Standard & Poor's last week assigned its double `A' counterparty credit and financial strength ratings to Centre Life Insurance Co., a US-based life insurance company owned by Centre Solutions (Bermuda) Ltd.

At the same time, Standard & Poor's affirmed various ratings on Centre and related subsidiaries and affiliates. S &P said the outlook is stable.

Ratings on Centre Life Insurance Co. are based on explicit group support including various forms of intercompany reinsurance that, in the aggregate, serve to protect the company's capital base from adverse financial developments.

The ratings reflect excellent capitalisation, good operating performance, solid business position, and a strong management team that, in the aggregate, positions Centre as strategically important to the Zurich Insurance Co. Group (double A plus financial strength rating).

The ratings on Centre's two preferred stock issuances reflect a standard notching from the counterparty credit rating on Centre in jurisdictions where policyholder liabilities rank pari passu with those of senior unsecured creditors.

Major Rating Factors:

Capitalisation.

GAAP equity of $1.1 billion as of December 31, 2000, is considered extremely strong in light of the exposures assumed. The capital adequacy, as determined by Standard & Poor's financial enhancement capital adequacy model, is 210.4 percent.

Historically strong operating performance fell in 2000.

Pre-tax earnings declined substantially in 2000 to $31.4 million, resulting in an adjusted four-year average ROA of 4.0 per cent.

Losses were substantially isolated to a select number of Lloyd's accounts. Further deterioration on these accounts is not expected as reserves have been established up to or near the full contractual limit.

Solid business position.

Centre's niche business position is considered strong as evidenced by its comprehensive distribution network that provides non-traditional customised insurance, finite risk reinsurance solutions, financial guarantees, credit enhancements on collateralised debt obligations, structured asset finance, and project finance transactions, and residual asset value insurance to insurers, financial institutions, corporations, and reinsurers world-wide.

Dynamic business model.

In its 13-year track record, the company has effectively delivered innovative product solutions to a diversified client base that has progressively expanded.

Its business paradigm may result in changes in its mix of business each year, which can lead to volatility of earnings.

Secure liquidity level.

Centre's consolidated investment portfolio provides a secure level of available asset liquidity for transactions maturing within three years.

Modest financial leverage.

Centre's financial leverage, solely through preferred stock issuances by the operating company, is modest at 16.1 percent at year-end 2000.

Strong parental commitment. Centre is considered strategically important to Zurich Insurance Group. Centre is a centre of excellence for product development of alternative risk transfer within the group and is expected to be an area of top-line growth through product innovation.