Fitch stated that Nationwide Life s risk-adjusted capitalization is considered strong relative to its peers.

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1 Rating Action: Nationwide (Affirmed) On August 25, Fitch Ratings affirmed the A (Strong) insurer financial strength ratings of Nationwide Life Insurance Co. (Nationwide Life). The rating outlook is stable. The affirmation was part of a broader rating affirmation for Nationwide Life s parent property-casualty company, Nationwide Mutual Insurance Co. Fitch stated that Nationwide Life s risk-adjusted capitalization is considered strong relative to its peers. Rating Action: New York Life (Affirmed) On August 23, Fitch Ratings affirmed the AAA (Exceptionally Strong) insurer financial strength ratings of New York Life Insurance Co. (New York Life) and its subsidiaries. The rating outlook is stable. According to Fitch, the ratings are based on the company s very strong capital, solid operating earnings, and its well-diversified, liquid investment portfolio. Fitch also cited favorably New York Life s leading position in the U.S. life insurance and annuity markets. Fitch s primary investment concerns are related to the company s exposure to residential and commercial real estate related investments. However, gross credit related losses declined to $229 million in 2010 from $589 million in Fitch said its stable outlook is driven by the company s very strong capital base and the expectation of continued sustainable operating performance in Rating Action: Northwestern Mutual (Affirmed) On August 23, Fitch Ratings affirmed the AAA (Exceptionally Strong) insurer financial strength rating of Northwestern Mutual Life Insurance Co. (Northwestern Mutual). The rating outlook is stable. According to Fitch, the rating reflects Northwestern Mutual s strong competitive position in the U.S. individual life insurance market, strong balance sheet fundamentals, and stable earnings profile. Fitch says Northwestern Mutual exhibits a very strong risk-based capital position, modest financial leverage, excellent liquidity, and stable earnings. Fitch said that while Northwestern Mutual s investment risk is manageable relative to the company s liabilities, the company does have above-average exposure to commercial mortgages and equities, which is a concern to Fitch due to possible volatility from capital gains and losses over shorter-term time horizons. Rating Action: Guardian (Affirmed) On August 23, Fitch Ratings affirmed the AA+ (Very Strong) insurer financial strength ratings of Guardian Life Insurance Co. of America (Guardian). The rating outlook is stable. Page 1 of 6

2 According to Fitch, Guardian s ratings reflect their strong balance sheet fundamentals, below-average investment risk, stable operating results, and a favorable operating profile. Guardian has limited financial leverage and dependence on reserve financing arrangements. Additionally, the company has limited exposure to equity market volatility and disintermediation risk. Fitch notes that the company s ability to adjust policyholder dividends every year provides significant financial flexibility, which facilitates consistent and stable operating earnings. Rating Action: Genworth (Affirmed, Rating Watch Removed) On August 23, Fitch Ratings affirmed the A- (Strong) insurer financial strength ratings of the life insurance subsidiaries of Genworth Financial, Inc. (Genworth) and removed the ratings from Rating Watch Negative. The rating outlook is negative. The rating action concluded a review by Fitch that was initiated on July 21, 2011, when Genworth announced that it expected to report an estimated net loss of $92 million to $112 million in the second quarter of 2011 due to reserve strengthening of approximately $300 million in its U.S. mortgage business. According to Fitch, the removal of the Rating Watch was attributed to improvement in the holding company s liquidity position and improvement in areas of concern from prior reviews. Fitch stated that investment losses at Genworth s life insurance companies have diminished to expected levels within the current rating. In addition, Genworth has successfully funded long-term life insurance reserves while introducing new UL products with lower reserve requirements to replace term life. Genworth is also in the process of raising prices on some older blocks of long term care (LTC) business to improve profitability. Offsetting these positives, according to Fitch, is a belief that Genworth s financial flexibility is limited by its stock's low price-to-book ratio and the relatively wide spreads on its debt. In addition, statutory earnings at the Genworth Life companies continue to be dragged down by the performance of the older life and LTC insurance blocks. Fitch believes price increases in the older LTC block will improve statutory earnings, but could also result in some adverse selection. Fitch said the negative rating outlook reflects its concerns about continuing losses at Genworth s mortgage insurance business and the potential effect on Genworth s life companies. Rating Action: Mutual of Omaha (Downgraded) On August 26, Moody's Investors Service downgraded the insurance financial strength ratings of Mutual of Omaha Insurance Co. and its principal operating subsidiary, United of Omaha Life Insurance Co., to A1 (Good) from Aa3 (Excellent). The outlook for the ratings was changed to stable from negative. According to Moody s, the downgrade was based on a shift in the company s business mix to products that have weaker risk profiles than its traditional life and annuities, primarily Medicare Supplement and banking. The impact of this shift has been an increase in the volatility of the company s earnings, which Moody s expects to continue. Moody s stated that the company s Medicare Supplement business experienced significant losses in the first half of 2011 due to higher than expected loss ratios. Page 2 of 6

3 Moody's stated that the rating and outlook reflects the companies' established position in providing life insurance and fixed annuity products to the mass market and their outstanding capitalization and highquality investment portfolio with limited holdings of non-agency residential mortgage-backed securities. Rating Action: Ohio National (Affirmed, Outlook Revised) On September 6, Moody's Investors Service has affirmed the A1 (Good) insurance financial strength ratings of Ohio National Life Insurance Co. and Ohio National Life Assurance Co., the core insurance subsidiaries of Ohio National Financial Services, Inc. (Ohio National). The outlook for the ratings was changed to negative from stable. According to Moody s, the negative outlook was driven primarily by Ohio National s higher risk profile due to rapid growth and concentration in variable annuities with guarantees (Moody s says VAs with guarantees represent 55% of the company s statutory reserves). In addition, Moody s says that Ohio National has a relatively high level of financial leverage compared to its similar-sized peers. Moody s says that Ohio National s ratings reflect the company s strong capital position and a stable block of inforce life insurance. The company also has a conservative investment portfolio with minimal exposure to equities, alternative investments, and CMBS. Moody s Comments on U.S. Life Insurance Industry Scorecard In a special comment published by Moody s Investors Service discussing its scorecard on the U.S. life insurance industry, the rating agency said that the industry remains financially strong despite pressures from the weak economic recovery. Moody s summarized the following strengths and challenges for the U.S. life insurance industry: Strengths - Strong capitalization - Historically good profitability, aided by the embedded value of in-force business - Liquid, good-quality, and well-diversified investment portfolios - Strong operating company cash flow and liquidity - Improved financial flexibility Challenges - Higher-than-average asset losses in the near term, primarily via real estate-related impairments - Below-normal operating earnings from lower asset-based fees as a result of lower equity markets, reduced levels of financial leverage, reduced risk profiles, and low interest rates - Volatility in earnings and capital from legacy VA business - Sluggish group and individual life insurance and annuity sales due to high unemployment and uncertain estate tax laws - XXX/AXXX reserve financing issues related to term and UL products - Pressure to return excess capital to shareholders via share buybacks and dividends Page 3 of 6

4 Moody s Comments on Risk to Life Insurers of Protracted Low Interest Rates Low interest rates over a period of five years or more would subject U.S. life insurers to substantial losses, which could result in rating downgrades according to a special comment published by Moody s Investors Service. Moody s says their baseline economic scenario forecasts a sluggish recovery and a slow increase in interest rates, but there is a likelihood for a stagflation scenario where interest rates remain low for a prolonged period of time. In that scenario, life insurers would experience significantly lower investment income, higher statutory reserve requirements, DAC writedowns, and general weakening in overall financial profiles. The result of this scenario could include multi-notch downgrades for some life insurers, specifically those with concentrations in fixed-rate annuities, universal life with high minimum interest crediting rates, variable annuities with guaranteed living benefits, long term care, and long term disability. S&P Issues Analysis of Unum Group On August 30, S&P released its analysis of Unum Group and its operating subsidiaries. The report details the rationale for S&P's current 'A-' (Strong) financial strength ratings with a positive outlook for Unum. Major rating factors cited as strengths are Unum's strong competitive position in group and voluntary products; stable operating performance and diverse earnings; conservative investment portfolio; very strong capitalization; and good financial flexibility. Major rating factors cited as weaknesses are the potential depressed sales and elevated disability claims due to sustained economic weakness, and a concentration in U.S. group disability insurance, which has historically generated volatile earnings. A copy of the report can be obtained by contacting Plybon & Associates at Moody s Issues Analysis of ING U.S. On September 8, Moody s Investors Service released its analysis of ING s U.S. life insurance companies. The report details the rationale for Moody s current 'A2' (Good) financial strength ratings with a negative outlook. Moody s said the ratings are based on the group s sizeable share in the domestic retirement services market and its role as an established U.S. provider of life insurance products. The negative outlook reflects ING U.S. weak earnings profile relative to its domestic peers and the uncertainty and execution risk associated with the IPO process. A copy of the report can be obtained by contacting Plybon & Associates at Page 4 of 6

5 LIMRA Reports Flat Individual Life Sales in Second Quarter LIMRA reported that second quarter sales of individual life insurance, as measured by annualized premiums, grew by just 1% over the same period a year earlier. The highest growth was seen in whole life as premiums were 5% higher in the second quarter of Sales of universal life were up by 1% and sales of variable life were up by 3%. However, sales of term life declined by 5%. The drop in term sales was attributed to a combination of the relatively high reserve funding costs associated with the product and a de-emphasizing of the product type by certain publicly-owned insurers who have focused on more efficient capital deployment strategies. MetLife Overtakes Prudential as Top Seller of Variable Annuities According to LIMRA, MetLife, Inc. became the number one seller of variable annuities in the second quarter, bumping Prudential Financial from the top spot. Industry sales of variable annuities totaled $40.9 billion in the second quarter, an increase of 16% over the prior year. A complete summary of M Carrier financial strength ratings can be found at the end of this update. M Financial Group will continue to monitor and evaluate developments relating to M Carriers and the industry as a whole. For more information, please contact: Bob Plybon, CLU, ChFC Jay Kenerly, MSFS Chairman, CEO COO/Director of Marketing rplybon@plybon.com jkenerly@plybon.com Lou Pierce, CLU Doug Stone, CLU, ChFC President Business Development lpierce@plybon.com dstone@plybon.com Page 5 of 6

6 M Financial Carriers Summary of Financial Strength Ratings () A.M. Best John Hancock A+ Superior 2nd of 15 Negative 12/2/2010 Lincoln National A+ Superior 2nd of 15 Stable 11/11/2010 Nationwide A+ Superior 2nd of 15 Negative 3/16/2011 Pacific Life A+ Superior 2nd of 15 Stable 6/28/2011 Prudential A+ Superior 2nd of 15 Stable 6/8/2011 Sun Life A+ Superior 2nd of 15 Stable 10/27/2010 UNUM A Excellent 3rd of 15 Stable 1/26/2011 ING-Security Life A Excellent 3rd of 15 Stable 6/16/2011 Lincoln Benefit A+ Superior 2nd of 15 Negative 12/15/2010 Standard & Poor's John Hancock AA- Very Strong 4th of 21 Stable 12/13/2011 Lincoln National AA- Very Strong 4th of 21 Stable 12/2/2010 Nationwide A+ Strong 5th of 21 Stable 8/2/2011 Pacific Life A+ Strong 5th of 21 Stable 6/28/2011 Prudential AA- Very Strong 4th of 21 Stable 9/30/2010 Sun Life AA- Very Strong 4th of 21 Stable 5/25/2011 UNUM A- Strong 7th of 21 Positive 8/15/2011 ING-Security Life A Strong 6th of 21 Negative 12/20/2010 Lincoln Benefit A+ Strong 5th of 21 Stable 12/23/2010 Moody's John Hancock A1 Good 5th of 21 Stable 5/11/2011 Lincoln National A2 Good 6th of 21 Positive 7/29/2011 Nationwide A1 Good 5th of 21 Stable 6/7/2011 Pacific Life A1 Good 5th of 21 Stable 6/6/2011 Prudential A2 Good 6th of 21 Positive 7/20/2011 Sun Life Aa3 Excellent 4th of 21 Negative 8/31/2011 UNUM A3 Good 7th of 21 Positive 8/4/2011 ING-Security Life A2 Good 6th of 21 Negative 9/8/2011 Lincoln Benefit A1 Good 5th of 21 Stable 6/23/2011 Fitch Ratings John Hancock AA- Very Strong 4th of 21 Stable 6/24/2011 Lincoln National A+ Strong 5th of 21 Stable 6/28/2011 Nationwide A Strong 6th of 21 Stable 8/25/2011 Pacific Life A+ Strong 5th of 21 Stable 7/18/2011 Prudential A+ Strong 5th of 21 Stable 3/30/2011 Sun Life AA- Very Strong 4th of 21 Stable 6/22/2011 UNUM A Strong 6th of 21 Stable 6/23/2011 ING-Security Life A- Strong 7th of 21 Evolving 8/19/2011 Lincoln Benefit A- Strong 7th of 21 Stable 3/8/2011 DUE CARE UPDATE Page 6 of 6