A.M. Best Comments on Rating of Conseco Insurance Subsidiaries.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 29, 2002

The A- financial strength rating of the primary insurance subsidiaries of Conseco, Inc. (NYSE: CNC) remain under review with negative implications.

The rating was placed under review on October 3, 2001 following Conseco's announcement that it would take charges in the third quarter of 2001, reducing after tax earnings by $471.2 million. This comment follows an earlier announcement today by Conseco of the initiatives underway to fund its corporate debt obligations through the balance of 2002 and into 2003.

Since this time, A.M. Best has been conducting a comprehensive review of Conseco's insurance and finance operations, as well as the potential impact of continued weak economic conditions on the organization's ability to successfully complete its ongoing financial restructuring. A.M. Best recognizes that weakened economic conditions have resulted in a shortfall on expected earnings and cash flow from its finance business. This has increased Conseco's reliance on cash generated from its insurance operating subsidiaries, and resulted in the company's need to pursue alternative cash generation initiatives in order to service its corporate debt obligations. At this point, A.M. Best believes that policyholder interests will remain secure as management pursues various initiatives to fulfill its upcoming corporate debt obligations, and that capital maintained in its insurance subsidiaries will remain well within Best's near term expectations for their current rating levels.

Over the past 18 months Conseco, through a restructuring plan, identified over $2 billion of non-strategic assets that were to be sold or monetized in order to meet corporate debt commitments through 2003. While not executed in its original format, A.M. Best has reviewed the company's revised plans and expects that the sale of additional assets and cash generation options will be sufficient to allow it to continue to meet corporate obligations through 2003. Although A.M Best anticipates that current economic conditions will continue to pressure earnings on both its insurance and finance operations over the near-term, it does not expect that the planned cash generation transactions will have a material impact Conseco's future earnings. A.M. Best does, however, also recognize the execution and timing risk associated with management's current plans.

In connection with the rating review of Conseco, Inc. and its subsidiaries, A.M. Best has also evaluated information and analysis compiled by both the company and actuarial consultants concerning the recoverability and expected impact on future earnings and financial flexibility associated with intangible assets carried on its balance sheet. Although A.M. Best is satisfied that the analysis supports the rating agency's current expectations for Conseco's insurance subsidiaries' financial strength rating, we will continue to monitor the impact that unexpected changes might have on these assets and reported earnings and capitalization.

The following outlines A.M. Best's expectations and potential rating actions for the Conseco insurance subsidiaries through the balance of 2002:

Dates                             Events
------------------ ---------------------------------------------------
1st Qtr 2002       Announcements concerning Conseco, Inc.'s 2002
                   alternative liquidity initiatives. A.M. Best
                   expects announcements concerning the sale of its
                   variable annuity business, its plans for joint
                   venturing its  manufactured housing floor plan

                   business, and the reinsurance of several life and
                   health insurance blocks of business. A.M. Best will
                   review the terms of such transactions, as well as
                   the amounts and timing of the cash they are
                   expected to generate. The ratings of the Conseco
                   insurance subsidiaries could be lowered more than
                   one level if such announcements are not in place by
                   the end of the first quarter of 2002.

2nd Qtr 2002       Execution of Conseco, Inc.'s 2002 alternative
                   liquidity initiatives. A.M. Best expects that the
                   above mentioned transactions will be executed and
                   cash will be received by Conseco by the end of the
                   second quarter, well in advance of its scheduled
                   debt repayments on Conseco Finance debt in
                   September 2002, and Conseco, Inc. notes in October.
                   Although cash from these transactions is expected
                   to be received by the end of the second quarter,
                   the financial strength ratings of the Conseco
                   insurance operating subsidiaries will likely remain
                   under review, and be potentially subject to
                   downgrades, pending further evidence of the success
                   of management's operational restructuring plan.

3rd & 4th          Evidence of the successful execution of its
Qtrs 2002          operational restructuring efforts. A.M. Best will
                   continue to review Conseco's operational
                   restructuring and its ongoing ability to generate
                   sufficient earnings and cash flows necessary to
                   service its debt obligations through the balance of
                   2002 and throughout 2003. A.M. Best will also
                   continue to evaluate the impact that weak economic
                   conditions will have on its operating activities.
                   Therefore, the financial strength ratings of the
                   Conseco insurance subsidiaries could be downgraded
                   one or more rating levels if either macro economic
                   conditions or other external events impede the
                   company's ability to sustain its earnings and cash
                   flows at levels that are more than sufficient to
                   cover corporate debt obligations through 2003. A.M.
                   Best will only consider the appropriateness of
                   affirming the current financial strength rating of
                   the Conseco insurance subsidiaries upon both the
                   successful execution of its alternative 2002
                   liquidity initiatives and when the rating agency is
                   satisfied that the levels of cash produced from its
                   restructured operating subsidiaries will more than
                   adequately cover its 2003 debt commitments.

A.M. Best notes that the potential exists for certain events outside of the company's control--including continued macro economic conditions, regulatory and accounting actions and class action lawsuits--to pose long-term financial challenges for the group. Consequently, A.M. Best will continue to monitor closely the potential impact of these factors on the organization's ability to meet its obligations to both its insurance policyholders and its corporate creditors.

The financial strength rating of the following insurance subsidiaries of Conseco Inc. remain under review with negative implications.

- Conseco Annuity Assurance Co.

- Conseco Direct Life Insurance Co.

- Conseco Variable Insurance Co.

- Conseco Medical Insurance Co.

- Conseco Life Insurance Co.

- Conseco Senior Health Insurance Co.

- Conseco Health Insurance Co.

- Conseco Life Insurance Company of New York

- Bankers Life & Casualty Co.

- Manhattan National Life Insurance Co.

- Pioneer Life Insurance Co.

- Washington National Insurance Co.

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.