Conseco's Wendt Responds to Moody's Downgrade.

Business Editors

INDIANAPOLIS--(BUSINESS WIRE)--May 28, 2002

The following is a statement from Conseco Chairman and CEO Gary Wendt on today's ratings action by Moody's on Conseco (NYSE:CNC).

"We take strong issue with the timing of and the language used to support today's ratings action by Moody's.

The basis cited for today's action was information that is between four and six weeks old. And, to the extent the action is based on reported first quarter earnings, it is based on information that is now two months old.

Let me quickly set the record straight with respect to the two issues raised by Moody's as the basis for their action.

First, Moody's states that our cash raising is "slower than anticipated." As we have made clear for the past several months, the need to raise cash quickly was alleviated by the amendments that we negotiated with our banks. That new bank agreement gave us much greater flexibility than we anticipated at the beginning of this year.

As we have said before, the bank agreement and the reduced urgency for cash raising is highly beneficial to the company. We could have amassed a larger amount of cash by today, but we might have paid dearly for the haste. We do not need to rush, and we have no intention of minimizing value for our shareholders in order to meet artificial deadlines imposed by observers with no stake in the outcome of the turnaround.

Our cash raising results are virtually unchanged since reported 4 weeks ago. All deals are on schedule. In fact, one has improved, and a new opportunity is also being discussed. As other analysts have reported, we believe 2002 is well in hand and we are hard at work on 2003 and the permanent capital structure of the company. Thus, we are not spending our days worrying about whether or not we will remain a going concern.

Second, Moody's states that our operating performance is "continued weak." To issue such a statement a month after an earnings release and two months after the end of the reporting period implies knowledge of interim performance that Moody's does not have.

As our previously stated earnings guidance indicates, we expect operating performance to improve throughout the year. It is true that the hint of improvement in the economy will need to bear fruit in order to meet those objectives, but we are increasingly optimistic about that prospect.

Finally, while the Moody's statement goes to some length to report the results of our bond exchange (which we released on April 18), it fails to overtly say that the new bonds issued in that exchange were not downgraded.

In sum, neither of the bases for the ratings downgrade are causes for concern. We continue to execute actions to improve the long-term operations of the company. And we continue to work through the reduction of debt and the creation of a long-term capital structure that have been, and remain, the focus of this turnaround.

We regret having to take public issue with Moody's. But, the progress of this turnaround merits a balanced perspective."

Note on forward-looking statements: All statements, trend analyses and other information contained in this report and elsewhere (such as in filings by Conseco with the Securities and Exchange Commission, press releases, presentations by Conseco or its management or oral statements) relative to markets for Conseco's products and trends in Conseco's operations or financial results, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "project," "intend," "may," "will," "would," "contemplate," "possible," "attempts," "seeks," "should," "could," "goal," "target," "on track," "comfortable with," "optimistic" and other similar expressions, constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by the forward-looking statements. Assumptions and other important factors that could cause our actual results to differ materially from those anticipated in our forward-looking statements include, among other things: (i) general economic conditions and other factors, including prevailing interest rate levels, stock and credit market performance and health care inflation, which may affect (among other things) Conseco's ability to sell its products, its ability to make loans and access capital resources and the costs associated therewith, the market value of Conseco's investments, the lapse rate and profitability of policies, and the level of defaults and prepayments of loans made by Conseco; (ii) Conseco's ability to achieve anticipated synergies and levels of operational efficiencies, including from our process excellence initiatives; (iii) customer response to new products, distribution channels and marketing initiatives; (iv) mortality, morbidity, usage of health care services and other factors which may affect the profitability of Conseco's insurance products; (v) performance of our investments; (vi) changes in the Federal income tax laws and regulations which may affect the relative tax advantages of some of Conseco's products; (vii) increasing competition in the sale of insurance and annuities and in the finance business; (viii) regulatory changes or actions, including those relating to regulation of financial services affecting (among other things) bank sales and underwriting of insurance products, regulation of the sale, underwriting and pricing of products, and health care regulation affecting health insurance products; (ix) the outcome of Conseco's efforts to sell assets and reduce, refinance or modify indebtedness and the availability and cost of capital in connection with this process; (x) actions by rating agencies and the effects of past or future actions by these agencies on Conseco's business; (xi) the ultimate outcome of lawsuits filed against Conseco; and (xii) the risk factors or uncertainties listed from time to time in Conseco's filings with the Securities and Exchange Commission. Other factors and assumptions not identified above are also relevant to the forward-looking statements, and if they prove incorrect, could also cause actual results to differ materially from those projected.

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