A.M. Best Changes Under Review Implications to Positive for the Cotton States Insurance Group.

Business Editors/Insurance Writers

OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 9, 2004

A.M. Best Co. has changed the implications of the under review status to positive from negative of the financial strength ratings of B (Fair) for Cotton States Mutual Insurance Company (Cotton States Mutual) and its subsidiary, Shield Insurance Company (Shield), and the financial strength rating of B++ (Very Good) of Cotton States Life Insurance Company (Cotton States Life) (Nasdaq:CSLI). All companies are located in Atlanta, GA.

These actions follow the December 30, 2003, announcement that Cotton States Insurance Group and COUNTRY Insurance & Financial Services (COUNTRY) (Bloomington, IL) have entered into definitive agreements regarding the acquisition of Cotton States Life by merger and the affiliation of Cotton States Mutual and Shield with COUNTRY.

According to the terms of the agreement, business from Cotton States Mutual will be pooled with business from the existing COUNTRY property/casualty pool. Each pool member will share proportionally in the pool's premiums, losses and underwriting expenses based on the surplus of each company. Shield will be 100% reinsured by COUNTRY Mutual Insurance Company (Illinois), the lead company of the COUNTRY property/casualty pool. The property/casualty alliance is intended to allow both organizations to diversify risk and spread costs over a larger geographical area. COUNTRY will also assume control of Cotton States Mutual and Shield's boards of directors.

The ratings will remain under review pending the completion of the terms outlined in the definitive agreement and discussions with management regarding future business plans. A.M. Best expects to extend the higher financial strength rating of COUNTRY to Cotton States Mutual and Shield at the close of the transaction.

Under the definitive agreement and merger plan of Cotton States Life with a subsidiary of COUNTRY Life Insurance Company (COUNTRY Life) (Illinois), Cotton States Life stockholders will receive $20.25 cash for each share of outstanding common stock of Cotton States Life. Consequently, Cotton States Life will become a privately-held company. The under review status with positive implications reflects the anticipated benefits Cotton States Life will receive from the proposed affiliation with the higher rated COUNTRY Life.

These definitive agreements -- which have been approved by the boards of directors of Cotton States and COUNTRY -- are subject to regulatory, shareholder and other customary approvals and conditions. The transaction is expected to be completed in the second quarter of 2004.

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.