[January 29,2002]

The UC Treasurer's Office has negotiated two new contracts for the Insurance Company Contract (ICC) Fund for 2002. The first contract, with Monumental Life Insurance Company, has a 5.58% guaranteed interest rate and has staggered maturities of December 2005 and December 2006. The second contract, with Principal Life Insurance Company, has a guaranteed rate of 5.75% and has staggered maturities of December 2006, December 2007, and December 2008.

Contributions invested in the ICC Fund during 2002 will be pooled with existing money in the Fund to produce a blending rate of return that reflects the average yield of all contracts in force. Assuming that 2002 deposits follow anticipated cash flow trends, the Fund should produce a net yield of 6.73% in 2002.

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

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