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<ul><li><p>Ultimate Parent:New York Life Insurance Company</p><p>NEW YORK LIFEINSURANCE COMPANY</p><p>51 Madison Avenue, Room 353New York, NY 10010</p><p>Web: www.newyorklife.comTel: 212-576-7000 Fax: 212-576-7317AMB#: 006820 NAIC#: 66915Ultimate Parent#: 006820 FEIN#: 13-5582869</p><p>BESTS CREDIT RATINGBests Financial Strength Rating: A++ Outlook: Stable</p><p>Bests Financial Size Category: XV</p><p>RATING RATIONALEThe following text is derived from A.M. Bests Credit Report on New</p><p>York Life Group (AMB# 069714).</p><p>Rating Rationale: The ratings of the members of New York Life Group(New York Life), which include New York Life Insurance Company andits insurance subsidiaries, reflect the groups market position among theleaders in the U.S. life insurance industry, its highly productive careeragency force and its superior risk-adjusted capitalization. The ratings alsoconsider New York Lifes favorable liability profile, stable operating earn-ings and commitment to mutuality. Partially offsetting these positive fac-tors are the potential for higher than normal, but manageable, creditlosses within the groups general account investment portfolio, its rela-tively large exposure to interest rate risk and the intense competition thegroup faces in its core individual life and asset accumulation businesses.</p><p>New York Life benefits from the competitive advantages associatedwith its core career agency force, which has led the industry inMillion Dollar Round Table membership for 58 consecutive years.The agency channel has contributed to the groups strong persistencyand prominent market presence in individual life with particularstrength in the middle market, while delivering strong sales growth.With its sizable in-force block of traditional life insurance and con-servative product portfolio, New York Life has one of the more cred-itworthy liability profiles in the industry. The strong fundamentalswithin New York Lifes core domestic individual life operation con-tinue to be the foundation of the groups operating performance,which supports its superior risk-adjusted and absolute capitalizationlevels. A.M. Best also notes that New York Lifes Investment Grouprealized a 25% increase in earnings in 2012, reflective of strongspread revenue and asset-based fees from higher assets under man-agement, which resulted from a combination of strong positive netflows, market appreciation and fund adoptions. Additionally, A.M.Best notes that New York Life has an added measure of financial flex-ibility in support of its strong risk-adjusted capital position throughthe management of its policyholder dividend scale. A.M. Best viewsNew York Lifes mutual form of ownership as a positive rating factor.As a mutual insurer, New York Life is able to manage its businesseswith a long-term perspective, as well as a singular focus on providingvalue to its policyholders.Overall, A.M. Best believes New York Lifes future investment loss-</p><p>es will be lower than the industry average (as a percentage of capitaland surplus) and that statutory earnings will exceed expected losses.While A.M. Best believes that New York Lifes investment manage-ment capabilities are strong, the potential still exists for higher thannormal, albeit manageable, credit losses within the groups general</p><p>NEW YORK LIFE INSURANCE COMPANY</p><p>New York, New York</p><p> 2013 A.M. Best Company, Oldwick, NJ 08858 Printed June 26, 2013 Page 1 of 6</p><p>A++</p></li><li><p>account investment portfolio, as the group maintains significant hold-ings in public/private corporate bonds and structured securities. Inaddition, New York Life has approximately $19 billion (representingroughly 97% of total adjusted capital) of direct exposure to wholecommercial mortgage loans, and the ongoing uncertainty in the com-mercial real estate market suggests the potential for impairments.However, A.M. Best notes that the commercial mortgage portfoliomaintains below average exposure to properties with higher loan-to-value ratios and lower debt service coverage ratios. A.M. Best alsonotes that New York Life maintains a relatively high exposure to inter-est rate risk related to its blocks of interest-sensitive life and annuityreserves, although this risk is actively managed through hedging andother techniques. Lastly, similar to its peers in the domestic individuallife and annuity marketplaces, New York Life continues to face intensecompetition and will be challenged to maintain its market positionsand sales momentum over the long term.</p><p>While the members of New York Life continue to maintain A.M.Bests highest ratings, a potential negative rating action could resultfrom a significant increase in realized investment losses, a meaningfulincrease in interest-sensitive liabilities as a percentage of total generalaccount reserves, and/or a material decline in risk-adjusted capitaliza-tion.</p><p>KEY FINANCIAL INDICATORS ($000)Total Capital</p><p>Capital Asset Net NetSurplus Valuation Premiums Invest Net</p><p>Year Assets Funds Reserve Written Income Income2008 117,305,625 11,793,474 648,853 11,285,898 5,148,919 -564,3592009 117,835,521 13,686,268 831,822 11,161,524 5,035,365 455,2672010 122,007,530 14,716,846 1,477,334 12,473,513 4,860,580 525,5572011 130,685,773 15,128,949 2,070,302 14,107,160 4,865,404 262,6132012 134,726,848 16,568,538 2,279,222 13,720,802 5,060,276 690,465(*) Data reflected within all tables of this report has been compiled from the company-filed statutorystatement.</p><p>CORPORATE OVERVIEWNew York Life Insurance Company (NYLIC), a mutual life insurer, and</p><p>its subsidiaries (collectively referred to as NYL), offers a wide range ofinsurance and investment products and services including life, long termcare (LTC) insurance, annuities, pension products, mutual funds andother investments and investment advisory services. NYL maintainsstrong market positions in the life insurance, annuities and executive ben-efits markets for middle and upper income individuals, as well as institu-tions of all sizes throughout the United States and abroad. NYL is one ofthe largest ordinary life writers in the country. The companys vast careeragency distribution network, with a wide geographic reach, helped estab-lish this strong competitive position, which has been enhanced in recentyears by new distribution sources. NYL includes New York LifeInsurance and Annuity Corporation (NYLIAC), a wholly owned sub-sidiary through which NYL offers variable and interest-sensitive prod-ucts, and NYLIFE Insurance Company of Arizona (NYLAZ). Thecompany intends to maintain its status as a mutual company in order toremain uniquely aligned with its customers, with sufficient capital avail-able to support its growth strategies. NYLs businesses are managed undertwo primary segments: Insurance Group and Investments Group.</p><p>BUSINESS PROFILEThe following text is derived from A.M. Bests Credit Report on</p><p>New York Life Group (AMB# 069714).</p><p>In 2012, NYL reorganized into two major business units: InsuranceGroup and Investments Group. Businesses that operate within theInsurance Group include: Domestic Life, Long Term Care Insurance,New York Life Direct, Group Membership Association and Mexico.The NYL Investments Group is focused around the following keybusinesses: General Account Investment Management; InvestmentAnnuities; Retail Mutual Funds; Investment Management Boutiques;Guaranteed Products; Retirement Solutions.INSURANCE GROUPNYL is one of the leading writers of individual life insurance in the</p><p>U.S. and offers a broad array of participating whole life, survivorshipwhole life, fixed and variable universal life, fixed and variable sur-vivorship universal life, term life insurance, and LTC insurance. Thecompany also offers corporate-owned life insurance (COLI) andbank-owned life insurance (BOLI) opportunistically.NYL markets its traditional life insurance products primarily to</p><p>middle and also to upper income individuals primarily through itslarge career agency system. This nationwide system is one of NYLsmost valuable strengths, typically producing over half of total lifeinsurance sales. Approximately one-fifth of active field agents in theU.S. are members of the Million-Dollar Round Table (MDRT),demonstrating their success in meeting high standards for productiv-ity and professionalism. In addition to the wide geographic reach, thesystem has a strong presence in various cultural and womens mar-kets. To increase productivity through the career agency channel,NYL has introduced innovative new products and technology-aidedsupport and training. Life and annuity sales through this channel havegrown steadily.LTC insurance products are also sold on an individual basis through</p><p>NYLs career agency force. NYL brings a strong pricing and under-writing discipline to this market which is appropriate for the risk inthe business.The Advanced Markets Network (AMN) provides an additional dis-</p><p>tribution channel for the sale of COLI and BOLI through specializedinsurance brokers. This channel distributes products that are oftencustomized for the needs of these markets.New York Life Direct is responsible for the AARP Life Insurance</p><p>Program and the AARP Lifetime Income Program, which marketgroup life insurance products and guaranteed lifetime immediateincome annuities to AARP members. Through an exclusive market-ing arrangement with AARP, NYL directly markets life insuranceand fixed immediate annuities to the associations 37 million mem-bers. By virtue of this relationship, NYL is the largest direct marketerof life insurance in the U.S., insuring over 2.0 million AARP mem-bers with over $35 billion of life insurance inforce. NYL has consis-tently increased its sales in this line, while maintaining strongpersistency, favorable mortality and expense management. In 2006,NYL began to directly market fixed immediate annuity products(AARP Lifetime Income Program) to its members and has becomethe number two direct marketer of fixed annuities in the country.Additionally, NYLs direct marketing expertise has recently been</p><p> 2013 A.M. Best Company, Oldwick, NJ 08858 Printed June 26, 2013 Page 2 of 6</p></li><li><p>expanded to generate leads for products sold through the career agencyforce. This year NYL extended its contract with AARP on the LifeProgram and is confident it will continue to grow its presence in the50 year old plus market with AARP.</p><p>Group Membership Association sells life insurance and related prod-ucts to members of professional associations through specialized bro-kers. Group Membership Association underwrites Group Life,Accidental Death and Dismemberment (AD&amp;D) and DisabilityIncome insurance programs to large professional associations andother groups. The portfolio also includes an in-force block of majormedical business. Serving the members of more than 600 associations,Group Membership Association is the leading provider of life insur-ance programs to professional associations.</p><p>Mexico is NYLs single strategic presence in international markets.The company has exited India, China, Hong Kong, Thailand and SouthKorea. The largest remaining subsidiary, Seguros Monterrey New YorkLife, S.A. (SM), was acquired in 2000 and ranks among top insurersproviding individual life insurance in the Mexican marketplace.</p><p>INVESTMENTS GROUPWith the increasing market demand for retirement solutions and asset</p><p>management services, along with low capital requirements and poten-tial for high profit margins, investment management represents anattractive business for NYL. The Investments Group leverages itsinvestment management expertise, its established multi-channel distri-bution network and its diversified customer base to expand theirinvestment management services. As of December 31, 2012, theInvestments Group held over $364 billion of assets under manage-ment, an increase of 14% over prior year; driven by strong net flows,market performance and fund adoptions.</p><p>General Account Investment ManagementThis business is primarily focused on delivering superior risk-adjust-</p><p>ed performance for the General Account of New York Life. This isdone through the companys Fixed Income and Real Estate Groups-that manage over $184 billion in assets under management. In additionto managing the general account assets of the New York Life insurancecompanies, General Account Investment Management business gener-ates third party fee revenue predominantly by syndicating mid-marketfinancing and then structuring and managing collateralized debt trans-actions through, Madison Capital Funding.</p><p>Madison Capital Funding provides financing solutions primarily toprivate equity backed middle market companies in the form of seniorloans, mezzanine financing and equity co-investment.</p><p>Investment AnnuitiesNYLs Investment Annuities include fixed and variable deferred</p><p>annuities, structured settlements and guaranteed income annuities.Other than structured settlements, Investment Annuities are soldthrough NYLIAC. Variable products are offered exclusively throughNYL agents while fixed annuities and guaranteed income annuities aresold through banks and other financial institutions in addition to thecore agency channel. For more than half of new variable annuity pre-miums, fees are based on a percentage of premium versus the commonindustry practice of a percentage of assets. This approach providesgreater earnings stability for the company, as fee revenue is not sensi-tive to equity market volatility.</p><p>Guaranteed Lifetime Income, GLI, products are immediate fixedannuities that are sold through NYLIAC. The companys strongagency and bank distribution performance has led to record sales ofGuaranteed Lifetime Income products for several years.Mutual FundsNYLs Mutual Funds are sold under the companys MainStay fund</p><p>brand, which offers over 50 mutual funds, representing over $70 bil-lion in assets under management. MainStay is among the fastestgrowing fund complexes, ranked by Barrons for five consecutiveyears among the top fund families for long term investment perfor-mance. The funds leverage the expertise of NYLs boutiques to pro-vide investment solutions across a broad array of asset classes. Theproducts are sold through a substantial Third Party Distributiongroup who market through leading financial intermediaries in 3 pri-mary channels: national / regional broker dealers, independents andbanks. NYL Agents are another key sales channel as well as NewYork Life Retirement Plan Services.Institutional Investment ManagersThrough its multiple boutique investment structure, The</p><p>Investments Group offers a broad array of investment capabilities andstrategies managed for the benefit of institutional and individualclients representing over $128 billion in assets under management.In addition to sub-advising the MainStay mutual funds, the boutiquesalso manage over $76 billion in other third party assets.Guaranteed ProductsGuaranteed Products (GP) provides a full array of products to both</p><p>the qualified and non-qualified markets via guaranteed interest con-tracts and funding agreement-backed note programs to serve theneeds of institutional investors (...</p></li></ul>


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