A.M. Best Takes Various Rating Actions on Assurant, Inc.; Revises Outlook to Negative.

OLDWICK, N.J. -- A.M. Best Co. has taken various rating actions on the financial strength ratings (FSR) and issuer credit ratings (ICR) of Assurant, Inc. (Assurant) (New York, NY) [NYSE: AIZ] and its operating insurance subsidiaries. The outlook for the ratings has been revised to negative from stable. (See link below for a detailed list of the companies and rating actions.)

The assignment of a negative rating outlook to the group is in response to the recent announcement that five executives within Assurant, including its president and chief executive officer and chief financial officer have received "Wells notices" from the Division of Enforcement of the U.S. Securities and Exchange Commission (SEC). Although these Wells notices are not public, the company believes they were issued in connection with its ongoing investigation of certain loss mitigation insurance products, which expired in 2004. The Wells notices indicate that the SEC is considering recommending that civil enforcement actions be filed against the cited individuals for violating various provisions of the federal securities laws. All five employees have been placed on administrative leave. Interim replacements are to be announced on Wednesday, July 18, 2007 for the president and chief executive officer and chief financial officer.

A.M. Best believes that the SEC investigation will be a distraction to Assurant and could possibly affect Assurant's competitive position and have a negative impact on future revenue and earnings. Additionally, it is unclear what the ultimate outcome and impact on Assurant will be. A.M. Best will actively monitor this situation and may take additional rating actions if the circumstances dictate it.

The negative outlook also reflects noticeable declines in credit insurance premiums written through American Bankers Life Assurance Company of Florida (ABLAC) and Caribbean American Life Assurance Company (CALAC), the Assurant Solutions life segment, due to the acceptance of competing products to traditional credit insurance. This business has been principally written by ABLAC and CALAC. Both companies have contracted considerably in size because of the reduced demand for credit insurance products in their respective markets.

The ratings of Assurant continue to acknowledge its established presence in numerous niche markets, improved overall profitability and the maintenance of a more than adequate level of capitalization. Assurant's debt-to-capital position is approximately 20%, with strong debt service coverage. However, A.M. Best notes the organization's more active stock repurchase program and sizeable dividends continue to be taken out from a number of the insurance subsidiaries, primarily life/health insurers, which have accumulated excess capital.

The FSR has been upgraded to B++ (Good) from B (Fair) and an ICR of "bbb" has been assigned to Mayflower National Life Insurance Company (Mayflower National). The FSR has been removed from under review with positive implications, and both ratings have been assigned a negative outlook. Given the change in ownership, A.M. Best now views Mayflower National as "Secure." However, A.M. Best believes that only nominal new business activity is projected for the company going forward.

The downgrade of United Family Life Insurance Company's (Georgia) FSR to A- (Excellent) from A (Excellent) and the ICR to "a-" from "a" reflects the company's changed role within the organization and its run-off status.

The rating affirmations of Assurant's property/casualty operating entities (the group) reflect its established presence in various specialty markets, continued favorable operating performance and adequate risk-adjusted capitalization. These positive rating attributes are derived from the group's leadership position in the delivery of credit-related insurance products, creditor-placed hazard insurance, manufactured housing insurance, vehicle service contracts and retail extended service contracts and a vast customer base through its large number of distribution sources in North America and growing international presence. As a result of its diversified platform and specialty focus, the group has delivered solid operating earnings over the last couple of years (despite record natural catastrophes that impacted the industry in 2004 and 2005).

Somewhat offsetting these positive factors are the group's continued dependence on third-party reinsurance and significant growth in specialty property (both organically and through an acquisition), which in conjunction with an increase in net retention and costs associated with its property catastrophe (CAT) treaty in recent years, exposes the group's earnings to a greater degree of variability over the near term. This concern is somewhat offset by the book's geographic spread of risk, management's use of risk management tools including tracking aggregation of risks, rate increases and the increase in coverage in their property CAT treaty due to increased growth in the creditor placed property business.

For a complete list of Assurant Inc.'s FSRs, ICRs and debt ratings, please visit www.ambest.com/press/071702assurant.pdf.

Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.