Best Downgrades Ratings of Citizens Security Life Insurance Company and Its Affiliate; Revises Outlook to Negative

Business Wire, Nov 6, 2008

OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength ratings (FSR) to C (Marginal) from B- (Fair) and issuer credit ratings (ICR) to "b" from "bb-" for Citizens Security Life Insurance Company (Citizens Security) [OTC: CFIN] and its affiliate, United Liberty Life Insurance Company (United Liberty) (both of Louisville, KY). The outlook for all ratings has been revised to negative from stable.

The rating downgrades reflect Citizens Security's sharp reduction in capital and surplus capitalization, reflecting both operating losses and realized investment losses. The negative outlook reflects Citizens Security's future investment exposures and the potential for current unrecognized loss positions to be realized; thus, further weakening the company's capital position.

The ratings also consider Citizens Security's positive, albeit fluctuating, operating earnings over the past several years, a marketing strategy focused on select core business lines and an organizational focus on expense reduction. A.M. Best will continue to monitor the company's investment exposure and capitalization levels.

United Liberty's capital levels remain modest, and it has been inactive in recent years.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.> 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.