A.M. Best Places Ratings of Security Benefit Corporation’s Subsidiaries Under Review With Positive Implications

A.M. Best Co. has placed the financial strength rating of B (Fair), issuer credit ratings of “bb” and debt ratings of Security Benefit Life Insurance Company (Topeka, KS) and its subsidiary, First Security Benefit Life Insurance and Annuity Company of New York (Rye Brook, NY) (collectively known as Security Benefit Life) under review with positive implications. Both companies are subsidiaries of Security Benefit Corporation. (See below for a detailed listing of the debt ratings.)

These rating actions follow the announcement of a definitive purchase agreement entered into between Security Benefit Corporation and Guggenheim Partners, LLC (Guggenheim). Under this agreement, Guggenheim and a group of private investors will acquire Security Benefit Corporation and its subsidiaries. The transaction is expected to close in either late second or early third quarter 2010, with the Guggenheim-led group making an investment of approximately $400 million. In June 2009, Guggenheim became the investment advisor for Security Benefit Life’s general account assets.

As a result of the purchase transaction, Security Benefit Life will receive a substantial cash infusion immediately, which will improve its reported capital position and risk-adjusted capitalization. The balance of the remaining funds will follow upon the closing and after a demutualization process is completed.

The ratings will remain under review pending the successful completion of the acquisition, demutualization and A.M. Best’s discussions with management regarding the group’s future operating projections, investment portfolio and capital structure.

The following debt ratings have been placed under review with positive implications:

Security Benefit Life Insurance Company—

-- “b+” on $50 million 8.75% surplus notes, due 2016

-- “b+” on $100 million 7.45% surplus notes, due 2033

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

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at http://www.ambest.com/ratings/methodology.