Fitch Affirms IFS Rating of Mutual of America at 'AA-', Outlook Stable.

CHICAGO -- Today Fitch has affirmed the 'AA-' insurer financial strength rating of Mutual of America Life Insurance Company (Mutual of America). The Rating Outlook is Stable.

The rating reflects Mutual of America's strong market position in the small-to-medium case size, not-for-profit pension and annuity market, its low-cost distribution system, good asset quality, strong capital position and well-regarded service capabilities. Offsetting these strengths somewhat is the company's record of modest profitability and the increasing competitive environment in all areas of the retirement savings business.

Fitch considers Mutual of America's profitability as modest, with after-tax return on admitted assets and return on total adjusted capital averaging 0.56% and 8.2%, respectively, over the past five years. When excluding amortization of the interest maintenance reserve (IMR) into income, these averages fall to 0.39% and 5.7%.

Mutual of America's investment portfolio is heavily skewed toward fixed-income investments, with an emphasis on investment-grade, publicly traded securities. The company allocates a higher percentage than industry average to equity investments and mortgage-backed securities which is offset by significantly lower than industry average exposure to commercial mortgage loans. Investment policy parameters limit the combined total of high-yield bonds, REITs and other unaffiliated common stocks to 15% of general account assets. At Dec. 31, 2003, Mutual of America's exposure to these asset classes was 9.8%.

Mutual of America's NAIC risk-based capital ratio was a strong 381% at Dec. 31, 2003, up from 317% at the year-end 2002. The main driver was the significant increase in total adjusted capital from improvements in the equity markets. The company's capital levels are more volatile than peers because of its allocation to equities.

Mutual of America is a mutual life insurance company based in New York City with total admitted assets of $11.0 billion and total adjusted capital of $696 million at Dec. 31, 2003. Mutual of America's major product lines targeted at not-for-profit organizations and 'for profit' corporate pension plans are primarily voluntary savings vehicles (including TDAs, thrift plan annuities, and IRA annuities) and traditional pension business (including defined benefit and defined contribution annuity, including 401(k), plans).

Entity/Issue/Type Action Rating/Outlook

Mutual of America Life Insurance Company

-- Insurer financial strength Affirmed 'AA-'/Stable.