A.M. Best Takes Various Rating Actions on Subsidiaries of GE Insurance Solutions; Assigns Stable Outlook.

OLDWICK, N.J. -- A.M. Best Co. has affirmed various financial strength ratings of the property/casualty subsidiaries of GE Insurance Solutions Corp (GE Insurance Solutions), including the financial strength ratings of A (Excellent) of Employers Reinsurance Corporation (ERC) and GE Reinsurance Corporation (GE Re) (Barrington, IL), together known as Employers Re Corp Group. A.M. Best has also affirmed the issuer credit ratings of "a" of ERC and GE Re. (See link below for a list of ratings.) Concurrently, A.M. Best has downgraded the issuer credit and senior debt ratings of GE Insurance Solutions to "bbb" from "bbb+". All ratings have been removed from under review with negative implications and assigned a stable outlook.

These rating actions follow management's implementation of various steps taken to restore and maintain ERC's and GE Re's risk-adjusted capitalization at prudent levels relative to their ratings and risk profile. The need for such actions was precipitated by General Electric Company's (GE) (NYSE:GE) previously announced after-tax charge taken by GE Insurance Solutions of $472 million in the fourth quarter of 2004 stemming from adverse reserve development, aggregating $750 million after-tax for the full year 2004. Accordingly, management of GE Insurance Solutions provided A.M. Best with a capital restoration plan at that time, which included explicit support from General Electric Capital Corporation (GECC). Major components of that plan include a recently concluded increase in cash capital of $350 million from GE Capital Services; a commitment from GE Insurance Solutions to provide additional tangible capital by the end of the third quarter of 2005; the exchange of $1.2 billion of ERC preferred stock for new ERC common stock, thereby improving financial flexibility and the quality of capital; and other potential activities designed to further improve its surplus position, risk-adjusted capitalization and business profile.

The stable outlook has been assigned due to the explicit support in the form of strongly worded capital maintenance agreements for ERC and GE Re provided by GECC, which ensure that risk-adjusted capitalization of these two companies will be maintained on a continuing basis at a superior level. Accordingly, the property/casualty subsidiaries and affiliates, which utilize ERC as a reinsurer or shared business platform, will also benefit from the capital maintenance agreements.

The downgrading of the debt and issuer credit ratings of GE Insurance Solutions reflects the lack of explicit support from GE to GE Insurance Solutions' creditors despite, its more conservative financial leverage position.

For a list of GE Insurance Solutions Corp's subsidiaries' financial strength, debt and issuer credit ratings, please visit http://www.ambest.com/press/033102geinsurancesolutions.pdf.

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings.

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 http://www.ambest.com.