A.M. Best Places Ratings of Zurich Life U.S. Companies Under Review.

Business Editors/Insurance Writers

OLDWICK, N.J.--(BUSINESS WIRE)--May 30, 2003

A.M. Best Co. has placed the A (Excellent) financial strength ratings of three of the four insurance companies comprising Zurich Life U.S. (ZLUS)--Federal Kemper Life Assurance Company (FKLA), Zurich Life Insurance Company of New York (ZLICONY) and Zurich Life Insurance Company of America (ZLICA)--under review with developing implications. The financial strength rating of the fourth ZLUS insurer, Kemper Investors Life Insurance Company (KILICO), has been placed under review with negative implications.

The financial strength rating of Fidelity Life Association (FLA), a mutual insurer that historically has operated in tandem with ZLUS by sharing common management, employees and many administrative services, also has been placed under review with negative implications.

These actions follow the announcement by Zurich Financial Services (ZFS), the ultimate parent of ZLUS, of its intention to sell FKLA, ZLICONY, ZLICA, several other subsidiaries and a portion of KILICO's business (via reinsurance transactions) to Bank One Corp., an Illinois-based financial institution. KILICO will remain a subsidiary of ZFS and will become the primary vehicle for underwriting and managing fixed and variable annuity business for ZFS's affiliated Farmers Group distribution channel. Bank One will provide investment management services for ZFS on some selected segments of their portfolios and will provide administrative functions for certain KILICO lines of business as well. Additionally, Bank One will be a new distribution source for the newly acquired companies, FKLA, ZLICA and ZLICONY.

For the insurers being sold to Bank One, the placement of the ratings under review with developing implications recognizes their impending new ownership and the need for A.M. Best to more extensively assess the future plans for the companies. The ratings could be upgraded if A.M. Best believes Bank One has developed clear, well thought out strategic and business development plans for these entities; if there is a strong likelihood of successful integration with Bank One's existing operations and culture; if implementation plans to drive improved operating performance from the acquired businesses appear feasible; and if the companies employ low-risk financial strategies and are well capitalized. Conversely, the ratings could be downgraded if A.M. Best perceives there are risks or challenges to Bank One's plans that could result in an inability to achieve these results. Additionally, should this transaction with Bank One not be completed, A.M. Best will evaluate the ratings of FKLA, ZLICA and ZLICONY on a stand-alone basis. In this event, it is unlikely the ratings would fall below A- (Excellent).

For KILICO, the under review with negative implications status reflects A.M. Best's view that, given the restructuring of ZFS's U.S. life insurance business, the company's new role in the group needs to be further analyzed and that A.M. Best believes its long-term role in the group may still be somewhat uncertain.

The placement of FLA's rating under review with negative implications reflects the fact that it currently is unclear what impact the restructuring of ZLUS will have on FLA's ongoing relationship with FKLA. However, A.M. Best does not expect that either KILICO's or FLA's rating would fall below A- (Excellent).

Over the coming weeks, A.M. Best will be discussing these issues with the various parties involved in this transaction to assess the likely impact on the insurers' future business profiles and operating and financial plans.

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.