Best Affirms Rating for TD Reinsurance of Barbados

March 16, 2005

A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of TD Reinsurance (Barbados) Inc. (TD Re). The outlook for both ratings is stable.

The rating reflects TD Re’s consistently strong operating performance, secure capitalization, favorable liquidity position and a favorable mix of 80% retail and 20% wholesale business.

The company’s financial strength is underpinned by its superior operating returns, reflecting disciplined underwriting, a strategy focused on its core life and health business and adherence to sound investment practices, resulting in strong annual earnings growth.

Although surplus growth has been tempered by stockholder dividends, TD Re maintains a capital position that adequately supports its life reinsurance activities, and its balance sheet is supported by a portfolio of high quality assets. The company’s superior underwriting results and liquidity position are sustained by management’s conservative operating philosophy.

Although TD Re has strong operating fundamentals, A.M. Best believes the company may be affected by the business fluctuations and competitive pressures that exist in its core life and health business.

Additionally, the continued low interest rate environment and the highly competitive nature of the life reinsurance marketplace may pressure future earnings growth and present challenges to future superior financial performance. Management has addressed this proactively by expanding its list of treaty partners and selectively adding new products to complement current credit product offerings.

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