A.M. Best Assigns Ratings to New York Life's Funding Agreement-Backed Securities Programs; Revises Debt Outlook to Positive.

OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "aa+" to the two funding agreement-backed securities (FABS) programs established by New York Life Insurance Company (New York Life) (New York, NY). Additionally, A.M. Best has assigned an issuer credit rating (ICR) of "aa+" to New York Life, the lead operating company. A.M. Best has also assigned a debt rating of "aa+" to the outstanding notes issued under New York Life's European Medium-Term Notes (EMTN) and Global Medium-Term Notes (GMTN) programs. All the above ratings have a positive outlook.

Concurrently, A.M. Best has affirmed the financial strength rating of A++ (Superior) of New York Life and its subsidiaries. The rating outlook is stable. A.M. Best has also affirmed the remaining outstanding debt ratings of the group. The rating outlook has been revised to positive from stable.

These ratings reflect New York Life's prominent market position in the U.S. life insurance industry, its strong position in the broader U.S. financial services market and its ample fixed charge coverage and strong capital and liquidity positions. The ratings also reflect New York Life's industry leading level of new sales, highly productive career agency force, strong profitability from its traditional life insurance line and favorable asset quality producing a high level of investment income.

These positive factors are partially offset by the intense competition the group faces in its core individual life, asset accumulation and financial services businesses. Moreover, the increasing revenue and diversification in its international operation increases New York Life's exposure to risk.

New York Life's spread based business represented over $19 billion of assets as of September 2004 and is managed in the Guaranteed Products Division of its investment management subsidiary, New York Life Investment Management, LLC (NYLIM). The Guaranteed Products Division produces about 12% of consolidated GAAP operating earnings, with Guaranteed Products generating about one-third of total investment sales. This segment provides earnings diversification and enables the company to leverage its investment management expertise. Furthermore, New York Life's prudent asset-liability management strategies ensure that close matches between funding agreement assets and liabilities are maintained.

New York Life's exposure to institutional spread based liabilities represents about 17% of consolidated liabilities, below management's 25% target. NYL's $5 billion EMTN program was established in 2001 to issue fixed or floating rate notes to institutional investors outside of the United States on a private placement basis through a limited liability company, New York Life Funding (NYLF) (Cayman Islands). The company's $3 billion GMTN program was initially established in 2003 to issue fixed or floating rate notes to institutional investors both inside and outside of the United States on a private placement basis through a statutory trust, New York Life Global Funding's (NYLGF), which was organized in series under the laws of the State of Delaware. For both programs, the notes have been issued in various currencies, are limited recourse obligations of NYLF and NYLGF and are secured solely by one or more series of funding agreements issued to the funding vehicles by New York Life, which is under the laws of the State of New York.

Based on A.M. Best's analysis of the FABS structures utilized by New York Life, the programs and notes will carry the ICR of "aa+" of New York Life. This reflects that each series of notes is secured by the underlying funding agreements, which are unsecured obligations of New York Life's general account. In addition, in the event of an insolvency of a New York domestic insurance company, claims under the funding agreements would be paid equally in priority (i.e. pari passu) with New York Life's policyholders. Therefore, in assigning the ICR above, A.M. Best believes that all investors in New York Life's FABS are exposed to the inherent credit, liquidity and business risks of the sponsoring insurance company, New York Life.

For a complete listing of New York Life Insurance Company's debt and financial strength ratings as well as a list of issuances under its FABS programs, please visit http://www.ambest.com/press/122308newyorklife.pdf.

For additional insight, please refer to A.M. Best's methodology, Rating Funding Agreement-Backed Securities at http://www.ambest.com/ratings/methodology.html.

For a list of A.M. Best's debt ratings, please visit http://www.ambest.com/debt.

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 http://www.ambest.com.