A.M. Best Assigns Issuer Credit Rating to CUNA Mutual Insurance Society.

OLDWICK, N.J. -- A.M. Best Co. has assigned an issuer credit rating (ICR) of "a+" and affirmed the financial strength rating (FSR) of A (Excellent) of CUNA Mutual Insurance Society (CUNA Mutual) (Madison, WI), the lead parent organization within the CUNA Mutual Group. The outlook assigned to the ICR is stable, and the outlook for the FSR is stable.

The ratings of CUNA Mutual reflect its consolidated positive statutory and GAAP net operating results, favorable risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio and its diverse business profile that is supported by several lines of business and distribution channels. The ratings also acknowledge CUNA Mutual's long-established position as a leader in providing financial solutions through its life, health and retirement products to members and employees of credit unions. CUNA Mutual Group operates through life, property/casualty, and investment companies in the U.S., Canada and selected international markets. With the ongoing implementation of three years of transformation initiatives, CUNA Mutual has improved its overall operating efficiency in its core target market of credit unions. Consistent growth has been recorded in the consolidated policyholders' surplus funds both on a statutory and GAAP basis over the latest five-year period.

Partially offsetting these strengths are CUNA Mutual's fluctuating overall and by-line statutory earnings, a lack of consistent growth in net premiums written from its core credit life and health lines of business, its high exposure to subprime and Alt-A securities relative to its consolidated capital and surplus funds and the challenges to further improve the modest operating results associated with its asset accumulation business. While CUNA Mutual's overall operating results have been profitable over the past five years, A.M. Best notes that some of its key lines of business continue to face growth challenges, especially in its core ordinary life, credit life and credit health businesses. Its growing asset accumulation business also may be challenged due to intense competition in the retirement market place and significantly heightened volatility in the financial markets, while declining interest rates could further lower the portfolio yield.

A.M. Best also notes that CUNA Mutual's current exposure to fixed income securities tied to subprime and Alt-A mortgages could be vulnerable to impairment losses due to lingering credit market challenges. Furthermore, the increased investments in below investment grade bonds combined with investments in alternative assets and other non-traditional investments could pose additional financial risks to the company's balance sheet. Nonetheless, A.M. Best believes that CUNA Mutual's excellent risk-adjusted capitalization remains more than adequate to withstand potential realized and unrealized capital losses resulting from market volatility and continuing concerns over the credit market in general.

Concurrently, A.M. Best has withdrawn the FSR of A (Excellent) and assigned a category NR-5 (Not Formally Followed) to CUNA Mutual Life Insurance Company (CUNA Mutual Life) following its merger into CUNA Mutual on December 31, 2007. In addition, A.M. Best has assigned an ICR of "a-" and downgraded the FSR to A- (Excellent) from A (Excellent) of MEMBERS Life Insurance Company (MEMBERS Life) (Madison, WI). The outlook assigned to the ICR is stable, and the outlook for the FSR is stable. Following the December 31, 2007 commutation of an intercompany reinsurance agreement with CUNA Mutual, MEMBERS Life no longer meets A.M. Best's requirements for a group rating with CUNA Mutual.

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.