S&P Raises Real Legacy Assurance Co. Ratings to ‘BBB+’; Outlook Stable

April 8, 2005

Standard & Poor’s Ratings Services has raised its counterparty credit and financial strength ratings on Real Legacy Assurance Co. Inc. (RLA), formerly known as Royal & Sun Alliance Insurance (Puerto Rico) Inc., to ‘BBB+’ from ‘BBB’.

Standard & Poor’s also said that the outlook on RLA is stable.

“The ratings on RLA were raised because we now recognize RLA as
strategically important to its parent, Cooperativa de Seguros Multiples
de Puerto Rico (CSM),” said Standard & Poor’s credit analyst Polina
Chernyak. “In combination with CSM, RLA provides the business scope and breadth that CSM historically lacked.”

The ratings on RLA are based on the company’s strong capitalization,
strong operating results, and good market position. Partially offsetting
these positive factors are the company’s business-concentration risk,
heavy dependence on reinsurance, and modest size relative to
competitors as well as the increasingly difficult competitive environment in its core Puerto Rican market.

Standard & Poor’s expects RLA’s business position to remain good.
Premium growth is expected to be sound as the company utilizes its
affinity relationships with AARP and the National Teacher’s Association while taking advantage of increases in the primary rates for its commercial property and personal lines of business.

Offsetting these positive factors, Standard & Poor’s expects that company will be challenged in coming years by higher reinsurance costs.

The company’s business position is good and is supported by strong
business relationships and a solid ranking in its local markets. Endorsements by AARP and the National Teacher’s Association, along with marketing programs in both local and multinational banks in Puerto Rico, fortify the company’s standing.

In combination with its parent, CSM, the company is well entrenched in its local market.

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