The 'A+' long-term insurer financial strength and counterparty credit ratings on Cathay Life Insurance Co. Ltd. (Cathay Life) were affirmed on July 8, 2003. The outlook on the counterparty credit rating is stable. The ratings reflect Cathay Life's dominant market position, good operating performance, and strong liquidity and financial flexibility. These factors are partially offset by pressure on the company's earnings as a result of strong competition and negative spreads. Cathay Life is a wholly owned subsidiary of Cathay Financial Holding Co. Ltd. (BBB+/Stable/A-2), which was set up in December 2001. Cathay Life is the flagship of the group and the main earnings contributor. Cathay Life has the leading market position in Taiwan's life insurance market. In 2002, the company
