A.M. Best Downgrades Ratings of SPJST.

OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength rating (FSR) to B+ (Good) from B++ (Good) and the issuer credit rating (ICR) to "bbb-" from "bbb" of SPJST (the Society) (Temple, TX). The outlook for both ratings is stable.

These rating actions are based on the Society's net operating loss in 2007, elevated level of risk in its investment portfolio, high level of unrealized capital losses relative to its modest surplus position and spread compression associated with its large fixed annuity reserve base. A.M. Best notes that the Society's accumulated unrealized losses from its bond and stock portfolios were approximately 40% of its unassigned funds at year-end 2007. Based on the ongoing market volatility and weak credit market, A.M. Best believes that the recovery in market values may continue to put pressure on the Society's balance sheet, noting that unrealized losses have increased further through first quarter 2008. Relative to its fraternal peers, the Society has a higher aggregate exposure to equities, mortgage loans and below investment grade bonds relative to surplus and liability profile.

Partially offsetting these factors are the Society's long established fraternal presence across Texas, sizeable level of fraternal members and current adequate risk-adjusted capitalization for its ratings. Despite the reported loss in 2007, the Society has reported positive statutory operating gains in four of the past five years.

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.