A.M. Best Affirms and Assigns Ratings to Merrill Lynch Life and Its Affiliate, ML Life Insurance Company of New York.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and assigned issuer credit ratings (ICR) of "a" to Merrill Lynch Life Insurance Company (Little Rock, AK) and ML Life Insurance Company of New York (together known as the Merrill Lynch Insurance Group) (MLIG) (New York, NY). The outlook for all ratings is stable.

The ratings of MLIG are based upon the significant benefits it enjoys as a subsidiary of Merrill Lynch & Co., Inc. (Merrill Lynch), one of the world's largest financial management and advisory companies. MLIG is a core operating entity within Merrill Lynch with full access to over 15,000 financial advisors. MLIG maintains a strong market position due to Merrill Lynch's global brand name recognition, MLIG's conservative investment portfolio, sound liquidity and excellent financial flexibility. Additionally, Merrill Lynch executed a Keep Well Agreement in June 2003 to provide financial support as needed to MLIG. A.M. Best expects Merrill Lynch to remain supportive of MLIG through its renewed product rollout, implementation of new technology and strong market position as a variable annuity writer.

Offsetting these strengths is the limited scale of MLIG's operations within Merrill Lynch, its narrow product distribution and the high correlation between MLIG's results and the performance of the equity markets. A.M. Best believes there is the potential for future earnings volatility due to this combination of factors; however, A.M. Best expects MLIG to continue to maintain adequate risk-adjusted capitalization.

MLIG has introduced several new variable products as part of its strategy to re-focus on the manufacturing and marketing of proprietary products to meet the evolving wealth management needs of Merrill Lynch consumers. These new initiatives should facilitate continued sales and earnings growth throughout 2006. A.M. Best believes that the new product suite will help to improve MLIG's revenues to achieve a competitive edge among the products available through the Merrill Lynch financial advisors.

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For current Best's Ratings, independent data and analysis on more than 1,100 individual life/health companies and A.M. Best groups, please visit www.ambest.com/lh.

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.