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DUFF & PHELPS RATINGS: GENERAL AMERICAN LIFE INSURANCE COMPANY; CLAIMS PAYING ABILITY REAFFIRMED AT 'AA'; PARAGON INSURANCE COMPANY

 CHICAGO, May 28 /PRNewswire/ -- Duff & Phelps Credit Rating Co. announced today that it has reaffirmed the "AA" (Double-A) claims paying ability of General American Life Insurance Company (General American). The rating reflects the company's high quality bond portfolio, strong competitive position in life reinsurance and regional presence in group life and health, sound and improved profitability supported by renewal profits from a large block of traditional life insurance, and the financial flexibility demonstrated by successful partial public stock sales of two subsidiaries.
 Weighed against these positives is the exposure to troubled commercial mortgage loans, the historical use of less conservative surplus enhancement transactions to fund growth, and need to hold expense levels while building sales momentum in individual life.
 Duff & Phelps reaffirms the "AA" (Double-A) rating of General American's wholly owned subsidiary Paragon Life Insurance Company (Paragon). The subsidiary's claims paying ability rating is based on General American's guarantee of all of Paragon's contractual obligations.
 General American is a St. Louis-based mutual life insurance company founded in 1933 with $7.1 billion of admitted assets and adjusted surplus of $482 million at Dec. 31, 1992. General American focuses its business strategy around four main businesses; individual life and annuities, group life and health, group pensions, and life reinsurance. Wholly owned subsidiary Paragon, was established in 1985 to market non-participating group payroll deduction products to Fortune 1000 companies.
 General American has posted strong operating gains over the last three years after sluggish results in 1988 and 1989. Net operating gain increased 20 percent to $46 million as a result of strong earnings in individual life and reinsurance. Return on admitted assets fell to 2.63 percent in 1992 from 3.05 percent the previous year and return on adjusted surplus fell to 10.8 percent from 11.5 percent because of the substantial surplus increase. General American's adjusted surplus increased 29 percent in 1992 to 6.8 percent of total assets.
 -0- 5/28/93
 /CONTACT: Martha A. Butler, CFA of Duff & Phelps Credit Rating Co., 312-368-3191/


CO: General American Life Insurance Company ST: Missouri IN: INS SU: RTG

TS -- NY021 -- 3339 05/28/93 10:40 EDT
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Publication:PR Newswire
Date:May 28, 1993
Words:357
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