A.M. Best Downgrades Issuer Credit Ratings of Securian Financial Group Members; Revises Outlook to Negative

Business Wire, April 10, 2009

OLDWICK, N.J. -- A.M. Best Co. has downgraded the issuer credit ratings (ICR) to “aa-“ from “aa” and affirmed the financial strength rating (FSR) of A (Superior) of Minnesota Life Insurance Company (Minnesota Life) and its subsidiary, Securian Life Insurance Company (Securian Life) (both of St. Paul, MN). In addition, A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a” of Cherokee National Life Insurance Company (Macon, GA). All the above companies are members of the Securian Financial Group (Securian).

Concurrently, A.M. Best has downgraded the debt rating to “a” from “a ” on the $125 million 8.25% existing surplus notes due September 2025 of Minnesota Life. The outlook for all ratings has been revised to negative from stable.

The rating actions reflect the decline in Securian’s capitalization, losses on both a statutory and GAAP basis in 2008, continued exposure to equity market volatility and potential for additional investment losses in 2009.

Minnesota Life recorded a sizable decline in its capital position on both a statutory and GAAP basis during 2008. This decline was driven primarily by investment losses, both realized and unrealized within its fixed income, equity and securities lending portfolios. Operating earnings also were impacted by lower asset-based revenue and increased reserving requirements due to poor equity market performance.

The negative outlook reflects A.M. Best’s concern that Securian has the potential for additional capital losses within its fixed income, including stresses on its commercial mortgage-backed portfolio and equity and alternative asset classes. Securian has exposure to equity market volatility through its asset management and separate account business lines, as well as in its corporate pension program through increased pension contributions.

Despite the decline in capitalization, A.M. Best believes that Securian’s life companies remain well capitalized. In addition, its debt-to-capital ratio remains within the range for its ratings, and there are no debt maturities in the near term. The ratings continue to recognize the group’s diversified sources of earnings, conservative investment management philosophy, sound liquidity position and diverse product portfolio.

Minnesota Life’s operating earnings also recognize the increased revenue in many of its core business lines, its conservative financial and expense management strategies and continued focus on increasing distribution and scale.

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

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

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.