Best Affirms FSR for Scotia Insurance – Barbados – Ltd.

April 5, 2005

A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Scotia Insurance (Barbados) Limited (Barbados). All ratings have a stable outlook.

The ratings reflect Scotia’s very strong and consistent operating performance, favorable capitalization and excellent liquidity position. The company’s financial strength is enhanced by strong operating fundamentals, which reflect disciplined underwriting, a focused strategy on its core creditor life business and conservative investment practices resulting in favorable earnings performance and earnings growth.

Scotia maintains a capital position that strongly supports its life reinsurance activities. The company’s profitable underwriting results are sustained by a conservative operating philosophy and experienced management, and the balance sheet is supported by a portfolio of highly liquid short-term assets, which are issued by related parties and highly rated Canadian banks.

While Scotia has strong operating fundamentals, A.M. Best believes the company is subject to business fluctuations and competitive pressures stemming from a dependence on creditor life and health business.

Additionally, the highly competitive nature of the life reinsurance market may pressure future earnings growth and present challenges to the maintenance of Scotia’s historically strong financial performance.

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