from A.M. Best.

The score applies to Annuity & Life Reassurance Ltd., the wholly owned subsidiary of Annuity & Life Re (Holdings) Ltd., which has been up and running for a year.

The rating reflects the company's progression in implementing its business plan, superior capitalisation, financial flexibility and conservative approach to underwriting.

The status was also awarded, according to A.M. Best, because of the management team's experience and ability to leverage relationships with prominent life insurance and annuity writers by providing customised packages.

But according to A.M. Best these favourable attributes are offset by "the uncertainties associated with a young company and the challenges facing all companies in the competitive and consolidating reinsurance market.'' The company received its Best's rating last year, following the completion of the parent company's equity offering, which raised approximately $354 million in capital.

The proceeds have provided considerable financial strength and flexibility to the organisation. A.M. Best expects the company to remain free of debt for the near term and to maintain risk-adjustment capital of at least 250 percent of the National Association of Insurance Commissioners' action level.

The company's plan is to concentrate on two lines of business -- life reinsurance and annuity reinsurance. Life reinsurance focuses primarily on the mortality risk inherent in term, whole and universal life insurance, and annuity reinsurance addresses interest rate risks under fixed annuities.