A.M. Best Affirms Financial Strength and Debt Ratings for New York Life.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Aug. 7, 2001

A.M. Best Co. has affirmed the A++ (Superior) financial strength rating for New York Life Insurance Company (NYL), New York, and its subsidiaries.

Additionally, A.M. Best has affirmed an "aa-" debt rating for the surplus notes.

The ratings reflect NYL's prominent market position as a leading writer of life insurance in the U.S. with 4.2% of market share in 2000 and its strengthening position in the rapidly evolving broad U.S. financial services market. Moreover, the ratings confirm NYL's increasing diversification, continuing development of international operations, its stable earnings and strong capital position.

A.M. Best expects top-line growth to remain strong. Momentum is expected to be driven by international operations and by expansion of investment management services. The company's large domestic life insurance production is expected to grow moderately, driven by its vast network of well-trained and productive captive agency force. Profitability is expected to improve as recent cost reduction initiatives continue to add to NYL's bottom line and the drag from costs incurred due to new business development, investment management and international operations declines. NYL's sizable block of traditional life insurance should continue to provide a stable source of earnings.

NYL has a strong capital position, built almost entirely through organic growth. However, it faces the challenge of efficiently deploying this capital to generate earnings. Surplus notes comprise a minimal part of the company's surplus. Given NYL's earning power and dominant market position, it is well positioned to issue additional surplus notes, should additional capital be required to take advantage of profitable opportunities. In this respect, although a mutual company, NYL's financial flexibility is good.

Notwithstanding these strengths the company continuously faces intense competition in the domestic market to retain its dominant market position and further build individual sales momentum while controlling expenses. Furthermore, NYL faces macroeconomic and political uncertainties inherent in entering developing markets. Nevertheless, the geographic diversity and rapid establishment of dominant market share in the countries of its choice greatly mitigate the probability of a significant negative impact on the company as a whole.

New York Life Insurance Company and its wholly owned subsidiaries, is a mutual life insurance company that offers a broad array of insurance and investment products including life insurance, annuities, pension products, mutual funds and investment advisory products. The group reported consolidated statutory assets of $98 billion and capital and surplus of $7 billion as of year-end 2000.

The A ++ (Superior) financial strength rating of the following insurance companies is affirmed:

-- New York Life Insurance Company

-- New York Life Insurance and Annuity Corporation

-- NYLIFE Insurance Company of Arizona

The following debt rating for New York Life Insurance Company is affirmed:

-- "aa-" rating on $150 million 6.40% surplus notes, maturing

December, 2003;

-- "aa-" rating on $300 million 7.50% surplus notes, maturing

December, 2023.

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.