SUMMARY OF ACRONYMS INTRODUCTION 5 Background 5 Reliances and Limitations 5 Information considered 5 Regulatory and Professional Guidance 6

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1 Supplementary Report of the Independent Expert on the terms of the proposed Insurance Business Scheme for the transfer of to 11 Old Jewry London, EC2R 8DU United Kingdom Prepared by: JL McKenzie, FFA Tel +44 (0) Fax +44 (0) milliman.co.uk

2 TABLE OF CONTENTS SUMMARY OF ACRONYMS 3 1. INTRODUCTION 5 Background 5 Reliances and Limitations 5 Information considered 5 Regulatory and Professional Guidance 6 2. REVIEW AND ASSESSMENT Alico UK 7 7 ReAssure 10 Financial position after the Effective Date Market Events subsequent to 30 December Conclusion on the Security of Benefits 13 Benefit Expectations 13 Tax Clearances 14 Solvency II 14 Other Developments 14 Policyholder Responses CONCLUSION 16 2

3 SUMMARY OF ACRONYMS The following acronyms were defined in the Scheme Report and are used throughout this Supplementary Report. AFH Alico UK ARUK CEIOPS CGT CMP CRR ERP FSA Actuarial Function Holder Admin Re UK Committee of European Insurance and Occupational Pensions Supervisors Capital Gains Tax Capital Management Policy Capital Resources Requirement Equity Risk Premium Financial Services Authority (or any successor body) FSMA Financial Services and Markets Act 2000 HMRC ICA IGR LP LTICR MCR NMWPF NPF PRE PRP QIS 5 RCM RCR HM Revenue and Customs Individual Capital Assessment Intra Group Reinsurance Liquidity Premium Long Term Insurance Capital Requirement Minimum Capital Requirement National Mutual With-Profits Fund Non-Profit Fund Policyholders Reasonable Expectations Property Risk Premium Fifth quantitative impact survey (CEIOPS) Risk Capital Margin Resilience Capital Requirement ReAssure (Windsor Life Assurance Company prior to December 2011) SHF Shareholder Fund SUP18 FSA Handbook of Rules and Guidance, Supervision Manual, Section 18 TCF Treating Customers Fairly 3

4 UK US WPA WPF WPICC United Kingdom United States of America With-Profits Actuary With-Profits Fund With-Profits Insurance Capital Component 4

5 1. INTRODUCTION Background 1.1 I have been instructed by the UK branch of American Life Insurance Company ( Alico UK ) and ( ReAssure ), to report pursuant to Section 109 of FSMA in the capacity of Independent Expert on the terms of the scheme for the proposed transfer of parts of the insurance business of Alico UK to ReAssure. The Scheme Report dated 18 April 2012 sets out the matters which I had considered, and my conclusions on the effects of the Scheme. 1.2 In the Scheme Report, I indicated that I would prepare a Supplementary Report to consider any matters which may arise in the short term (prior to the final Court Hearing at which the Scheme may be approved) and which it may be helpful to draw to the attention of the Court. In the Scheme Report, I noted that I expected to consider the following points: Updated information with regard to the financial condition of the companies, in light of the completion of their year-end actuarial investigations for 2011 and incorporating the impact of any changes in financial conditions during 2012 (e.g. Eurozone developments); Further information with regard to the potential restructuring of ReAssure s WPF; Developments related to the implementation of Solvency II; Details of the review of the Respectability Capital and the Buffer Capital; The tax clearance on the status of the Alico UK with-profits policies after conversion; Policyholder responses regarding the Scheme; and, Any other material developments (e.g., significant transactions entered into by ReAssure) that have occurred since the date of the Scheme Report or were currently anticipated. 1.3 This Supplementary Report should be read in conjunction with the Scheme Report. Terms used in this Supplementary Report are as defined in the Scheme Report. Unless necessary to do so, I do not address matters relating to the Overseas Schemes separately in this Supplementary Report and include consideration of them within the context of the Scheme. Reliances and Limitations 1.4 Details of the scope of my appointment, my qualifications, disclosures and reliances and limitations are provided in the Scheme Report and are applicable and relevant for the consideration of this Supplementary Report. Information considered 1.5 In preparing this Supplementary Report, I have reviewed the following internal documents in addition to those described in the Scheme Report: The Supplementary Reports on the Scheme prepared by the AFHs of Alico UK and ReAssure; FSA Returns and related actuarial reports as at 30 November 2011 for Alico UK and 31 December 2011 for ReAssure (showing the respective Pillar 1 positions); Risk-based capital assessments ( Pillar 2 ) as at 30 November 2011 for Alico UK and 31 December 2011 for ReAssure; Estimated financial positions under the new Solvency II regime as at 30 November 2011 for Alico UK and 31 December 2011 for ReAssure; Analyses of exposures to Eurozone debt as at 29 February 2012 for Alico UK and as at 31 March 2012 for ReAssure; 5

6 Board papers related to the derivation of the Respectability Capital and the Buffer Capital for 2012 for ReAssure; and, Internal estimates of the Pillar 1 position as at 29 February 2012 for Alico UK and 30 April 2012 for ReAssure. Regulatory and Professional Guidance 1.6 In my opinion, the Supplementary Report complies with the Transformations TAS and is compliant with those elements of the Technical Actuarial Standards on Data, Modelling, Reporting and Insurance (TAS-D, TAS-M, TAS-R and the Insurance TAS, respectively) which are applicable to transformations. The Scheme Report is a component report to this Supplementary Report for the purposes of complying with these TAS. 6

7 2. REVIEW AND ASSESSMENT Alico UK Business In-force 2.1 Table 2.1 below summarises the in-force long-term business of Alico UK as at 30 November 2011 along with comparative figures given in the Scheme Report as at 30 November The table also splits the business between that which is intended to be transferred under the Scheme (the Transferring Policies ) and the business that is planned to remain in Alico UK after the Scheme (the Excluded Policies ). Table 2.2 further analyses the with-profits business contained in the Closed Book group shown in Table 2.1. Table 2.1: Alico UK Long-Term Business Breakdown No. of Contracts /Scheme Members 30 November November 2011 Annual Office Premium, Gross No. of Mathematical Contracts Reserve, /Scheme Members Annual Office Premium, Gross Mathematical Reserve, Transferring Policies Annuities 2, , Affluent 29,657-1, , Protection 228, , Closed Book 23, , Other items Excluded Policies Living Time 13, , PAX 43, , Employee Benefits 212, , Wealth Management 3, , , ,910.3 Bulk Annuities 2, , Other items 25.3 Sub Total (Transferring) 283, , , ,446.4 Sub Total (Excluded) 276, , , ,646.6 Total 560, , , ,093.0 Source : Scheme Report and Alico UK Supplementary Report Table 2.2: Alico UK With-Profits Product Breakdown No. of Contracts 30 November November 2011 Annual Office Premium, Mathematical Reserve, No. of Contracts Annual Office Premium, Mathematical Reserve, With-Profits Whole of Life Endowments 2, , Deferred Annuity Paid Up - Life Paid Up - Pensions 1, , Total 5, , Source: Scheme Report and Alico UK Supplementary Report 7

8 2.2 Table 2.3 provides a breakdown as at 30 November 2011 of the in-force general insurance business to be transferred under the Scheme along with comparative figures given in the Scheme Report as at 30 November (The significant reduction in the number of Living Time contracts shown in Table 2.1 has arisen from a change in the reporting basis used by Alico UK in completing its Annual Return to the FSA in On a comparable basis, the number of contracts would have been 7974 for 2010.) Table 2.3: Alico UK General Business Breakdown No. of Policies/ Members 30 November November 2011 Annual Office No. of Annual Office Premium, Reserve, Policies/ Members Premium, Reserve, Transferring Policies Direct Business 13, , Reinsurance Accepted 55, , Excluded Policies Group Protection 50, , Sub Total (Transferring) 69, , Sub Total (Excluded) 50, , Total 119, , Source: Scheme Report and Alico UK Supplementary Report 2.3 These tables demonstrate that, as expected, the liabilities in respect of the in-force business in Alico UK have declined over 2011 since Alico UK has effectively been closed to new business over that period. However, the composition of the business has not materially changed and therefore there are no new issues to be addressed. It is noted that, as was considered in the Scheme Report, the Wealth Management Business within the Excluded Business is expected to reduce significantly during July The potential reduction in the Wealth Management Business is not a relevant matter for this Supplementary Report but is considered further in the report for the transfer of this business to another MetLife entity. Financial Position 2.4 I have been provided with updated Pillar 1 and Pillar 2 solvency positions determined as at 30 November 2011 for Alico UK. A summary of the updated Pillar 1 position as at 30 November 2011 for Alico UK along with comparative pro forma figures given in the Scheme Report as at 31 May 2011 (which allowed for the effects of the reinsurance with ReAssure and the indemnity given to Alico UK) is shown in Table 2.4 below. 8

9 Table 2.4: Alico UK Pillar 1 Position 31 May November 2011 Pre-transfer Post-transfer Pre-transfer Post-transfer Admissible assets 5,121 3,532 4,932 3,488 Total liabilities 2,897 2,897 2,905 2,905 Deposit Back 1,590-1,444 - Total Capital Resources (A) Capital Resources Requirement (B) CRR Cover, (A)/(B) 470% 532% 408% 483% Repatriation Total Capital Resources (after repatriation) (C) CRR Cover, (C)/(B) 470% 532% 300% 355% Source: Scheme Report and Alico UK Supplementary Report 2.5 The CRR cover for Alico UK effectively decreased from 470% to 408% at 30 November 2011, after allowing for the reinsurance and indemnity. In addition, as noted in the Scheme Report, Alico UK repatriated $239 million to its home office in its current financial year, reducing the CRR cover to 300%. Whilst this represents a significant reduction in the solvency position, Alico UK remains in an extremely strong financial condition, well in excess of that required by its capital management policy. As noted in the Scheme Report, reductions in the level of cover may have been expected in the absence of the Scheme and therefore no long term reliance can be placed on the current level of cover. 2.6 I have also been provided with Alico UK s internal risk-based Pillar 2 figures which reveal that Alico UK satisfies its capital management policy on this measure and that, although some risk reduction has been undertaken during 2011, the composition of the risk drivers which influence Alico UK are not materially changed from noted in the Scheme Report. It is the Pillar 2 scenario that is the more onerous requirement for Alico UK. 9

10 ReAssure Financial Position 2.7 I have been provided with updated Pillar 1 and Pillar 2 solvency positions determined as at 31 December 2011 for ReAssure. A summary of the updated Pillar 1 position as at 31 December 2011 for ReAssure along with comparative figures given in the Scheme Report as at 30 June 2011 is shown in Table 2.5 below, both pre-transfer and post-transfer. Table 2.5: Reassure Pillar 1 Position (Including Alico UK Reinsurance) 30 June December 2011 SHF & NPF WPF NMWPF Total SHF & NPF WPF NMWPF Total million Total Capital Resources (A) ,742 1, ,967 Capital Resources Requirement LTICR WPICC Capital Resources Requirement (B) , ,152 CRR Cover, (A)/(B) 205% 674% 100% 145% 268% 668% 100% 171% Respectability Capital Buffer Capital Cover for CMP 133% 674% 100% 122% 191% 668% 100% 149% Source: FSA Returns & ReAssure Information 2.8 The figures shown as at June 2011 in the above table were prepared on a pro forma basis reflecting a large number of transactions (including the reinsurance of the Alico UK business to be transferred under the Scheme) and financial re-organisation of ReAssure s business. The figures shown as at December 2011 demonstrate the actual consolidated position. The CRR cover for ReAssure increased from an estimated 145% at June 2011 to 171% at 31 December Part of the cover for the CRR is provided by the Respectability Capital and the Buffer Capital which ReAssure is required to maintain as a result of the undertakings it has given to the FSA but it can be seen from Table 2.5 that ReAssure held capital in addition to the amount required by this commitment (by 122% at June 2011 and 149% as at December 2011). Taking the same approach as adopted in the Scheme Report (i.e., considering the cover for the NPF when the with-profits funds are excluded), Table 2.5 shows that the CRR cover for the NPF business in isolation increased from an estimated 205% to 268% as at 31 December I have considered the annual review of the Respectability Capital and Buffer Capital which ReAssure has undertaken. The Respectability Capital has been determined on a basis broadly consistent with previous years. The reduction from 180 million to 130 million has primarily been due to the effect of the increase in surplus expected to arise in the NPF in 2012 as a result of the financial re-organisation undertaken in 2011 and completion of the Part VII transfer of the Barclays Life business in The Buffer Capital has remained unchanged at 40 million Whilst the impact of the change in the Respectability Capital has been to reduce the overall capital which ReAssure needs to hold on a Pillar 1 basis, I do consider that this has been due solely to the changed business circumstances of ReAssure and does not represent a weakening of the capital position Since the year end, a number of other events have occurred which have changed the financial position of ReAssure. These consist of: the completion of the transaction to buy out the policyholders interest in the Defined Book in the WPF (which has resulted in 55 million being transferred into the WPF from the NPF); 10

11 a release of 23 million, shared equally between the NMWPF, WPF and SHF in respect of financial synergies which have been identified; dividends of 453 million paid in March and April 2012 to shareholders from the SHF (the amount of the dividends having had due regard to ReAssure s capital management policy); the completion, on 24 May 2012, of the significant new business transaction described in the Scheme Report. The terms of the transaction were such that there was a strain of 1 million on a Pillar 1 basis and a minor net strain on a Pillar 2 basis. The transaction has been funded in part by the use of an intra-group reinsurance arrangement with Swiss Re, ReAssure s ultimate parent; a reduction in the market risk of the WPF by reducing the proportion of the with-profits assets invested in equities and property to 40% of the relevant assets; and, a planned reduction in the credit risk exposure by switching fixed interest investments into higher quality assets (resulting in a 20 million reduction in the available financial resources) The effect of all of these post-balance sheet events has been to reduce ReAssure s CRR cover from 171%, as shown above, to 130% (although neither case reflects the fact that the withprofits funds contain risk absorbing capital which may be used within those funds and so slightly understates the position). The effect on the CRR cover for the NPF when considered in isolation has been to reduce it to 144% (from 268% as shown in Table 2.5) but this does not reflect the value which the NPF will derive from the asset which it has effectively acquired from the WPF in the future profits from the Defined Book I have considered the updated Pillar 2 capital requirements for ReAssure as at 31 December The absolute contribution from each of the components to the risk capital charge has increased following the recapture of the three IGR arrangements and the completion of the Barclays Life transfer to ReAssure. Overall, the relative contributions from these risk drivers are not materially changed from those shown in the Scheme Report and ReAssure has remained well capitalised on a Pillar 2 basis. The Pillar 1 capital requirements (when the Respectability Capital and Buffer Capital are included) continued to be more onerous than those under the Pillar 2 basis for ReAssure I have been provided with updated information on the purchase of the remaining portion of the Defined Book by the NPF referred to in As noted in the Scheme Report, it is beyond the scope of my review to consider the terms of the purchase but it is within my remit to consider whether the transaction, having occurred, alters the balance of risk to which Alico UK Transferring Policies will be exposed. In practice, the purchase of the Defined Book acts to remove some risks to which the with-profits policyholders of the WPF were exposed and transfers these directly to the NPF. The impact on the NPF on a standalone basis is minor and the overall effect on ReAssure is neutral. Financial Position after the Effective Date 2.15 I have considered the financial position of each of the groups of policyholders after the Effective Date The financial position of ReAssure will remain unchanged once the Scheme has been implemented, (as discussed in 2.12, on a pro forma basis, after allowing for the changes made in 2012, CRR coverage of 130% would have applied) Since the with-profits funds contain further capital which is not allowed for in the CRR cover ratios, I have considered the cover provided for the Transferring Business by the capital available in the SHF and NPF to which this business will be allocated. The CRR for the NPF on a standalone basis would have been 268% at 31 December 2011 but 144% currently, and, in each case, would have been in line with ReAssure s Capital Management Policy In the light of the updated financial information available from ReAssure s Pillar 2 assessment, the post-balance sheet actions noted in 2.11 above and the recent and ongoing economic 11

12 uncertainty, I have re-considered the validity of using the financial position of the NPF on a standalone basis as a benchmark for assessing the security of the Transferring Policies after the Effective Date. Re-consideration of this matter in practice requires me to review principally whether the risks arising from the WPF and NMWPF (in the context of the interactions with, and support arrangements from, the NPF) would materially affect the surplus position of the NPF. I have concluded that the management actions available to ReAssure in respect of the WPF and the NMWPF provide sufficient leeway so that the risk of a material call being made on the NPF assets as a result of stresses in these funds is not significantly altered. Consequently, I believe that it remains appropriate to use the reference point of the NPF on a standalone basis, 2.19 Although ReAssure is likely to have a lower CRR cover in the future than applies in Alico UK currently, as I noted in the Scheme Report, Alico UK is likely to employ a lower target in the absence of the Scheme. Since I consider the capital position of ReAssure to be satisfactory, particularly since the risk-based capital assessment is less onerous for ReAssure than the regulatory basis, I believe that my conclusions on the security of the Transferring Policies as a result of the implementation of the Scheme remain valid The existing ReAssure policies are currently exposed to the risks related to the Transferring Policies since these are reinsured to ReAssure. However, it is necessary to consider whether the change in the status of the Transferring Policies (from reinsured business to policies effectively issued by ReAssure) introduces any further risks to the existing ReAssure policies. Table 2.6 shows the financial position of the NPF including and excluding the Alico UK reinsurance. This shows that there was little difference between the two scenarios at either of the dates considered and that security would have been broadly unchanged by the implementation of the Scheme. In the light of the updated information, I believe that my conclusion in the Scheme Report regarding the security of ReAssure s policies remains valid. Table 2.6: Reassure NPF Pillar 1 Position Pre and Post Alico UK Reinsurance NPF pre TRANSFER 30 June December 2011 NPF POST TRANSFER NPF pre TRANSFER NPF POST TRANSFER Total Capital Resources (A) ,128 1,128 Capital Resources Requirement (B) CRR Cover, (A)/(B) 219% 205% 294% 268% Post Balance Sheet Events Post Balance Sheet Events Cover 219% 205% 158% 144% Respectability Capital Buffer Capital CMP Cover 136% 133% 109% 103% Source: FSA Returns & ReAssure Information 2.21 I also considered the security of the Excluded Policies which will remain with Alico UK after the Effective Date (until the implementation of the scheme to transfer these policies to other MetLife entities). Since no assets in excess of the value of liabilities are being transferred to ReAssure with the Transferring Policies (as can be seen from the post-transfer columns of Table 2.4), the security of the Excluded Policies will improve even in the absence of the further transfer of business (which is not considered further in this Supplementary Report but which is addressed in the supplementary report which has been prepared in relation to that scheme). Consequently, I believe that my conclusion remains valid. Market Events subsequent to 31 December During the first quarter of 2012 there has been considerable market turbulence globally. In the UK, the FTSE 100 index fell in excess of 5% in May 2012, market volatility remained high, credit spreads on corporate bonds narrowed and gilt yields fell slightly at most durations. The 12

13 continuing uncertainty may lead to volatility in economic conditions and in financial markets in general for some time, particularly in the Eurozone I have considered both Alico UK s and ReAssure s exposure to Euro denominated debt issued in the Eurozone economies. As at 31 March 2012, both companies had relatively low exposure to sovereign debt issued in the weaker Eurozone countries. In addition, the relative Eurozone exposures in the Transferring Business and in ReAssure are broadly similar and, as a result, I do not consider that the risks to either group from this source will be enhanced as a result of the Scheme being implemented In the event that there is wider economic stress following a break-up of the Eurozone, circumstances will be challenging for all financial institutions since they will be operating in untested conditions. However, I have no reason to believe that the outcome of such an event will be more extreme than ReAssure s risk based assessment under the Pillar 2 capital procedures. Conclusion on the Security of Benefits 2.25 In my opinion, my conclusions as set out in the Scheme Report on the security of the benefits of Transferring Policies, ReAssure s Policies and Excluded Polices remain valid. Benefit expectations 2.26 I concluded in the Scheme Report that, generally, the Scheme did not affect the way in which benefits under policies would be determined and that benefit expectations would not be altered. However, the terms of the conversion of the with-profits business to non-profit require review The indicative rates of annual and final guaranteed increases (the original calculation ) provided within the policyholder communications were calculated using policy and market data as at 31 August There has been great uncertainty and volatility within financial market conditions since this date, particularly in the third quarter of 2011 and the second quarter of The review of the conversion considers two components; the impact of the financial market conditions on the rates of annual and final increases and the resulting impact on the cost to shareholders of the conversion The conversion terms were derived using estimates of the long term investment expectations and were not derived from short term conditions. However, since elements of the calculations are derived from current conditions I have considered the interactions between these long and short term views to assess the continuing fairness and appropriateness of the basis to the Alico UK with-profits policyholders In order to assess the potential movement in the level of guaranteed increase, I have considered the change in each key assumption within the calculation since 31 August 2011: Aggregate Asset Shares: Aggregate asset shares were 6% (before tax) higher at 31 May 2012 compared to 31 August 2011, mostly due to reduced yields increasing the market values of bonds. This increase in asset share values will be offset in the calculation by the lower future investment return assumptions expected due to the lower risk-free rates; Risk Free Rates: the UK gilt yield indices have fallen approximately bps at 5, 10, 15 and 20 year durations. Taken in isolation this may decrease the rates of annual and final guaranteed increases from those illustrated to policyholders; and, Risk Premium: both the equity risk premium and property risk premium have increased due to the reduction in the level of the risk free rate detailed above. The liquidity premium has also risen as credit spreads have widened since 31 August Therefore, the average risk premium has increased by around 24bps from 76bps to 100bps, though the actual level of increase will vary by term. This will increase the gross investment return assumptions in the determination of the guaranteed increases and partially offset the movement in risk free rates. 13

14 2.31 The cost to shareholders of the conversion was determined to be 3.0million based upon the calculations using policy and market data as at 31 August Both the level of the risk premium and the level of assumed asset share volatility are key assumptions that impact the cost of the conversion to shareholders. As noted above, the risk premium has increased by around 32% since 31 August 2011 which may be expected to increase the cost to shareholders. However, over the same period, swaption implied volatilities have increased by around 30% (with equity implied volatilities remaining broadly unchanged) and this could be expected to offset the increase from the change in the level of the risk premium. Overall, it would be expected that the conversion basis as it would be applied in current conditions would result in a similar financial outcome for the shareholder Taking the above into consideration, I believe that the method and basis used to convert the with-profits business to non-profit remains fair to Alico UK s with-profits policyholders. Therefore, my conclusions set out in the Scheme Report remain valid Whilst I believe that the basis remains fair, I note that this does not mean that the illustrative guaranteed increases which were provided to policyholders as part of the policyholder communication will not change since these are determined having regard to the risk free rate and the starting level of the individual asset shares. However, I would not expect there to be significant changes to the payouts derived I also noted in the Scheme Report, that the unit pricing assumptions for Alico UK s internal linked funds had been affected by the closure of Alico UK to new business and that the pricing change was being implemented currently. This is independent of the implementation of the Scheme but has been considered since the completion of the pricing change process may continue beyond the Effective Date, although I have been informed that this is unlikely to be the case. I concluded in the Scheme Report that the implementation of the Scheme will not affect this pricing change and I believe that my conclusion remains valid. Tax Clearances 2.35 I have been provided with the appropriate tax clearances from HMRC stating that there will be no adverse impact on the with-profits policyholders as a consequence of the conversion to nonprofits policyholders. Solvency II 2.36 I have also been provided with information in respect of the estimated solvency position for both Alico UK and ReAssure upon the implementation of Solvency II based on data and economic assumptions as at 30 November 2011 for Alico UK, and as at 31 December 2011 for ReAssure. ReAssure has also provided estimates of the results produced from its Solvency II internal model, which is in development. The information provided suggests that ReAssure would have been able to satisfy its capital requirements under Solvency II post-transfer as at 31 December 2011, although the dividend payments made in 2012 would have reduced the level of cover available. However, as noted in the Scheme Report, the final specification of Solvency II has not yet been completed and the possibility remains that the solvency position of ReAssure could be different under the new regime from that revealed in these estimates (as could the solvency position of Alico UK). In particular, I note that ReAssure may require a capital injection in the event that Solvency II is not finalised in line with the specification assumed in its estimates and its internal model is not approved. I understand that ReAssure (and its parent) are aware of this possibility I have been informed that ReAssure remains satisfactorily on plan to implement Solvency II, including the necessary allowance for the Alico UK Transferring Business. Other Developments 2.38 I have been informed by ReAssure that, in line with its normal business activities, it is considering new opportunities relating to the insurance or reinsurance of blocks of business. If any such deal proceeds, it will be the subject of the governance oversight procedures described in the Scheme Report, including those relating to the provision of capital. 14

15 2.39 At the date of this Supplementary Report, I have not been informed of any other material developments within Alico UK or ReAssure that may influence my conclusions set out in the Scheme Report. The matter discussed in the preceding paragraph does not cause me to reconsider my conclusions in the Scheme Report. Policyholder Responses 2.40 I have been provided with a summary of the responses which have been received from policyholders both by telephone and in writing. Where I have considered it appropriate, I have reviewed the letter received from the policyholder and the response sent by Alico UK and ReAssure. I have considered the nature of the responses received and whether they raise any issues which I had not addressed in my Scheme Report but which require comment I do not consider that any of the policyholder responses require me to reconsider my conclusions as set out in the Scheme Report. 15

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