Fitch Affirms IFS Ratings Of Mutual Of Omaha Companies at 'AA-'.

CHICAGO -- Fitch Ratings has affirmed the 'AA-' insurer financial strength (IFS) rating of Mutual of Omaha Insurance Company (Mutual) and its subsidiary, United of Omaha Life Insurance Company. At the same time, Fitch has assigned an 'A+' issuer default rating (IDR) to Mutual and an 'A' rating to Mutual's issuance of $300 million of 6.8% surplus notes due June 2036. The Rating Outlook is Stable.

Mutual's ratings are supported by the company's very strong risk adjusted capital position, strong brand name, diversified product profile and strong asset management capabilities. Partially offsetting these positives is the company's modest operating performance over the past several years.

As one measure of Mutual's strong capital position, the company reported an NAIC risk based capital ratio of 463% at Dec. 31, 2005. United of Omaha Life Insurance Company's capital position is also very strong at 515% of the company action level at year-end 2005. With its issuance of $300 million of 30-year surplus notes in June 2006, Mutual's capital position has strengthened further, although the company's leverage has increased and it will now be required to pay approximately $20 million in annual interest expense related to the surplus notes.

Over the past several years, Mutual's consolidate revenue growth and earnings have been relatively modest. For the year ended Dec. 31, 2005, Mutual's consolidated GAAP premium and annuity income from health and accident and life and annuity businesses increased approximately 4.6%, while the company's consolidated pretax consolidated income from continuing operations declined by 18%.

Founded in 1909, Omaha, Nebraska-based Mutual of Omaha is a leading provider of individual and group accident and health insurance products and services. The company and its subsidiaries offer a broad line of insurance protection and investment products to a large customer base encompassing corporate groups, individuals, and federal government employees. At Dec. 31, 2005, Mutual of Omaha reported consolidated GAAP total assets of $18.4 billion and total equity of $3.3 billion.

Fitch affirms the IFS ratings of following entities at 'AA-' with a Stable Outlook:

--Mutual of Omaha Insurance Company;

--United of Omaha Life Insurance Company.

Fitch assigns an 'A+' IDR to the following entity with a Stable Outlook:

--Mutual of Omaha Insurance Company.

Fitch assigns an 'A' rating to the following security with a Stable Outlook:

Mutual of Omaha Insurance Company

--$300,000,000 surplus notes due 2036.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site. The issuer did not participate in the rating process other than through the medium of its public disclosure.