A.M. Best Affirms B++ Rating of Conseco Life Subsidiaries.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 25, 2000

A.M. Best Co. has affirmed the "B++" (Very Good) financial strength rating of Conseco Inc.'s principal life insurance subsidiaries and revised their under review status to positive from developing.

The rating action follows Conseco's announcement that it has successfully renegotiated the term structure of its bank debt. Under terms of the refinancing, Conseco paid down $650 million of its bank loans and extended its remaining September bank maturities to December, 31, 2001. The favorable rating outlook reflects progress Conseco has made in substantially improving the liquidity profile of the parent holding company and recognizes the initiatives underway in repositioning its finance unit's operations to alleviate capital strain on the organization. It also reflects steps taken by Conseco to improve the underlying earnings performance of its insurance subsidiaries, as well as review of a study completed by an independent third party actuarial firm on the recoverability of intangible assets (cost of policies produced, cost of policies purchased and goodwill) on Conseco's balance sheet, which had been requested by A.M. Best.

Conseco Inc.'s liquidity position has improved dramatically over the past several weeks. This is the result of the successful completion of the sale of several non-strategic businesses within its finance unit and actions taken to both downsize the scale and improve the efficiency of the finance unit's remaining businesses, which has reduced its cash needs. The restructuring of the finance unit's business model is designed to result in positive cash flow at Conseco Finance over the near-term. In addition to the announced pay down of outstanding bank borrowings, these actions have enabled the company to build a significant amount of cash within the organization.

The company anticipates that the continuation of its restoration program over the next twelve months will result in total cash proceeds of over $2 billion since the program's inception. While the company's asset sales to date have been completed at or above anticipated pricing levels, A.M. Best believes that some of the remaining assets to be sold as part of Conseco's capital restructuring program are subject to valuation volatility, particularly its investment in Tritel, Inc. However, A.M. Best believes the company has conservatively estimated the total value of these investments relative to its cash needs and has built in a sizable cushion to meet its financial commitments through the second half of 2001. Under terms of the agreement, Conseco also has the option of extending its bank loans through 2005. Conseco maintains other ancillary businesses or assets not presently targeted in its restructuring program that further enhance the company's financial flexibility.

A.M. Best will continue to monitor Conseco's overall operations over the near-term with respect to its rating outlook.

The "B++" financial strength ratings of the following insurance subsidiaries of Conseco, Inc. have been affirmed and their under review status changed to positive from developing. A.M. Best has also affirmed the B+ rating of Continental Life Insurance Co., and changed its rating status to positive.

-- Conseco Annuity Assurance Co.

-- Conseco Direct Life Insurance Co.

-- Conseco Variable Insurance Co.

-- Conseco Medical Insurance Co.

-- Conseco Life Insurance Co.

-- Conseco Senior Health Insurance Co.

-- Conseco Health Insurance Co.

-- Conseco Life Insurance Company of New York

-- Bankers Life & Casualty Co.

-- Continental Life Insurance Co.

-- Frontier National Life Insurance Co.

-- Manhattan National Life Insurance Co.

-- Pioneer Life Insurance Co.

-- United Presidential Life Insurance Co.

-- Vulcan Life Insurance Co.

-- Washington National Insurance Co.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.