Penn Treaty Downgraded

January 15, 2001

The counterparty credit and FSRs on Penn Treaty Network America Insurance Co. were downgraded from “A-” to “BBB+” by S&P. Concurrently, the corporate credit and subordinated debt ratings on Penn Treaty American Corp. were lowered from “BBB-” to “BB+” and from “BB+” to “BB-,” respectively. The outlook is stable.