On Aug. 23, 2007, Standard&Poor's Ratings Services affirmed its 'A' insurer financial strength and counterparty credit ratings on Cathay Life Insurance Co. Ltd. (Cathay Life). The outlook is stable. The ratings reflect Cathay Life's strong business franchise and market position, satisfactory operating performance, adequate capitalization, and good liquidity. However, due to its superior credit characteristics within the Cathay Financial Holding Co. Ltd. (Cathay FHC; A-/Stable/A-2) group, Cathay Life may be required to provide resources, either on a regular basis or in unexpected circumstances, to weaker group members. A legacy negative spread burden is another factor constraining the ratings. Cathay Life is the core subsidiary and main earnings contributor of the Cathay FHC group. Cathay Life accounted for 63%
