About New York Life: Built for Times Like These

A Time of Upheaval … but Not for New York Life

Since the emergence of the subprime market collapse more than a year ago, the financial markets have been extraordinarily turbulent. The government takeover of the giant mortgage lenders Fannie Mae and Freddie Mac, the acquisitions of Bear Stearns and Merrill Lynch, the bankruptcy of Lehman Brothers, the federal government’s loan to AIG, the conversion of the last two independent investment banks into bank holding companies, and the $700-billion rescue of the financial sector all have combined to fundamentally reshape the financial services industry to a degree not seen since FDR’s New Deal.

So what's new at New York Life?

Nothing.

Our remarkable resilience amid turbulent times is nothing new. For more than 160 years, New York Life has kept promises to policyholders, no matter what the situation — through the yellow fever epidemics of the 19th century, the Civil War, the Great Depression, and the aftermath of recent tragedies, such as 9/11 and Hurricane Katrina.

As the nation’s oldest and largest mutual life insurance company, we remain the premier provider of long-term insurance guarantees — backed by the highest possible credit ratings, billions of dollars of surplus more than needed to be confident we can meet our obligations to policyholders, and a well-diversified, conservative investment portfolio that includes very little exposure to the problem areas in today’s market.

In good times and in bad, three key factors set New York Life apart:

Our mutual form of ownership, which keeps us uniquely aligned with our policyholders
Our unquestionable financial strength, which backs the long-term promises we make; and
Our disciplined and conservative investment approach, which makes our financial strength possible

As President and CEO Ted Mathas said recently, "We were built for times like these."

Built for Times Like These: A Video Message from President and CEO Ted Mathas

I'm pleased to report that New York Life's strength remains solid. Our company was built for times like these. For those who want to read the transcript of this message, please click here.

Our Mutual Advantage

As a mutual insurance company, we serve only one audience: our policyholders.

Publicly traded life insurance companies face a constant trade-off between policyholders and shareholders. In contrast, every dollar of value we create goes to benefit our policyholders, now and in the future.

Perhaps the most important benefit of mutuality for our policyholders is that it allows us to keep a long-term perspective in all our decision-making. This is crucial when we are making promises we will be keeping 20, 30, or 40 years into the future.

And our independence from the demands of outside investors and Wall Street analysts means that we have the freedom to walk away from investments or sales practices that offer potentially strong near-term returns but may not be in our policyholders’ longterm best interests. Because of our mutuality, New York Life has a long history of taking contrarian stands that have proved to be very sound decisions.

When times are good, publicly traded and mutual life insurers generally both perform well. But when times are bad, the benefits of mutuality shine clearly. And today is no exception.

A Foundation of Financial Strength

Financial strength is the core value upon which New York Life was built, and it’s at the heart of our continued stability, no matter what the market conditions.

Mission Statement

Our mission is provide financial security and peace of mind through our insurance, annuity and investment products and services.
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By continuing to be a mutual company, we are uniquely aligned with our customers.
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By maintaining superior mutual strength, we protect their future.
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By acting with integrity and humanity, we earn their trust and loyalty.
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Every decision we make, every action we take has one overriding purpose: to be here when our customers need us. That's why we call ourselves The Company You Keep.®

New York Life currently enjoys the highest possible financial strength ratings — with a stable ratings outlook — from all four major ratings agencies:

Moody's (Financial Strength): Moody's Insurance Financial Strength Ratings are opinions of the ability of insurance companies to repay punctually senior policyholder claims and obligations.
Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., provides independent financial information, analytical services, and credit ratings to the world’s financial markets. For more information on Standard & Poor’s, visit http://www.standardandpoors.com.
Fitch Ratings (Insurer Financial Strength): Fitch Ratings’ Insurer Financial Strength rating provides an assessment of the financial strength of an insurance organization and its capacity to meet senior obligations to policyholders and contract holders on a timely basis.
A.M. Best (Financial Strength): A Best's Financial Strength Rating is an opinion of an insurer's ability to meet its obligations to policyholders.

In reaffirming our AAA rating in August 2008, S&P wrote: "The insurer financial strength ratings on New York Life Insurance Co. and New York Life Insurance & Annuity Corp. (collectively, NYL) reflect NYL's superior brand and competitive positioning in individual life and annuities. The ratings also reflect the exceptional quality of the company's career agency force, its extremely strong risk-based capital position, its strong operating earnings, and its growing presence in international markets. Standard & Poor's Rating Services considers NYL to be one of the most respected names in the domestic life insurance business, characterized by a commitment to mutuality and its policyholders."¹

Underpinning our industry-leading financial strength ratings is our surplus (the funds that provide added safety and security for our policyholders) — again, among the strongest in the industry.

Because we are a mutual company, with only one audience to serve, we are able to supplement our capital with an additional amount big enough to withstand a major catastrophic event, such as the influenza epidemic of 1918. This “risk cushion” enhances our ability to withstand current and future challenges. And above and beyond this cushion, we have billions of dollars more to fund ongoing growth initiatives and to continue to return value to our policyholders, both today and in the future.

Our Investment Philosophy — "Confidently Humble"

New York Life’s investment management team has long ascribed to a proven, conservative discipline in managing our more than $150-billion portfolio². As S&P noted in its recent affirmation of our AAA rating, at New York Life, “Credit risk management follows a robust set of guidelines.”¹ We don’t try to predict which way the market will move. We do our own fundamental, bottom-up research, rather than relying on credit ratings. We invest for the long term, because we make long-term commitments to our policyholders. We maintain diversification and ample liquidity. And we ensure that the potential returns offered by the securities we invest in significantly exceed the risk of these investments.

It is that insistence on getting paid for taking risk that drove a strategic reallocation of some of our investments in February 2007 — a move we refer to as a “quality tilt.” More than a year before the current credit crisis emerged, New York Life’s investment management team, led by Vice Chairman and Chief Investment Officer Gary Wendlandt, began closely monitoring what they believed to be an unfavorable market environment. Observing a trend toward weaker underwriting standards for all forms of debt, as well as investment returns that were not commensurate with the risk, they recommended a strategy that called for temporarily allocating a larger portion of the company’s investments into safe U.S. Treasury bonds.²

The benefits of this rigorous investment discipline are extremely apparent today. New York Life currently maintains the most diversified investment portfolio among all major life insurers, with our 10 largest credit exposures accounting for only 3.3% of our total credit risk.

Such diversification requires significant discipline. “New York Life’s strong operating results over the past decade have meant a continual inflow of money to be invested. Even at the peak of the market, we would not take a significant stake in any single name, no matter how attractive it appeared, because we know there’s always a risk we could get it wrong,” says Gary Wendlandt. “We’re confidently humble in our investing approach.”

What Lies Ahead

As the events of the past weeks have made clear, we are in the middle of a fundamental reshaping of the financial sector — a transformation more dramatic than anything seen in generations. But amid this storm, it’s business as usual at New York Life. In good times and in bad, our core values of financial strength, humanity and integrity continue to stand us — and, more important, our policyholders — in very good stead. Our mutuality allows us to keep a steady hand at the wheel, maintaining a long-term view and avoiding the temptations of chasing short-term gains. And our commitment to maintaining the industry’s #1 team of well-trained professional agents means you have a valued partner to help guide you through these uncharted waters.

Join the New York Life Family
New York Life has been the insurer of choice for Americans from every walk of life for seven generations—from little leaguers to baseball legends, from small business owners to captains of industry, scientists to socialites, homemakers to entertainers.

That's why we remain The Company You Keep.^®

¹Note: “New York Life” as used throughout this document can refer either separately to the parent company. New York Life Insurance Company(“NYLIC”), or collectively to the parent company and its domestic insurance subsidiaries, including New York Life Insurance and Annuity Corporation (“NYLIAC”).
Standard & Poor’s Corporate Ratings, New York Life Insurance Co. and New York Life Insurance and Annuity Corp., August 28, 2008
²Our investment portfolio totaled $151,374 million as of June 30, 2008 (including $48,948 million invested asserts of NYLIAC). As of June 30, 2008: Total assets equaled $181,130 million (including $74,570 million total assets of NYLIAC). Total liabilities equaled $169,320 million (including $71,919 million total liabilities of NYLIAC). Statutory Capital, which includes statutory surplus was $11,810 million, including $2,652 million of NYLIAC’s statutory surplus. AVR for New York Life and NYLIAC was $1,982 million and $495 million, respectively.)
³To learn more about our investment philosophy and the “quality tilt” strategy of 2007, read our “2007 Report to Policyholders: Strength and Safety for Uncertain Times,” available on www.newyorklife.com.