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STANDARDS & POOR'S CORP. ASSIGNS KENTUCKY CENTRAL LIFE INSURANCE CO. A CLAIMS PAYING ABILITY RATING OF BB

 STANDARDS & POOR'S CORP. ASSIGNS KENTUCKY CENTRAL LIFE INSURANCE CO.
 A CLAIMS PAYING ABILITY RATING OF BB
 LEXINGTON, Ky., June 12 /PRNewswire/ -- Standard & Poor's Corp. has assigned Kentucky Central Life Insurance Company (NASDAQ-NMS: KENCA) a claims paying ability rating of BB.
 "We do not understand why S&P took this action," said W.E. Burnett, Jr., chairman of the board and president of Kentucky Central. "What makes this so implausible is that operations have been improving steadily. Statutory net income for the first quarter of 1992 was up 113 percent over the same quarter a year ago."
 He said the company continues to build on its solid financial position, for both the long and short terms.
 As of March 31, 1992, statutory capital, surplus and valuation reserves totaled $131.7 million, an increase of $40.2 million, or 44 percent, from the same date a year ago. The ratio of these funds to total consolidated assets ($1.3 billion) is 10 percent, which compares favorably with the industry average.
 Liquidity, a problem with some insurers, is a strong point at Kentucky Central, according to Burnett. Cash and equivalent funds total $62.8 million.
 "We have ample funds to meet all of our financial obligations," Burnett continued. "Every policyowner commitment is being honored promptly, just as we have been doing for the past 90 years."
 Burnett addressed specific points mentioned by S&P, starting with the mortgage loan and real estate portfolios. "We have provided S&P with extensive information which shows the situation is improving," Burnett continued. "We take exception to their interpretation of this information."
 He cited these facts:
 -- Aggressive measures continue to be taken in managing the mortgage loan and real estate portfolios.
 -- The size of the mortgage loan and real estate portfolios are being reduced, declining $21.8 million, or 4 percent, during the first three months of 1992.
 -- During the first quarter, Kentucky Central foreclosed on an office building in San Francisco, Calif. This transaction turned a problem mortgage loan into a viable real estate investment. Kentucky Central is managing the building, and the leasing of space is proceeding satisfactorily.
 -- Mortgage loans of $15.2 million were in foreclosure proceedings at the end of the first quarter.
 Burnett differs with S&P's opinion that the company's repurchase of its own stock is somehow harmful because it reduces surplus funds. "We have a company that is financially and operationally sound. It is a good investment, particularly when the market price of the stock is depressed."
 Burnett stated these facts about policies being surrendered for their cash value.
 -- Through February, the latest month for which figures are available, the percentage of policies renewing for the second year was holding steady at 87 percent, comparing favorably with the overall industry average.
 -- The number of Universal Life policies surrendered for cash declined from the fourth quarter of 1991 to the first quarter of 1992. Universal Life policies account for the bulk of business.
 -- The amount of cash paid out rose in the same period, due primarily to a few large policies being surrendered. Large policies, as defined by the size of the cash value accounts, make up only a small portion of Kentucky Central's business in force. 94 percent of all Universal Life policies in force have cash value account balances of less that $10,000.
 The company does not understand why S&P refers to its volume of new sales as "lackluster." New sales for 1991 totaled $10.7 billion, which exceeded the production of 98 percent of all life insurance companies in the nation. New sales may be termed "lackluster" only in comparison with Kentucky Central's excellent record in the past.
 In its life insurance operations, Kentucky Central continues to target new markets and generate new business. To enhance its competitive posture, the company is introducing a number of new products and services this year.
 The Lexington, Ky.-based company has 10,000 representatives operating in 49 states and the District of Columbia.
 -0- 6/12/92
 /CONTACT: Brent A. Clay, Vice President, Kentucky Central Life Insurance Company, 606-253-5271/
 (KENCA) CO: Kentucky Central Life Insurance Company ST: Kentucky IN: INS SU: RTG


JZ -- CH008 -- 9755 06/12/92 14:54 EDT
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Date:Jun 12, 1992
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