Fitch Boosts Transparency of its Global Reinsurance Sector Ratings.

CHICAGO -- Fitch Ratings said today that it is implementing new ratings standards for the Global Reinsurance Sector that will add greater transparency to the agency's ratings. Fitch's new methodology released in a special report entitled 'Insurance Industry: Global Notching Methodology,' delineates the impact of default risk, and recovery given default, on ratings.

The implementation of the new ratings standards is being done concurrently for most insurance sectors globally, and follows the publication of an exposure draft of the noted methodology report on Dec. 14, 2005 and a market feedback period. A summary of the major areas of feedback, and Fitch's responses, can be found in the report 'Responses to Feedback on Insurance Industry Notching Methodology' also published today and available on the Fitch Ratings web site at 'www.fitchratings.com'.

The new ratings methodology is designed to add greater transparency to Fitch's insurance industry ratings. This is accomplished by more clearly assessing the effect of default risk and recovery given default on ratings. Specifically, the new ratings standards clearly distinguish how default and recovery risk are influenced by various insurance regulatory standards around the world, and varying treatments with respect to policyholder preference and payment restrictions between an operating company and holding company.

As part of the new methodology Fitch is assigning a new Issuer Default Rating (IDR) to essentially all debt issuing entities rated by Fitch. The IDR is a pure measure of default risk at the entity level. Fitch believes that the distinction between the IDR and unsecured senior debt rating provides significant value added information for investors not previously available. A list of newly assigned IDRs for the Global Reinsurance Sector appears near the bottom of this release.

The relationship between reinsurers' IDRs and existing senior unsecured debt ratings is primarily dependent on characteristics of the regulatory jurisdictions and environments in which the debt issuing holding companies and subsidiary reinsurance companies operate.

In most jurisdictions in which the major reinsurers are domiciled, there is no priority afforded reinsurance obligations ahead of senior unsecured creditors and thus Fitch expects average recovery rates on reinsurance policyholder obligations. In contrast, since primary policyholders typically have priority over senior unsecured creditors the agency expects above average recovery rates on primary policyholder obligations. In addition, many of the offshore domiciles in which reinsurers are located have less restrictive regulatory regimes, implying less differentiated default risk between an operating and holding company. As a result of these two features, implementing the new methodology has led to a general tightening of the notching between Insurer Financial Strength (IFS) ratings and debt ratings.

Additionally, where an insurance group is made up of both primary and reinsurance companies, the new methodology has in some cases resulted in a downward revision of IFS ratings for the reinsurance subsidiaries to a level below that of the related primary companies reflecting the lower recovery expectations in default for reinsurance policyholders relative to primary policyholders.

Greater details on Fitch's new guidelines governing notching of issue ratings relative to the IDR, as well as the notching between IFS at an operating company level and debt ratings at a holding company level are available in the noted methodology report.

All rating changes being made today in implementing the new ratings guidelines are being designated as "revisions", as opposed to upgrades or downgrades. This is being done to make clear that the rating change is driven by a methodology change, as opposed to a change in Fitch's views on the fundamental credit profile of the entity or its rated issues.

The following ratings experienced upward revisions upon implementation of the new guidelines:

*Converium Finance SA

-- 8.25% US$200 million guaranteed subordinated notes due 2032 revised to 'BB+' from 'BB'.

Everest Reinsurance Holdings, Inc.

-- 8.75% US$199 million senior notes due 2010 revised to 'A' from 'A-';

-- 5.40% US$250 million senior notes due 2014 revised to 'A' from 'A-'.

Everest Re Capital Trust I

-- 7.85% US$8 million trust preferred securities due 2032 revised to 'A-' from 'BBB+'.

Everest Re Capital Trust II

-- 6.20% US$280 million trust preferred securities due 2034 revised to 'A-' from 'BBB+'.

*GE Insurance Solutions Corporation

-- 7.00% US$600 million senior notes due 2026 revised to 'A' from 'A-';

-- 6.45% US$400 million senior notes due 2019 revised to 'A' from 'A-';

-- 7.50% US$350 million senior notes due 2010 revised to 'A' from 'A-';

-- 7.75% US$350 million senior notes due 2030 revised to 'A' from 'A-'.

*Hannover Finance (Luxembourg) SA

-- 5.00% EUR500 million guaranteed perpetual subordinated notes revised to 'A' from 'A-';

-- 5.75% EUR750 million guaranteed subordinated notes due 2024 revised to 'A' from 'A-'.

Montpelier Re Holdings, Ltd.

-- 6.125% US$250 million senior notes due 2013 revised to 'BB+' from 'BB'.

Munich Re Finance BV

-- 6.75% EUR3000 million guaranteed subordinated notes due 2023 revised to 'A+' from 'A';

-- 7.625% GBP300 million guaranteed subordinated notes due 2028 revised to 'A+' from 'A'.

*Odyssey Re Holdings Corp.

-- 8.125% US$50 million Series A perpetual preferred shares revised to 'BB' from 'BB-';

-- Floating-rate US$50 million Series B perpetual preferred shares revised to 'BB' from 'BB-'.

*Reinsurance Group of America, Inc.

-- 7.25% US$100 million senior notes due 2006 revised to 'A' from 'A-';

-- 6.75% US$200 million senior notes due 2011 revised to 'A' from 'A-';

-- 6.75% US$400 million junior subordinated debentures due 2065 revised to 'A-' from 'BBB+'.

*RGA Capital Trust I

-- 5.75% US$158 million convertible trust preferred securities (PIERs) revised to 'A-' from 'BBB+'.

SCOR SA

-- EUR2,500 million commercial paper programme revised to 'F2' from 'F3';

-- EUR153 million BMTN programme revised to 'BBB+' from 'BBB';

-- 5.25% senior notes due 2007 revised to 'BBB+' from 'BBB';

-- 4.125% senior notes due 2010 revised to 'BBB+' from 'BBB'.

Scottish Re Group Limited

-- 4.50% US$115 million senior convertible notes revised to 'BBB+' from 'BBB';

-- 5.875% US$142 million hybrid capital units revised to 'BBB' from 'BBB-';

-- 7.25% US$125 million non-cumulative perpetual preferred shares revised to 'BBB' from 'BB+'.

The following ratings experienced downward revisions upon implementation of the new guidelines:

Ace American Reinsurance Company

-- Insurer financial strength revised to 'CCC+' from 'B-'.

Berkley Insurance Company

-- Insurer financial strength revised to 'A' from 'A+'.

Century Reinsurance Company

-- Insurer financial strength revised to 'CCC+' from 'B-'.

The following IDRs were assigned upon the new methodology's implementation:

Arch Capital Group, Ltd.

-- 'BBB+';

-- Rating Outlook Positive.

Berkshire Hathaway, Inc.

-- 'AAA';

-- Rating Outlook Negative.

*Converium AG

-- 'BBB-';

-- Rating Watch Negative.

*Converium Holding AG

-- 'BB';

-- Rating Watch Negative.

Everest Reinsurance Holdings, Inc.

-- 'A+';

-- Rating Outlook Stable.

*GE Insurance Solutions Corp.

-- 'A+';

-- Rating Watch Positive.

General Re Corp.

-- 'AAA';

-- Rating Outlook Negative.

*Hannover Rueckversicherung AG

-- 'A+';

-- Rating Outlook Stable.

Max Re Capital, Ltd.

-- 'A-';

-- Rating Outlook Stable.

Montpelier Re Holdings, Ltd.

-- 'BBB-';

-- Rating Watch Negative.

Munich Reinsurance Company

-- 'AA-';

-- Rating Outlook Stable.

*Odyssey Re Holding Corp.

-- 'BBB-';

-- Rating Outlook Stable.

PartnerRe Ltd.

-- 'AA-';

-- Rating Outlook Stable.

PXRe Group, Ltd.

-- 'BB';

-- Rating Watch Negative.

*Reinsurance Group of America, Inc.

-- 'A+';

-- Rating Outlook Stable.

RenaissanceRe Holdings, Ltd.

-- 'A-';

-- Rating Outlook Negative.

Scottish Re Group Ltd.

-- 'A-';

-- Rating Outlook Stable.

SCOR SA

-- 'BBB+';

-- Rating Outlook Stable.

*Swiss Reinsurance Company

-- 'AA+';

-- Rating Watch Negative.

*W.R. Berkley Corp.

-- 'BBB+';

-- Rating Outlook Stable.

Finally, all long-term issuer and short-term issuer ratings previously assigned in the Global Reinsurance Sector are withdrawn.

The new methodology has not been implemented yet for Folksamerica Reinsurance Company pending an updated analysis to help determine the applicable ratings under the new "group IDR" methodology. Fitch expects to have the new methodology in place for this company by April 30, 2006.

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. Issuers denoted with a (*) did not participate in the rating process other than through the medium of their public disclosure.