Financial Strength

Fidelity Life offers the security of an A- (Excellent) rating from A.M. Best, the leading provider of ratings, news and financial data for insurance companies. This rating was reaffirmed on May 19, 2011, with a Stable Outlook.*

A.M. Best financial strength ratings are based on evaluations of a company’s balance sheet, operating performance and business profile, and constitute an opinion of an insurer’s financial strength and ability to meet obligations to its policyholders.

Fidelity Life continues to maintain a strong capital position. In 2010, Total Assets and Capital and Surplus declined due to the continued growth in life insurance sales, the planned run off of past annuity business and one time reserve strengthening. The declines from the growth in sales are the result of required statutory accounting practices related to the acquisition costs of new insurance policies sold, which are required to be expensed as incurred. Under Generally Accepted Accounting Principles (GAAP) incremental first year policy acquisition costs are recorded as an asset and recorded as expense over the anticipated premium period of the underlying insurance contracts.

Fidelity Life’s statutory Capital and Surplus remains well in excess of required levels to support its assets and liabilities.

The summarized financial information shown in the table below is developed from the statutory basis financial statements filed annually with the Illinois Department of Insurance. These financial statements are prepared on the basis of statutory accounting practices which differ from financial statements prepared in accordance with GAAP. For information on the GAAP basis consolidated financial statements of the MMHC Group, please see the 2010 Annual Report.

Selected Financial Information AS OF DECEMBER 31 (IN MILLIONS)
	2009	2010
Total Assets	$485	$481
Capital and Surplus	$220	$196
All amounts are based on Statutory Accounting Practices

*For the latest rating, access www.ambest.com