A.M. Best Co. has downgraded the financial strength ratings to C+ (Marginal) from B- (Fair) of Annuity and Life Re Holdings' life insurance subsidiaries, Annuity and Life Reassurance, Ltd. (both of Bermuda) and Annuity & Life Reassurance America, Inc. (Connecticut), and removed them from under review.

The outlook for the ratings is stable.

These rating actions reflect the continuing deterioration of the company's capital base, and the ongoing concern about the company's ability to meet its collateral obligations, as plans to raise additional capital have not succeeded.

The ratings also incorporate Annuity & Life's expectations for additional losses in the second quarter of 2003 from the company's efforts to restructure its balance sheet through the recapture, retrocession, novation or sale of its in-force business to meet or reduce collateral obligations.