S&P Takes Various Actions on Transamerica Life Group.

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

July 22, 1999--Standard & Poor's today revised its ratings on Transamerica Occidental Life Insurance Co. (TOLIC), Transamerica Life Insurance & Annuity Co. (TLIAC), and Transamerica Life Insurance Co. of New York (TLICNY), collectively referred to as the Transamerica Life Group (TLG), and their parent company, Transamerica Corp.(see list below).

At the same time, most of these ratings were removed from CreditWatch where they had been placed with positive implications. The outlook is negative. These ratings changes are due to the completion of the acquisition of Transamerica Corp. by AEGON N.V. The ratings of Transamerica's noninsurance entities are unaffected by these actions.

Standard & Poor's believes that TLG has a strong diversified business, with excellent market positions in individual life insurance, individual annuities, reinsurance, and asset management. It also has very strong operating performance with a Standard & Poor's earnings adequacy ratio of 206% excluding investment gains. The group's investments are of excellent quality, although subject to moderate interest rate risk.

At the same time, TLG's capitalization is very strong although somewhat below that of similarly rated insurers on both a consolidated and individual company basis. TLICNY is considered to be strategically important to its new group notwithstanding the fact that this group already has another New York operating company. TLICNY's rating is based on explicit support from its immediate parent, together with an expectation for the infusion of additional capital into this entity in the near future.

With its acquisition by AEGON N.V., TLG will henceforth be operated as a strategically important part of the AEGON USA Group of companies. The AEGON USA Group is distinguished by an exceptionally broad array of life insurance products and services. This includes its being one of the largest sellers of fixed and variable annuities through financial institutions with total sales of fixed and variable annuities exceeding $4 billion in 1998. Additionally, it has in excess of $25 billion of institutional funds under management through its Diversified Financial Products group and is a major supplier of full-service pension facilities to midsize plans through Diversified Investment Advisors. Augmenting these businesses, it is also the second-largest home service insurer nationwide.

The ratings of AEGON USA Group also reflect its core position with its ultimate parent, AEGON N.V., a large global insurer. Based in the Netherlands, AEGON N.V. is one of the world's largest listed insurers. Market capitalization was approximately $70 billion at year-end 1998, ranking it among the world's top-10 insurance groups. Its focus is on life insurance and investment products. The group has developed outside its Dutch market by making several astute acquisitions in the U.S. and the U.K.

OUTLOOK: NEGATIVE

The negative outlook on the credit ratings of AEGON N.V., including the Transamerica units mentioned above, reflects Standard & Poor's belief that the group's general tolerance for risk has increased somewhat in recent years, and the specific challenges associated with managing the noninsurance lines of Transamerica in which AEGON's management lacks expertise. -- CreditWire -0-

     RATINGS REVISED AND REMOVED FROM CREDITWATCH
                          TO                FROM
Transamerica Corp.
 Counterparty credit rtg  AA/Negative/A-1+  A/Watch Pos/A-1
 Commercial paper         A-1+              A-1
 Senior unsecured         AA                A/Watch Pos
 Preferred Stock          A+                BBB+/Watch Pos

Transamerica Occidental Life Insurance Co.
Transamerica Life Insurance & Annuity Co.
 Counterparty credit rtg  AAA/Negative/A-1+ AA/Watch Pos/A-1+
 Financial strength rtg   AAA               AA/Watch Pos

Transamerica Life Insurance Co. of NY
 Financial strength rtg   AAA               AA/Watch Pos

Credit Profile
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