• AD 9/29/2008 - Wall Street Journal, USA Today and other publications.
• AIG At-a-Glance 9/29/2008
• FAQ for consumers and Producers 9/29/2008
• AIG Letter 9/29/2008

Older Releases
NEWS 9/25/2008
In the News for consumers
FAQ for producers
Winter Letter - Producers - 9-16-08
AIG Solvency NAIC 9/16
AIG FAQ - 9/15/2008
AIG Solvency NAIC NAIC 9/17
AIG Fed Press Release 9/17

1. Extremely strong balance sheet. Western & Southern's capital to asset ratio is
   13.0 percent (as of June 30, 2008). This is more than double the average of other life
   insurance companies rated by Standard & Poor's in the AA and AAA categories.
2. Recent, re-affirmed ratings. On July 9, A.M. Best rated us A++ (Superior) and on
   September 12, Standard & Poor's reaffirmed our existing rating of AA+ (Very Strong).
   The outlook from both agencies is "stable." The Standard & Poor's rating makes
   Western & Southern one of the 10 strongest life insurance groups in the world.
3. Low exposure to troubled firms. Our combined total exposure to Lehman, Merrill,
   AIG, Fannie and Freddie is less than 1% of our total assets.
4. Investment grade fixed income assets make up 93% of our portfolio. And 95%
   of our mortgage-backed securities are AAA rated, the highest available.
5. No default risk insurance. We are not in the business of insuring others' default risk,
   as AIG did through credit default swaps.

An Important Message from LSW
President and CEO Wade H. Mayo

With Wall Street in crisis and each day bringing new headlines of turmoil in yet another financial institution, I want to reassure you that Life Insurance Company of the Southwest (LSW) and National Life Insurance Company remain very strong.

While we are not immune to the turbulence we are seeing in the markets and, like other investors, we will experience some losses, our investments are so broadly diversified that we do not foresee that this week's troubles will have any meaningful impact on our overall long-term financial condition.

Our time-tested prudent investment approach continues to serve us well, and so does our structure. As a member of the National Life Group, LSW and National Life Insurance Company are part of a mutual holding company structure that allows us to focus on our long-term obligation to policyholders rather than the immediate demands of shareholders.

We at LSW and National Life have built up substantial capital: Our combined total GAAP equity stands at $1.4 billion and at the end of June our statutory surplus stood at $850 million.

And our decisions in recent years to focus on our core businesses mean that we have not strayed into the speculative areas that are now causing such difficulty for other businesses.

In our life and annuity business, we have maintained high standards for our products, marketing practices and underwriting. We've consistently backed our obligations with a diversified portfolio of quality assets.

We have done so because it is the right thing to do - and because it is how we've done business through the years. Ever since LSW was chartered in 1955 and National Life Insurance Company in 1848, we have taken seriously our responsibilities to our policyholders, and we know what it takes to navigate around the financial storms in troubled times.

And that's what we continue to do today. You and LSW help people plan for the uncertain times by providing outstanding financial advice and products to help them live and retire in dignity. Thank you for being part of our LSW team.

Sincerely,

Wade H. Mayo
President and CEO
Life Insurance Company of the Southwest

How to Address Market Concerns Regarding
AIG and State Guaranty Fund Associations

In response to the ongoing issues with the market, and in particular the recent events surrounding AIG Holdings, we’d like to take this moment to remind agents of LSW’s policy on commenting on other insurers. As you know, the entire insurance industry is viewed by many consumers as “one.” Thus, it cannot be stated enough that anytime a company in our business receives negative publicity, the entire industry is affected.

LSW is a company based on trust, honesty, and integrity in everything we do – from our products right down to how we represent ourselves in the field. While we like to compete, we do so on products and services, not by negative comments.
LSW stands behind the belief that it has always held that speaking ill of another company, regardless of their circumstances, is not an acceptable practice.

To this point, LSW received a document from the Oregon Insurance Division which is generally representative of the law in most jurisdictions. Please CLICK HERE to read the document in full.

Many policyholders are asking the question whether the FDIC covers their policy. As you know, the answer is “no,” but the policy is covered by the State Guaranty Association of the person’s state of domicile (note: coverage limits and rules are different for each state). Please go to www.nolhga.com for information regarding coverage and answers to frequently asked questions.

Important Reminder: It is not permissible to use state guaranteed fund coverage as a sales tool in your presentation or in the sales process.

Mutual of Omaha's Financial Position Remains Strong

The recent upheaval on Wall Street has shaken many Americans' confidence in the strength and stability of our financial system. It's perfectly natural to ask yourself if the insurance companies you offer to your clients will be there for the long haul and back up the promises you make with every product you sell.

At Mutual of Omaha, we take those promises you make – and those we make to you – seriously. That's why we can say with confidence that our financial foundation is very strong and continues to grow.

The Strongest Financial Position in Our History
Mutual of Omaha ended 2007 in the strongest financial position in our history with record gains in key financial measures and a record statutory surplus. This represents security for our policyholders and future growth for our organization.

Unlike many of our competitors, we have not been impacted by the deterioration of the sub prime credit market that has been the catalyst for much of the current market turmoil. We've consistently earned high marks from leading rating agencies like A.M. Best, which upgraded Mutual of Omaha's financial strength rating to A+ (Superior), the second highest of its 16 ratings in 2007.

A Disciplined Investment Strategy
A key to our financial strength is our disciplined investment strategy and our diversified portfolio of carefully selected investments. We realize that it's not our money we're investing, it's our policyholders' and we never forget that they're counting on us to invest those premium dollars wisely.

The majority of our portfolios are invested in bonds with high-quality credit ratings. We emphasize investments in those asset classes that can most effectively fund our insurance products while providing adequate risk-adjusted returns. For both Mutual of Omaha and United of Omaha, 97 percent of the bonds are in the highest National Association of Insurance Commissioners (NAIC) bond quality classifications – categories 1 and 2.

A Company You Can Count On
As we enter our 100th year in business, Mutual of Omaha is a company you can count on not just for a competitive product portfolio, but also for the strength and stability you and your clients demand in these uncertain times. We look forward to working with you for years to come.

Sincerely,
Dave Ahrendt
Senior Vice President
Retirement Plans Division

Date: October 6, 2008
To: North American Agents

RE: Financial Update

A few weeks ago we sent you some information on the financial strength of North American Company for Life and Health Insurance. Since that time, the financial markets have continued to experience severe stress. We thought it would be useful to provide you with some specific information on our positions in the financial services sector, as well as some perspective on how we are managing through this environment.

First, you should know that much of what you are seeing today was not a surprise to us or Guggenheim Partners, our investment manager. In September 2005 Scott Minerd, Chief Strategist for Guggenheim Partners, stated that he believed we were going to see a residential real estate crisis of “Biblical Proportions.” No one wanted to believe it at the time, but that is clearly what happened.

For us, this became a call to action and is the reason, as we mentioned in our last release, that we have less than one-half of one percent of our assets in subprime mortgages.

Additionally, Guggenheim moved to the next step of determining who would be most impacted by a housing crisis. The obvious answer was investment banks and commercial banks. For that reason, we significantly reduced our exposure to this sector. Of some of the more prominent names you have been reading and hearing about lately, we have absolutely no loss exposure to AIG, Fannie Mae, Freddie Mac, National City, Wachovia or WaMu in our investment portfolio. For Bear Stearns and Lehman Brothers, North American has realized losses and taken impairment write-downs of less than 0.08% of our statutory admitted assets at September 30, 2008 and we have no remaining investment balances in these entities.

As you can see, at this point the losses are modest and very manageable. We think it is also important to point out the differences between the types of risks taken by traditional life insurance companies and other financial institutions. The life insurance business is highly regulated and investment portfolios like ours are quite conservative. In fact, over 58% of our portfolio is in AAA rated securities and over 95% of our portfolio is rated investment grade.

We have been reading and hearing a great deal from the media about the problems facing companies in the financial services industry today. Government bailouts, attempts to raise additional capital, forced mergers and even bankruptcy have become the solutions for many companies, and surely there will be more in the days ahead. It is only natural that our policyholders, distribution partners and employees may ask how this will impact North American Company for Life and Health Insurance.

Our conservative investment policy has required that investments in individual companies be kept at low levels for a company our size, which has resulted in a much diversified investment portfolio. With more than $30 billion in invested assets, however, it should not be surprising that we have investments in financial services companies such as banks, investment banks and insurance companies. We also have investments in mortgage-backed securities. However, we can also say that we have limited our investment in subprime mortgage-backed investments over the past few years, which has kept our exposure to these investments very low compared to many companies. In fact, subprime currently represents less than one-half of one percent of our investment portfolio.

In addition, problems in the insurance side of the business have not resulted from basic products like the life insurance and annuities that have been the focus of our Company. Rather, they have come from more exotic types of insurance or investments, such as credit default swaps that insure bonds against default. This is not a business we are in.

To date, our losses have been small relative to our capital and total assets and they have not had a material effect on the financial position of our companies or our ratings. No one can predict the future, however. The magnitude of any future losses will depend on how our economy and the financial markets respond to the current issues, and how long this investment climate continues. We have already taken steps to react to the current state of affairs, and we can assure you we will take more steps in the future as we continue to monitor markets and individual investments in our portfolio.

The issues we have seen have been manageable for our insurance companies and we expect this to be the case in the future.

Please feel free to call Sales Support at 800-800-3656, extension 10411, or your Sales Vice President with any questions or concerns.

Toll Free (800) 373-9697
Fax (818) 881-6973
Last Updated 9/5/2008
On-Line Since 1995
CA Insurance License# 0518378 and 0B91910

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