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DUFF & PHELPS RATES FEDERAL HOME LIFE INSURANCE COMPANY, THE HARVEST LIFE INSURANCE COMPANY AND PHF LIFE INSURANCE COMPANY

 CHICAGO, June 14 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has reaffirmed claims paying ability ratings of `AA-' (Double-A-Minus) for Federal Home Life Insurance Company, The Harvest Life Insurance Company and PHF Life Insurance Company. PHF Life Insurance Company (PHF Life) and The Harvest Life Insurance Company (Harvest Life) are wholly owned subsidiaries of Federal Home Life Insurance Company (Federal Home Life). The ratings reflect: the good capital position of each of the companies, the companies' strong market position in rural/farm markets, the historically good profitability achieved by the companies, and the high quality investment portfolios of all three companies. These strengths more than offset the uncertainties associated with the recent change in ultimate parent relationships, the modest size of the organizations, and the extension of product lines in recent years.
 The three life insurance companies share a common senior management team and are managed as an integrated company sharing certain common systems and several mutual products. Harcourt Brace & Company is an intermediate parent to the three insurance companies, and was acquired by General Cinema Corporation in November 1991. General Cinema (renamed Harcourt General, Inc.), as ultimate parent, made a capital contribution of $20 million to the Harcourt Brace insurance companies in December 1991. This offset surplus strain from large annuity sales and the reduction of capital from dividends upstreamed to Harcourt Brace during previous years. No dividends were paid in 1992 and none are planned for 1993.
 Harcourt Brace formed The Harvest Life Insurance Company in 1972 as a means to capture the life and health insurance and annuity sales generated through captive agents representing its various farm publications. As a means to further expand its presence in the farm insurance market, in 1985 Harcourt Brace purchased Federal Home Life and PHF Life from the Home Insurance Company of New York. In addition, the acquisitions led Harcourt Brace into the credit life and disability and structured annuity markets. A general agency distribution system concentrating on life and annuity sales was included in the acquisition. Group insurance was exited in 1991.
 In recent years, management of Harcourt Brace's insurance operations has been successful in rationalizing its distribution systems and reducing expenses. Also, Harcourt Brace expanded the number of farm publications available to its captive agents through an exclusive, long-term license to market insurance products to subscribers of numerous farm publications of Capital Cities/ABC, Inc. This is leading to better market penetration in rural markets. Through Federal Home Life and PHF Life, Harcourt Brace continues to expand its presence in both the structured and single premium deferred annuity markets. However, management made a strategic decision to exit the underwriting of major medical business early this year. It entered into a letter of intent to reinsure the majority of this business as of April 1, 1993. Sales through the farm distribution channel will continue to emphasize life, annuity, and supplemental health products.
 Federal Home Life had total admitted assets of $1.6 billion at year end 1992 and adjusted surplus of $167 million. Combining Federal Home Life and its two subsidiaries, adjusted surplus was $178 million and admitted assets totaled $2.6 billion. Combined operating leverage was 13.8 times. Return on average adjusted surplus achieved by the combined entity was 15.4 percent during 1992. We consider the combined operating leverage to be appropriate for the product and business risks undertaken and the profitability to be good. Assets are of high quality. Below investment grade exposure was less than 2 percent of the bond portfolio at the end of 1992. The companies' mortgage and real estate investments were only about 1 percent of total invested assets.
 -0- 7/14/93
 /CONTACT: Kevin A. Ceurvorst, CFA of Duff & Phelps, 312-368-3144/


CO: Federal Home Life Insurance Company; Harvest Life Insurance
 Company; PHF Life Insurance Company ST: Michigan IN: INS SU: RTG


WB-MG -- NY052 -- 1434 07/14/93 12:51 EDT
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Date:Jul 14, 1993
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