[February 4, 2000]

The UC Treasurer's Office has negotiated two new contracts for the Insurance Company Contract (ICC) Fund for 2000. The first contract, with Monumental Life Insurance Company, has a 7.36% guaranteed interest rate and has staggered maturities of December 2004 and December 2005. The second contract, with The Travelers Insurance Company, has a guaranteed rate of 7.16% and matures in January 2003.

Contributions invested in the ICC Fund in 2000 will be pooled with existing money in the Fund to produce a blended rate of return that reflects the average yield of all the contracts in force. Assuming that deposits to the Fund in 2000 follow anticpated cash flow trends, the Fund should produce a net yield of 6.92% in 2000.

Both insurance companies are rated A+ by A.M. Best and Company, based on financial condition and operating performance.

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