Fitch Ratings-Chicago-20 December 2006: Fitch Ratings has affirmed its ratings on Pacific LifeCorp (PLC) and its affiliates, including Pacific Life Insurance Company. A full rating list is shown below. The Rating Outlook is Stable.

Today's rating action reflects the organization's strong balance sheet fundamentals, which include a high-quality asset portfolio and extensive liquidity supported by sound asset/liability management. In recent periods, the organization's financial leverage has favorably been in the low-to-mid teens and operating company NAIC risk-based capital ratios - adjusted for Fitch's internal variable annuity model - have been extremely strong.

PLC has reported improved earnings year-to-date in 2006 following strong performance in 2005. Net operating income - on a GAAP basis - for the life insurance, annuities and mutual funds, investment management and corporate operations, including Aviation Capital Group, are on pace in 2006 to generate nearly a 20% increase from the prior year.

Fitch's primary concerns for the company include increasing equity market exposure due to strong variable annuity sales, interest rate exposure, its ability to navigate through increased product sophistication, the need to manage reserve and capital requirements given changing regulatory requirements - particularly related to variable annuities and universal life - and the ability to continue successful execution in its larger aircraft leasing operation following a major acquisition last year.

Operating earnings are expected to maintain stability and a long-term upward trend. GAAP and Statutory earnings on an annual basis may fluctuate if there is material equity market volatility or credit losses, but the degree of volatility is expected to be less than or equal to other market participants.

Fitch also expects the life insurance operation's risk-based capital ratio to remain above 300% of the company action level after making adjustments for variable annuity risks. Further, financial leverage is expected to remain conservative, with debt-to-capital in the mid-teens. The organization is anticipated to remain a mutual holding-company structure, and any acquisitions are anticipated to be modest and aligned with current business strategies.

The following ratings are affirmed and the Rating Outlook remains Stable:
Pacific LifeCorp
 - Long-term Issuer Default Rating 'A+';
 - $600 million 6.6% senior notes due 2033 'A'.

Pacific Life Insurance Company
 - Long-term Issuer Default Rating 'AA-';
 - Insurer financial strength 'AA';
 - $150 million 7.9% surplus notes due 2023 'A+';
 - Commercial paper 'F1+'.

Pacific Life & Annuity Insurance Company
 - Insurer financial strength 'AA'.

Pacific Life Funding, LLC
 - Funding agreement-backed note program 'AA'.

Pacific Life Global Funding
 - Funding agreement-backed note program 'AA'.

Contact: Peter F. Patrino CFA, +1-312-368-3266 or Douglas L. Meyer CFA, +1-312-368-2061, Chicago.

Media Relations: Kenneth Reed, New York, Tel: +1 212-908-0540.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.