In these unsettled economic times, it is important for you to know that American Fidelity Assurance Company remains well-positioned because of our longstanding conservative investment approach. We have always believed a conservative approach serves the best long-term interest of our claimants, policyholders and Colleagues. Most importantly, it ensures we are able to fulfill our responsibilities, something we take very seriously. Our approach has proven more true than ever the past few weeks.

More than 99.5% (as of the latest valuation date) of American Fidelity's fixed income securities are investment grade. These investments are broadly and strategically invested primarily in high-quality United States Government instruments and investment grade public utilities and corporations. American Fidelity has never had any direct investment exposure to the subprime lending market. Our geographically dispersed mortgage loan portfolio is mainly composed of commercial mortgages secured by medical offices, industrial complexes, corporate offices and retail facilities.

While nobody can accurately forecast where the economy will be in the coming months at this moment, many economists predict it will remain fragile well into next year. At American Fidelity we will continue to practice discipline in our investment practices because we believe this is the smartest way to make sure we remain financially well positioned to protect our claimants, policyholders and Colleagues.

Lastly, we consider it a privilege to serve you and we thank you for your business and confidence in us.