Correct: Fitch Rates Americo Life's Sub Debt 'BB'.

Business Editors

(This is an amended version of a press release dated July 2, 2002, that modifies the Rating Outlook for Americo in the first paragraph.)

Fitch Ratings assigned a 'BB+' Long-Term issuer rating to Americo Life, Inc. (Americo Life) and a 'BB' subordinated debt rating to Americo Life's $100 million 9.25% Senior subordinated notes, due 2005. The Rating Outlook is Stable.

In addition to the high credit quality and liquidity of Americo Life's fixed income portfolio, the rating considers the relatively high financial leverage at the holding company and the insurance companies and the low level of consolidated capital at the insurance companies.

Through its insurance subsidiaries, Americo Life offers individual life insurance and individual annuities to select markets. The products are distributed through independent marketing organizations (IMOs) to the company's target markets of individuals, public school teachers and administrators, and seniors.

Historically, Americo Life's strategy was to acquire blocks of insurance policies in order to develop sufficient scale. Once the necessary scale was achieved, management shifted its focus to growth through new policy sales. Beginning in 2001, Americo Life focused all of its marketing efforts on Americo Financial Life and Annuity Insurance Company (Americo Financial), which was formerly known as The College Life Insurance Company. Fitch believes that the company will be challenged with this growth strategy because this market is a crowded one. Americo Life's success is dependent upon successfully managing its relationships with the IMOs.

GAAP revenue for Americo Life decreased by 13% during the first quarter of 2002 to approximately $112 million. This was due in large part to an increase in investment income earned during the period, mostly from improvement in the performance of the derivatives portfolio.

Historical earnings have been somewhat modest with return on common equity, net of FAS 115 adjustments, averaging 6.9% over the 1997 to 2001 period. In 2001, the company reported net income after taxes of $12 million, compared to net income of $15 million in 2000. The decrease was due in large part to an increase in death benefits and a decrease in surrender charge income coupled with a restructuring charge incurred from closing its Austin, Texas offices in 2001. Net income for the first quarter of 2002 was $4.6 million, up from $2.7 million reported for the first quarter of the previous year.

Americo Life reported total assets of $4.6 billion and shareholders' equity of $225.5 million at the end of the first quarter of 2002. The company's total invested assets were allocated mainly to fixed income securities, which represented 77% of the total. Investments in mortgages and real estate accounted for 11%, policy loans 7%, equities 3%, and cash and short-term investments 2%. Corporate securities represented the vast majority of bond investments at 70%, with structured securities accounting for the bulk of the remaining amount. The bond portfolio had strong liquidity with 93% of bonds invested in publicly traded securities and only 4% of bonds were rated below investment grade.

Americo Life carries approximately $28 million of unaffiliated assets at the holding company. This compares to total debt obligations of $100 million, $8 million of which are owned by life insurance subsidiaries. The holding company assets are primarily equity investments. Fitch believes that maintaining assets at the holding company is prudent given the restrictive dividend limitations for insurance companies.

Americo Life's financial leverage is somewhat high, with debt representing 29% of total capital at the end of the first quarter of 2002. Fixed charge coverage was acceptable at 3.9 times (x) at the end of first quarter of 2002 and 2.9x at the end of 2001. Factoring out restructuring charges incurred in 2001 would have resulted in the fixed charge coverage equaling 3.9x for the year.

For the current rating levels, Fitch expects that Americo Life's leverage will not exceed 30% debt to total capital. Additionally, the composition of the investment portfolio should remain basically unchanged; and an increase in GAAP profitability should result in the return on equity reaching into the high single digits in 2002. Fitch would view favorably the successful management of IMO relationships that resulted in first year life and annuity premium sales growth approximating that of the industry.