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TEACHERS INSURANCE AND ANNUITY ASSOCIATION CLAIMS PAYING ABILITY RATED 'AAA'

 CHICAGO, Feb. 8 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has rated the claims paying ability of Teachers Insurance And Annuity Association (TIAA) AAA' (Triple-A). The rating is based on the company's excellent financial performance, large size, dominant market share in its core business, positive liability characteristics, low operating leverage, and low cost structure.
 TIAA, the third largest life insurance company in the nation, is based in New York City with total admitted assets of $60 billion and adjusted surplus of $4.0 billion at Sept. 30, 1992. TIAA and its companion organization, College Retirement Equities Fund (CREF), represent the largest private pension retirement system in the world. CREF had $49 billion in total assets at quarter-end. All of the common stock of TIAA is held by an independent non-profit Board of Overseers. Therefore, TIAA functions much like a mutual company by passing operating results through to the policyholders via dividends. Operating leverage was 13.90 times at Sept. 30, 1992. This ratio is stronger than industry peers with a similar business mix.
 TIAA provides retirement annuities and insurance for individual policyholders at colleges, universities, non-profit research institutions, and private secondary schools. The company holds the dominant market share in the higher education sector.
 TIAA does not use a commissioned field force to distribute its products. The company has eleven branch offices and 70 institutional counselors who work with campus administrators. Sales are made on a direct group basis, however policies are owned by the individual, vested immediately, and portable to another participating institution. Over 90 percent of TIAA's liabilities cannot be withdrawn upon request. In 1991, the company introduced a transferability feature on all new and existing contracts. However, funds can only be withdrawn as an annuity over a ten year period.
 Bonds represented 53 percent of total invested assets at Sept. 30, 1992. Below investment grade securities comprised 1 percent of the bond portfolio. However, most of these bonds were private placement issues in the BB' category. Private placements generally have lower default risk than public issues because the lender negotiates terms, such as rate and covenant protection, directly with the issuer. Mortgage loans represented 35 percent of total invested assets at quarter-end. The company uses a dedicated field force to originate and monitor real estate investments.
 Surplus exposure to troubled real estate was 64 percent at Sept. 30, 1992. The company also has 11 percent of invested assets in equity real estate and other real estate investments. The nature of TIAA's liabilities eliminates liquidity risk and allows the company to take a long term investment perspective.
 -0- 2/8/93
 /CONTACT: Julie A. Burke, CPA of Duff & Phelps, 312-368-3158/


CO: Teachers Insurance and Annuity Association ST: IN: FIN SU: RTG

SH -- NY057 -- 4040 02/08/93 11:08 EST
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Date:Feb 8, 1993
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