S&P Affirms Golden Rule Insurance Co. 'A+' Ratings.

Business Editors

NEW YORK--(BUSINESS WIRE)--Standard & Poor's

Feb. 11, 2002-- Standard & Poor's today affirmed it's single-'A'-plus counterparty credit and financial strength ratings on Golden Rule Insurance Co. (GRI).

The outlook is stable.

The affirmation is based on the company's well-developed, innovative market niche and product design strategy, very strong capitalization, very strong earnings performance, very strong liquidity, and conservative investment profile. Offsetting these positive factors are continuing structural uncertainties in the individual health insurance market.

Major Rating Factors:

-- Strong business profile. GRI has a strong position in the health insurance
market. As of Sept. 30, 2001, total health premiums were up 19% compared with
the same period in the previous year. The company's financial services division
also continues to grow through increased sales of its unique asset-based
long-term care products. Competitive advantages include its consistent focus on
its core businesses (health insurance and financial services), excellent
underwriting skills, solid financial profile, and good product innovation
capabilities. In addition, GRI has a well-developed network of health care
providers, enabling it to serve a niche market, and a wide distribution system
that includes joint ventures with other companies' distribution forces.

-- Conservative capitalization. GRI's capital adequacy ratio is projected at
about 188% for year-end 2001 from 229% at year-end 2000. GRI, a wholly owned
subsidiary of Golden Rule Financial Corp. (GRFC), established an employee stock
ownership plan (ESOP) in the first quarter of 2001. The ESOP purchased 30% of
GRFC's stock with cash on hand and borrowed funds from GRFC in conjunction with
a GRFC stock redemption. GRFC secured bank financing resulting in a
debt-to-capital ratio of 25% following the ESOP transaction, though that ratio
was down to 16% by Sept. 30, 2001. The capital adequacy ratio is expected to
remain at or above 180%, with excess capital paid to GRFC as dividends.

-- Very strong operating performance. GRI's operating performance is considered
very strong, with an earnings adequacy ratio of 242% in 2000, up from 206% in
the prior year. Several factors contributing to the company's strong earnings
include prudent underwriting practices, managed care savings, reduced marketing
expenses as a percentage of first year premium, and strict expense controls.

-- Very strong liquidity. Liquidity was very strong at 246% at year-end 2000,
compared with 236% in the prior year. Liquidity and financial flexibility are
also enhanced by additional resources available from GRI's parent, GRFC.

-- Volatile market conditions. Standard & Poor's expects GRI, along with other
health insurance carriers, to continue to encounter significant challenges from
industry consolidation, competition, and regulation of the health insurance and
managed care industry. By the nature of its significant presence in individual
health insurance, GRI remains exposed to both legislative and competitive
pressures.

Golden Rule Insurance Co. is a Security Circle insurer, which means that it voluntarily underwent Standard & Poor's most comprehensive analysis and was assigned ratings in one of the top four categories for financial security.

OUTLOOK: STABLE

Standard & Poor's expects GRI will experience premium growth in 2002 compared with the prior year and then level off to 5%-10% in future years. Pretax operating income is expected to be about $45 million-$50 million in 2002, with an ROR of about 5%. GRI's capital adequacy ratio is expected to be at or above 180% for 2002.