A.M. Best Affirms Ratings of Legal & General America, Inc.'s Insurance Subsidiaries

Fri Jan 25, 2008 3:33pm EST

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OLDWICK, N.J.--(Business Wire)--A.M. Best Co. has affirmed the financial strength rating (FSR) of
A+ (Superior) and the issuer credit ratings (ICR) of "aa" of Banner
Life Insurance Company (Banner Life) (Rockville, MD) and William Penn
Life Insurance of New York (William Penn Life) (Garden City, NY). The
outlook for all ratings is stable.

Banner Life and William Penn Life are the principal insurance
subsidiaries of Legal & General America, Inc. (LGA), which represents
the U.S. operations of Legal & General Group Plc. (Legal & General), a
worldwide insurance organization headquartered in the United Kingdom.

The ratings for Banner Life and William Penn Life reflect the
companies' strong competitive position in the U.S. term life market,
profitable operations on a GAAP and international reporting basis,
sufficient capitalization and high quality investment portfolio.
Additionally, the companies benefit from an efficient expense
structure and a disciplined approach to mortality underwriting. The
ratings also reflect their status as key subsidiaries of Legal &
General, which has historically provided the capital necessary to
support new business growth in the United States.

LGA currently maintains a strong competitive position in the term
life market with a top 20 ranking in term life insurance in force and
a top 15 position based on term life issued. Sophisticated
administrative and underwriting platforms, along with a variable cost
distribution system, support LGA's efficient expense structure and
make it a low cost manufacturer. The company's profitability has grown
in recent years, with GAAP performance measures comparing favorably to
similarly rated peers. LGA's risk-adjusted capitalization is
sufficient for its current levels of insurance and investment risks,
and LGA has successfully executed three capital market transactions to
fund redundant XXX reserves.

While the ratings recognize LGA's strong market position and
strategic importance to Legal & General, A.M. Best notes LGA faces
intense competition in the term life market, which is a business that
is commoditized in nature. Furthermore, with its concentration in
mortality risk, LGA's results are subject to volatility from adverse
mortality. A.M. Best notes, however, that LGA's mortality experience
has been historically favorable and its disciplined underwriting
processes serve to mitigate adverse experience. A.M. Best expects the
group to experience volatile statutory results as the XXX
transactions, while having a positive impact on surplus, negatively
impact operating performance.

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.

A.M. Best Co.
Analysts
Darian Hala, 908-439-2200, ext. 5802
darian.hala@ambest.com
or
Thomas Rosendale, 908-439-2200, ext. 5201
thomas.rosendale@ambest.com
or
Public Relations
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com