A.M. Best Downgrades Issuer Credit Ratings of the USHEALTH Group Members.

OLDWICK, N.J. -- A.M. Best Co. has downgraded the issuer credit ratings (ICR) to "bb" from "bb+" and affirmed the financial strength rating of B (Fair) of National Foundation Life Insurance Company (NFL) and Freedom Life Insurance Company of America (FLICA), both members of the USHEALTH Group. All companies are domiciled in Fort Worth, TX. The outlook for all ratings is stable.

The downgrading of the ICRs reflects the larger than expected 2007 operating loss reported by NFL, which was due to a non-recurring contingency charge related to outstanding litigation in a non core line of business.

A.M. Best acknowledges that the group has taken steps to ensure the risk-based capital position is adequate for its current ratings. The group received capital contributions in the form of a surplus note to NFL from its parent, an extension of the maturity of the organization's bank line of credit and the sale of its non-core Medicare supplement and life insurance product lines.

Additionally, NFL and FLICA operate in the increasingly competitive individual major medical market. Both companies are competing against larger competitors that have the advantage of deeper network discounts, better economies of scale and greater financial resources. A.M. Best also views cautiously the group's considerable growth plans over the next few years, particularly since a good portion of it is tied to fixed rate individual major medical products, which do not have credible experience.

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.