A.M. Best Downgrades Ratings of XL Life Ltd

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has downgraded the financial strength rating (FSR) to A- (Excellent) from A (Excellent) and issuer credit rating (ICR) to “a-” from “a” of XL Life Ltd (XL Life) (Hamilton, Bermuda). XL Life is ultimately owned by XL Capital Ltd (Cayman Islands) (NYSE: XL). The outlook for both ratings is stable. (Please see related press release dated October 16, 2008.)

These rating actions reflect XL Life’s diminishing business profile within XL Capital Ltd, the pressure on capitalization primarily due to FAS 115 adjustments and the generally declining premium produced by XL Life. In addition, XL Capital Ltd has indicated that the life operations have been undergoing a strategic review, which is expected to conclude in fourth quarter 2008. Although XL Capital Ltd has contributed capital to support both realized and unrealized losses, due to the uncertainty and volatility of the markets, additional mark to market adjustments and realized losses may occur in fourth quarter 2008.

A.M. Best believes that the downgrades better reflect XL Life’s long-term financial strength on a stand-alone basis, given its diminished status within XL Capital Ltd. Additionally, these rating actions coincide with the FSRs and ICRs of XL Life Insurance and Annuity Company (Schaumberg, IL) and XL Re Life America Inc (Wilmington, DE).

For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.