A.M. Best Affirms Ratings of American Fidelity Assurance Company and American Public Life Insurance Company; Revises Outlook to Negative

Business Wire, Feb 17, 2009

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Superior) and issuer credit rating (ICR) of "aa-" of American Fidelity Assurance Company (American Fidelity) and the FSR of A- (Excellent) and ICR of "a-" of American Public Life Insurance Company (American Public). Both companies are subsidiaries of American Fidelity Corporation (AFC) (Nevada). The outlook for all ratings has been revised to negative from stable. All companies are domiciled in Oklahoma City, OK, except where specified.

The revised outlook reflects the reduction in American Fidelity's 2008 risk-based capital and the organization's large aggregate exposure to real estate-related and financial institution investments. American Fidelity reported some sizeable realized and unrealized losses in 2008. A.M. Best also has concerns with American Fidelity's exposure to further cancer insurance litigation and AFC's decline in GAAP equity last year. American Public's revised outlook reflects the negative financial impact of its cancer legal settlement and its continued exposure to cancer insurance litigation, going forward.

A.M. Best notes American Fidelity's well established niche in the voluntary education market. Additionally, the company has reported very favorable operating results over the past year and has made progress in lowering its expense ratio recently, which had been relatively high.

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, which 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.