Commercial Union Life Assurance Company Limited

Transcription

1 Commercial Union Life Assurance Limited Registered office: St Helen s, 1 Undershaft, London, EC3P 3DQ Annual FSA Insurance Returns for the year ended 31st December 2002 Accounts and statements pursuant to the Financial Services and Markets Act 2000 FN

2 Returns under the Accounts and Statements Rules Index to Appendices 9.1, 9.3, 9.4 and 9.6 of IPRU (INS) Global Business Financial year ended 31st December 2002 Contents Forms Page IPRU (INS) Appendix Statement of solvency 1 9A Analysis of effect of financial engineering on long-term available assets 2 10 Statement of net assets 3 13 Analysis of admissible assets 4 14 Long-term insurance business liabilities and margins Analysis of derivative contracts 16 IPRU (INS) Appendix Revenue account Analysis of premiums and expenses Analysis of claims 24 IPRU (INS) Appendix 9.4 Valuation report Life fund 27 Valuation report Permanent Health fund Long term insurance business : Summary of changes in ordinary long term business Long term insurance business : Analysis of new ordinary long term business Expected income from admissible assets not held to match liabilities in respect of linked benefits 49 Analysis of admissible fixed interest and variable interest and variable yield securities not held to match liabilities in respect of linked benefits 51 Valuation summary of non-linked contracts (other than accumulating with-profit policies) Valuation summary of accumulating with-profit policies Valuation summary of property linked contracts Valuation summary of index linked contracts Analysis of units in internal linked funds and direct holdings of assets matching liabilities in respect of property-linked benefits 56 Analysis of assets and liabilities matching investment liabilities In respect of index linked benefits Matching rectangle Valuation result and distribution of surplus 139

3 Returns under the Accounts and Statements Rules Index to Appendices 9.1, 9.3, 9.4 and 9.6 of IPRU (INS) Global Business Financial year ended 31st December 2002 Forms Page Supplementary notes 143 IPRU (INS) 9.29, 9.30 and 9.36 Statement on derivatives required by IPRU (INS) Statement on controllers required by IPRU (INS) Statement of information on appointed actuary required by IPRU (INS) Certificates by the directors and actuary and report of the auditors IPRU (INS) Appendix 9.6 Certificate by the directors required by IPRU (INS) 9.34(a) 153 Certificate by the appointed actuary required by IPRU (INS) 9.34(b) 155 Report of the auditors to the directors pursuant to IPRU (INS)

4 Returns under the Accounts and Statements Rules Covering page to form 9 Financial year ended 31st December GN WITHERS Chief Executive... J A NEWMAN Director... M N URMSTON Director 26 th March 2003

5 :10:30:00 Form 9 Statement of solvency Financial year ended 31st December 2002 registration Period ended number GL/UK/CM day month year Units R GL As at the end of this financial year As at the end of the previous year Source GENERAL INSURANCE BUSINESS Available assets 1 2 < >? Other than long term insurance business assets allocated See instructions towards general insurance business required minimum margin 11 1 and 2 Required minimum margin Required minimum margin for general insurance business Excess (deficiency) of available assets over the required minimum margin (11-12) LONG TERM INSURANCE BUSINESS Available assets 13 Long term insurance business admissible assets Other than long term insurance business assets allocated towards long See instructions term insurance business required minimum margin and Total mathematical reserves (after distribution of surplus) See instruction Other insurance and non-insurance liabilities See instruction 5 Available assets for long term insurance business required minimum margin ( ) Implicit Items admitted under Rule 2.10(5) as modified Future profits Zillmerising Hidden reserves Total of available assets and implicit items ( ) Required minimum margin Required minimum margin for long term insurance business Explicit required minimum margin (1/6 x 41, or minimum guarantee fund if greater) Excess (deficiency) of available assets over explicit required minimum margin (25-42) Excess (deficiency) of available assets and implicit items over the required minimum margin (34-41) CONTINGENT LIABILITIES Quantifiable contingent liabilities in respect of other than long term insurance business as shown in a supplementary note to Form 15 Quantifiable contingent liabilities in respect of long term insurance business as shown in a supplementary note to Form See instruction 6 52 See instruction 6

6 :10:30:00 Form 9A Analysis of the effect of financial engineering on long-term available assets Financial year ended 31st December 2002 registration Period ended number GL/UK/CM day month year Units R9A GL As at the end of As at the end of this financial the previous Source year year 1 2 Required minimum margin for long term insurance business See instruction 2 Excess (deficiency) of available assets and implicit items over the required minimum margin See instruction 3 Total available assets and implicit items (11+12) Analysed as follows: Value of implicit items See instruction 5 Financial reinsurance- ceded 15 See instruction 6 Financial reinsurance- accepted See instruction 7 Outstanding contingent loans 17 See instruction 8 Any other charges on future profits 18 See instruction 9 Sum of financial engineering adjustments ( ) Other assets (13-19) Total available assets and implicit items (19+20)

7 :10:30:00 Form 10 Statement of net assets Financial year ended 31st December 2002 registration number GL/UK/CM Period ended day month year Units R GL As at the end of As at the end of Source this financial the previous year year 1 2 < >? Long term insurance business - admissible assets Long term insurance business - liabilities and margins Other than Long term insurance business - admissible assets Other than Long term insurance business - liabilities Net admissible assets (21-22) 23 Other assets allowed to Unpaid amounts (including share premium) on partly paid 24 be taken into account in shares covering the required Supplementary contributions minimum margin for a mutual carrying on general insurance business 25 Liabilities allowed to be Subordinated loan capital 26 left out of account in covering the required Cumulative preference share minimum margin 27 capital Available assets (23 to 27) 29 Represented by: Paid up share capital (other than cumulative preference share capital) Amounts included in lines 24 to 27 above Amounts representing the balance of net assets Total (51 to 56) and equal to line 29 above Movement of balance of net assets for solvency purposes - as per line 56 Balance brought forward at the beginning of the financial year Retained profit/(loss) for the financial year Movement in asset valuation differences Decrease/(increase) in the provision for adverse changes Other movements (particulars to be specified by way of supplementary note) Balance carried forward at the end of the financial year (61 to 65) See instruction 2 64 See instruction

8 Analysis of admissible assets :10:30:00 Form 13 (Sheet 1) Financial year ended 31st December 2002 Category of assets Total long term insurance business assets Category registration Period ended of number GL/UK/CM Units day month year assets R GL As at the end of As at the end of this financial the previous Investments year year 1 2 Land and buildings UK insurance business dependants Shares Debt securities issued by, and loans to, dependants Other insurance dependants Shares Debt securities issued by, and loans to, dependants Investments in group undertakings and participating interests Non-insurance dependants Shares Debt securities issued by, and loans to, dependants Shares 27 Total sheet 1 (11 to 30) Other group Debt securities issued by, and loans to, group undertakings 28 undertakings and participating interests Participating interests Debt securities issued by, and loans to, undertakings in 30 which the insurer has a participating interest

9 :10:30:00 Analysis of admissible assets Form 13 (Sheet 2) Financial year ended 31st December 2002 Category of assets Total long term insurance business assets registration number GL/UK/CM Period ended day month year Units Category of assets R GL Investments (continued) Deposits with ceding undertakings Assets held to cover linked liabilities Equity shares 41 As at the end of As at the end of this financial the previous year year Other shares and other variable yield securities 42 Holdings in collective investment schemes Rights under derivative contracts Other financial investments Fixed interest Debt securities and other fixed income securities Variable interest Participation in investment pools Approved securities Other Approved securities Other Loans secured by mortgages Loans to public or local authorities and nationalised industries or undertakings Loans secured by policies of insurance issued by the Other loans company Other Deposits with Withdrawal subject to a time restriction of one month or less approved credit institutions and approved financial institutions Withdrawal subject to a time restriction of more than one month 55 Other 56 Deposits with ceding undertakings 57 Assets held to match linked liabilities Index linked Property linked Provision for unearned premiums 60 Reinsurers' share of technical provisions Claims outstanding Provision for unexpired risks Other 63 Total sheet 2 (41 to 63)

10 :10:30:00 Analysis of admissible assets Form 13 (Sheet 3) Financial year ended 31st December 2002 Category of assets Total long term insurance business assets registration Period ended number GL/UK/CM day month year Units Category of assets R GL Debtors Other assets Debtors arising out Policyholders of direct insurance operations Intermediaries 72 Salvage and subrogation recoveries Due from ceding insurers and intermediaries under reinsurance business Debtors arising out accepted 74 of reinsurance operations Due from reinsurers and intermediaries under reinsurance contracts ceded As at the end of As at the end of this financial the previous year year Other debtors Due from dependants Other Due in 12 months or less after the end of the financial year Due more than 12 months after the end of the financial year Due in 12 months or less after the end of the financial year Due more than 12 months after the end of the financial year Tangible assets 80 Cash at bank and in hand Deposits not subject to time restriction on withdrawal, with approved credit institutions and approved financial institutions and local authorities Cash in hand Other assets (particulars to be specified by way of supplementary note) 83 Prepayments and accrued income Accrued interest and rent Deferred acquisition costs Other prepayments and accrued income Deductions (under rules 4.14(2)(b) and 4.14(3)) from the aggregate value of assets Total sheet 3 (71 to 86 less 87) Grand total of admissible assets ( ) Reconciliation to asset values determined in accordance with the insurance accounts rules Total admissible assets (as per line 89 above) Total assets in excess of the admissibility limits of Appendix 4.2 (as valued in accordance with those Rules before applying admissibility limits) Solvency margin deduction for subsidiary undertakings which are insurance undertakings Other differences in the valuation of assets (other than for assets not valued above) Assets of a type not valued above, (as valued in accordance with the insurance accounts rules) Total assets determined in accordance with the insurance accounts rules (91 to 95) (35935) Amounts included in line 89 attributable to debts due from related insurers, other than those under contracts of insurance or reinsurance

11 Analysis of admissible assets :10:30:00 Form 13 (Sheet 1) Financial year ended 31st December 2002 Category of assets Commercial Union Life Fund Category registration Period ended of number GL/UK/CM Units day month year assets R GL As at the end of As at the end of this financial the previous Investments year year 1 2 Land and buildings UK insurance business dependants Shares Debt securities issued by, and loans to, dependants Other insurance dependants Shares Debt securities issued by, and loans to, dependants Investments in group undertakings and participating interests Non-insurance dependants Shares Debt securities issued by, and loans to, dependants Shares 27 Total sheet 1 (11 to 30) Other group Debt securities issued by, and loans to, group undertakings 28 undertakings and participating interests Participating interests Debt securities issued by, and loans to, undertakings in 30 which the insurer has a participating interest

12 :10:30:00 Analysis of admissible assets Form 13 (Sheet 2) Financial year ended 31st December 2002 Category of assets Commercial Union Life Fund registration number GL/UK/CM Period ended day month year Units Category of assets R GL Investments (continued) Deposits with ceding undertakings Assets held to cover linked liabilities Equity shares 41 As at the end of As at the end of this financial the previous year year Other shares and other variable yield securities 42 Holdings in collective investment schemes Rights under derivative contracts Other financial investments Fixed interest Debt securities and other fixed income securities Variable interest Participation in investment pools Approved securities Other Approved securities Other Loans secured by mortgages Loans to public or local authorities and nationalised industries or undertakings Loans secured by policies of insurance issued by the Other loans company Other Deposits with Withdrawal subject to a time restriction of one month or less approved credit institutions and approved financial Withdrawal subject to a time restriction of more than one institutions month 55 Other 56 Deposits with ceding undertakings 57 Assets held to match linked liabilities Index linked Property linked Provision for unearned premiums 60 Reinsurers' share of technical provisions Claims outstanding Provision for unexpired risks Other 63 Total sheet 2 (41 to 63)

13 :10:30:00 Analysis of admissible assets Form 13 (Sheet 3) Financial year ended 31st December 2002 Category of assets Commercial Union Life Fund registration Period ended number GL/UK/CM day month year Units Category of assets R GL Debtors Other assets Debtors arising out Policyholders of direct insurance operations Intermediaries 72 Salvage and subrogation recoveries Due from ceding insurers and intermediaries under reinsurance business Debtors arising out accepted 74 of reinsurance operations Due from reinsurers and intermediaries under reinsurance contracts ceded As at the end of As at the end of this financial the previous year year Other debtors Due from dependants Other Due in 12 months or less after the end of the financial year Due more than 12 months after the end of the financial year Due in 12 months or less after the end of the financial year Due more than 12 months after the end of the financial year Tangible assets 80 Cash at bank and in hand Deposits not subject to time restriction on withdrawal, with approved credit institutions and approved financial institutions and local authorities Cash in hand Other assets (particulars to be specified by way of supplementary note) 83 Prepayments and accrued income Accrued interest and rent Deferred acquisition costs Other prepayments and accrued income Deductions (under rules 4.14(2)(b) and 4.14(3)) from the aggregate value of assets Total sheet 3 (71 to 86 less 87) Grand total of admissible assets ( ) Reconciliation to asset values determined in accordance with the insurance accounts rules Total admissible assets (as per line 89 above) Total assets in excess of the admissibility limits of Appendix 4.2 (as valued in accordance with those Rules before applying admissibility limits) Solvency margin deduction for subsidiary undertakings which are insurance undertakings Other differences in the valuation of assets (other than for assets not valued above) Assets of a type not valued above, (as valued in accordance with the insurance accounts rules) Total assets determined in accordance with the insurance accounts rules (91 to 95) (38547) Amounts included in line 89 attributable to debts due from related insurers, other than those under contracts of insurance or reinsurance

14 Analysis of admissible assets :10:30:00 Form 13 (Sheet 1) Financial year ended 31st December 2002 Category of assets Permanent Health Fund Category registration Period ended of number GL/UK/CM Units day month year assets R GL As at the end of As at the end of this financial the previous Investments year year 1 2 Land and buildings 11 UK insurance business dependants Shares Debt securities issued by, and loans to, dependants Other insurance dependants Shares Debt securities issued by, and loans to, dependants Investments in group undertakings and participating interests Non-insurance dependants Shares Debt securities issued by, and loans to, dependants Shares 27 Total sheet 1 (11 to 30) Other group Debt securities issued by, and loans to, group undertakings undertakings and 28 participating interests Participating interests 29 Debt securities issued by, and loans to, undertakings in which the insurer has a participating interest 30 39

15 :10:30:00 Analysis of admissible assets Form 13 (Sheet 2) Financial year ended 31st December 2002 Category of assets Permanent Health Fund registration number GL/UK/CM Period ended day month year Units Category of assets R GL Investments (continued) Deposits with ceding undertakings Assets held to cover linked liabilities As at the end of As at the end of this financial the previous year year 1 2 Equity shares 41 Other shares and other variable yield securities 42 Holdings in collective investment schemes 43 Rights under derivative contracts 44 Other financial investments Fixed interest Debt securities and other fixed income securities Variable interest Participation in investment pools Approved securities Other Approved securities Other Loans secured by mortgages Loans to public or local authorities and nationalised industries or undertakings Loans secured by policies of insurance issued by the Other loans company Other Deposits with Withdrawal subject to a time restriction of one month or less approved credit institutions and approved financial institutions Withdrawal subject to a time restriction of more than one month 55 Other Deposits with ceding undertakings Assets held to match linked liabilities Reinsurers' share of technical provisions Index linked Property linked Provision for unearned premiums Claims outstanding Provision for unexpired risks Other Total sheet 2 (41 to 63)

16 :10:30:00 Analysis of admissible assets Form 13 (Sheet 3) Financial year ended 31st December 2002 Category of assets Permanent Health Fund registration Period ended number GL/UK/CM day month year Units Category of assets R GL Debtors Other assets Debtors arising out Policyholders of direct insurance operations Intermediaries 72 Salvage and subrogation recoveries Due from ceding insurers and intermediaries under reinsurance business Debtors arising out accepted 74 of reinsurance operations Due from reinsurers and intermediaries under reinsurance contracts ceded As at the end of As at the end of this financial the previous year year Other debtors Due from dependants Other Due in 12 months or less after the end of the financial year Due more than 12 months after the end of the financial year Due in 12 months or less after the end of the financial year Due more than 12 months after the end of the financial year Tangible assets 80 Cash at bank and in hand Deposits not subject to time restriction on withdrawal, with approved credit institutions and approved financial institutions and local authorities Cash in hand Other assets (particulars to be specified by way of supplementary note) 83 Prepayments and accrued income Accrued interest and rent Deferred acquisition costs Other prepayments and accrued income 86 Deductions (under rules 4.14(2)(b) and 4.14(3)) from the aggregate value of assets Total sheet 3 (71 to 86 less 87) Grand total of admissible assets ( ) Reconciliation to asset values determined in accordance with the insurance accounts rules Total admissible assets (as per line 89 above) Total assets in excess of the admissibility limits of Appendix 4.2 (as valued in accordance with those Rules before applying admissibility limits) Solvency margin deduction for subsidiary undertakings which are insurance undertakings Other differences in the valuation of assets (other than for assets not valued above) Assets of a type not valued above, (as valued in accordance with the insurance accounts rules) Total assets determined in accordance with the insurance accounts rules (91 to 95) Amounts included in line 89 attributable to debts due from related insurers, other than those under contracts of insurance or reinsurance

17 :10:30:00 Form 14 Long term insurance business liabilities and margins Financial year ended Category of assets 31st December 2002 Total long term insurance business assets Category registration Period ended of number GL/UK/CM day month year Units assets R GL As at the end of As at the end of this financial the previous year year 1 2 Source Mathematical reserves, after distribution of surplus See Instruction 2 Cash bonuses which had not been paid to policyholders prior to end of 12 See Instruction 3 the financial year Balance of surplus/(valuation deficit) See Instruction 4 Long term insurance business fund carried forward (11 to 13) See Instruction 5 Claims outstanding which Gross amount had fallen due for payment before the end of the Reinsurers' share 16 financial year Net (15-16) Provisions for Taxation other risks and charges Other Deposits received from reinsurers 23 Creditors and other liabilities Arising out of insurance operations Debenture loans Direct insurance business 31 Reinsurance accepted Reinsurance ceded Secured Unsecured Amounts owed to credit institutions Other creditors Accruals and deferred income Taxation Other Provision for adverse changes (calculated in accordance with rule 5.3) Total other insurance and non-insurance liabilities (17 to 41) Excess of the value of net admissible assets Total liabilities and margins See Instruction Amounts included in line 59 attributable to liabilities to related companies, other than those under contracts of insurance or reinsurance Amounts included in line 59 attributable to liabilities in respect of property linked benefits Amount of any additional mathematical reserves included in line 51 which have been taken into account in the appointed actuary's certificate See Instruction 7

18 :10:30:00 Form 14 Long term insurance business liabilities and margins Financial year ended Category of assets 31st December 2002 Commercial Union Life Fund Category registration Period ended of number GL/UK/CM day month year Units assets R GL As at the end of As at the end of this financial the previous year year 1 2 Source Mathematical reserves, after distribution of surplus See Instruction 2 Cash bonuses which had not been paid to policyholders prior to end of 12 See Instruction 3 the financial year Balance of surplus/(valuation deficit) See Instruction 4 Long term insurance business fund carried forward (11 to 13) See Instruction 5 Claims outstanding which Gross amount had fallen due for payment before the end of the Reinsurers' share 16 financial year Net (15-16) Provisions for Taxation other risks and charges Other Deposits received from reinsurers 23 Creditors and other liabilities Arising out of insurance operations Debenture loans Direct insurance business 31 Reinsurance accepted Reinsurance ceded Secured Unsecured Amounts owed to credit institutions Other creditors Accruals and deferred income Taxation Other Provision for adverse changes (calculated in accordance with rule 5.3) Total other insurance and non-insurance liabilities (17 to 41) Excess of the value of net admissible assets Total liabilities and margins See Instruction Amounts included in line 59 attributable to liabilities to related companies, other than those under contracts of insurance or reinsurance Amounts included in line 59 attributable to liabilities in respect of property linked benefits Amount of any additional mathematical reserves included in line 51 which have been taken into account in the appointed actuary's certificate See Instruction 7

19 :10:30:00 Form 14 Long term insurance business liabilities and margins Financial year ended Category of assets 31st December 2002 Permanent Health Fund Category registration Period ended of number GL/UK/CM day month year Units assets R GL As at the end of As at the end of this financial the previous year year 1 2 Source Mathematical reserves, after distribution of surplus See Instruction 2 Cash bonuses which had not been paid to policyholders prior to end of 12 See Instruction 3 the financial year Balance of surplus/(valuation deficit) See Instruction 4 Long term insurance business fund carried forward (11 to 13) See Instruction 5 Claims outstanding which Gross amount 15 had fallen due for payment before the end of the Reinsurers' share 16 financial year Net (15-16) 17 Provisions for Taxation other risks and charges Other Deposits received from reinsurers 23 Creditors and other liabilities Arising out of insurance operations Debenture loans Direct insurance business 31 Reinsurance accepted Reinsurance ceded Secured Unsecured Amounts owed to credit institutions 36 Other creditors Accruals and deferred income Taxation Other Provision for adverse changes (calculated in accordance with rule 5.3) Total other insurance and non-insurance liabilities (17 to 41) Excess of the value of net admissible assets Total liabilities and margins See Instruction Amounts included in line 59 attributable to liabilities to related companies, other than those under contracts of insurance or reinsurance Amounts included in line 59 attributable to liabilities in respect of property linked benefits Amount of any additional mathematical reserves included in line 51 which have been taken into account in the appointed actuary's certificate See Instruction 7

20 :10:30:00 Form 17 Analysis of derivative contracts Insurance Business Long term Financial year ended 31st December 2002 Category of assets Total long term insurance business assets Category registration Period ended of number GL/UK/CM day month year Units assets R GL Derivative contracts Fixed-interest securities 11 As at the end of this financial year As at the end of the previous year Assets Liabilities Assets Liabilities Futures contracts Equity shares 12 Land 13 Currencies Other 15 Fixed-interest securities Equity shares Options Land 23 Currencies 24 Other Fixed-interest securities 31 Contracts for differences Equity shares 32 Land 33 Currencies 34 Other 35 Adjustments for variation margin 41 Total (11 to 41)

21 :10:30:00 Form 17 Analysis of derivative contracts Insurance Business Long term Financial year ended 31st December 2002 Category of assets Commercial Union Life Fund Category registration Period ended of number GL/UK/CM day month year Units assets R GL Derivative contracts Fixed-interest securities 11 As at the end of this financial year As at the end of the previous year Assets Liabilities Assets Liabilities Futures contracts Equity shares 12 Land 13 Currencies Other 15 Fixed-interest securities Equity shares Options Land 23 Currencies 24 Other Fixed-interest securities 31 Contracts for differences Equity shares 32 Land 33 Currencies 34 Other 35 Adjustments for variation margin 41 Total (11 to 41)

22 :10:30:00 Form 40 Long term insurance business : Revenue account Ordinary insurance business Financial year ended 31st December 2002 Name and number of fund/summary Summary No of No of registration Period ended fund/ part of number GL/UK/CM Units OB/IB day month year Summary Fund R GL OB 99 0 Items to be shown net of reinsurance ceded The financial Previous year year 1 2 Earned premiums Investment income receivable before deduction of tax 12 Increase (decrease) in the value of non-linked assets brought into account 13 Increase (decrease) in the value of linked assets (896547) (169025) (2015) (509) Other income 15 Total income (11 to 15) 19 Claims incurred 21 Expenses payable 22 Interest payable before deduction of tax 23 Taxation (58883) Other expenditure 25 Transfer to (from) non technical account 26 Total expenditure (21 to 26) 29 Increase (decrease) in fund in financial year (19-29) 39 Fund brought forward 49 Fund carried forward (39+49)

23 :10:30:00 Form 40 Long term insurance business : Revenue account Ordinary insurance business Financial year ended 31st December 2002 Name and number of fund/summary Commercial Union Life Fund 1 No of No of registration Period ended fund/ part of number GL/UK/CM Units OB/IB day month year Summary Fund R GL OB 1 99 Items to be shown net of reinsurance ceded The financial Previous year year 1 2 Earned premiums Investment income receivable before deduction of tax 12 Increase (decrease) in the value of non-linked assets brought into account 13 Increase (decrease) in the value of linked assets (897048) (170992) (2015) (509) Other income 15 Total income (11 to 15) 19 Claims incurred 21 Expenses payable 22 Interest payable before deduction of tax 23 Taxation (57400) Other expenditure 25 Transfer to (from) non technical account 26 Total expenditure (21 to 26) 29 Increase (decrease) in fund in financial year (19-29) 39 Fund brought forward 49 Fund carried forward (39+49)

24 :10:30:00 Form 40 Long term insurance business : Revenue account Ordinary insurance business Financial year ended 31st December 2002 Name and number of fund/summary Permanent Health Fund 2 No of No of registration Period ended fund/ part of number GL/UK/CM Units OB/IB day month year Summary Fund R GL OB 2 0 Items to be shown net of reinsurance ceded The financial Previous year year 1 2 Earned premiums Investment income receivable before deduction of tax 12 Increase (decrease) in the value of non-linked assets brought into account Increase (decrease) in the value of linked assets 14 Other income 15 Total income (11 to 15) 19 Claims incurred 21 Expenses payable 22 Interest payable before deduction of tax 23 Taxation (1483) (104) Other expenditure 25 Transfer to (from) non technical account 26 Total expenditure (21 to 26) 29 Increase (decrease) in fund in financial year (19-29) 39 Fund brought forward 49 Fund carried forward (39+49)

25 :10:30:00 Form 41 Long term insurance business : Analysis of premiums and expenses Ordinary insurance business Financial year ended 31st December 2002 Name and number of fund/summary Summary No of No of registration Period ended fund/ part of number GL/UK/CM day month year Units OB/IB Summary Fund R GL OB 99 0 Life assurance and general annuity Single premium 11 contracts Regular premium 12 Gross Payable to or Net of recoverable from reinsurance reinsurers (1-2) Pension business contracts Single premium 13 Regular premium Earned premiums in the financial year Permanent health contracts Other contracts Single premium Regular premium Single premium 17 Regular premium 18 Total premiums Single premium 19 Regular premium Expenses payable in the financial year Total premiums at lines 19 and 29 UK contracts attributable to Overseas contracts Commission payable in connection with acquisition of business Other commission payable Management expenses in connection with acquisition of business Management expenses in connection with maintenance of business Other management expenses Total expenses (41 to 45) Total expenses at UK contracts line 49 attributable to Overseas contracts

26 :10:30:00 Form 41 Long term insurance business : Analysis of premiums and expenses Ordinary insurance business Financial year ended 31st December 2002 Name and number of fund/summary Commercial Union Life Fund 1 No of No of registration Period ended fund/ part of number GL/UK/CM day month year Units OB/IB Summary Fund R GL OB 1 99 Life assurance and general annuity Single premium 11 contracts Regular premium 12 Gross Payable to or Net of recoverable from reinsurance reinsurers (1-2) Pension business contracts Single premium 13 Regular premium Earned premiums in the financial year Permanent health contracts Other contracts Single premium 15 Regular premium Single premium 17 Regular premium 18 Total premiums Single premium 19 Regular premium Expenses payable in the financial year Total premiums at lines 19 and 29 UK contracts attributable to Overseas contracts Commission payable in connection with acquisition of business Other commission payable Management expenses in connection with acquisition of business Management expenses in connection with maintenance of business Other management expenses Total expenses (41 to 45) Total expenses at UK contracts line 49 attributable to Overseas contracts

27 :10:30:00 Form 41 Long term insurance business : Analysis of premiums and expenses Ordinary insurance business Financial year ended 31st December 2002 Name and number of fund/summary Permanent Health Fund 2 No of No of registration Period ended fund/ part of number GL/UK/CM day month year Units OB/IB Summary Fund R GL OB 2 0 Life assurance and Single premium 11 general annuity contracts Regular premium 12 Gross Payable to or Net of recoverable from reinsurance reinsurers (1-2) Earned premiums in the financial year Pension business contracts Permanent health contracts Other contracts Single premium 13 Regular premium 14 Single premium Regular premium Single premium 17 Regular premium 18 Total premiums Single premium 19 Regular premium Total premiums at UK contracts 31 lines 19 and 29 attributable to Overseas contracts Expenses payable in the financial year Commission payable in connection with acquisition of business Other commission payable (2268) Management expenses in connection with acquisition of business Management expenses in connection with maintenance of business Other management expenses Total expenses (41 to 45) Total expenses at line 49 attributable to UK contracts 51 Overseas contracts

28 :10:30:00 Form 42 Long term insurance business : Analysis of claims Ordinary insurance business Financial year ended 31st December 2002 Name and number of fund/summary Summary No of No of registration Period ended fund/ part of number GL/UK/CM Units OB/IB day month year Summary Fund R GL OB 99 0 Gross Recoverable Net of from reinsurers reinsurance Claims incurred in the financial year (1-2) On death 11 By way of lump sums on maturity Life assurance and annuity contracts By way of annuity payments 13 By way of payments arising from other insured events On surrender or partial surrender 15 Total life assurance and annuity claims (11 to 15) On death 21 Pension By way of lump sums on vesting 22 business By way of vested annuity payments 23 contracts On surrender or partial surrender 24 Total pension business claims (21 to 24) 29 Permanent By way of lump sums 31 health By way of periodical payments 32 contracts Total permanent health claims (31+32) 39 Other contracts By way of lump sums 41 By way of periodical payments 42 Total claims (41+42) 49 Total claims ( ) Total claims at line 59 attributable to UK contracts 61 Overseas contracts

29 :10:30:00 Form 42 Long term insurance business : Analysis of claims Ordinary insurance business Financial year ended 31st December 2002 Name and number of fund/summary Commercial Union Life Fund 1 No of No of registration Period ended fund/ part of number GL/UK/CM Units OB/IB day month year Summary Fund R GL OB 1 99 Gross Recoverable Net of from reinsurers reinsurance Claims incurred in the financial year (1-2) On death 11 By way of lump sums on maturity Life assurance and annuity contracts By way of annuity payments 13 By way of payments arising from other insured events On surrender or partial surrender 15 Total life assurance and annuity claims (11 to 15) On death 21 Pension By way of lump sums on vesting 22 business By way of vested annuity payments 23 contracts On surrender or partial surrender 24 Total pension business claims (21 to 24) 29 Permanent By way of lump sums 31 health By way of periodical payments 32 contracts Total permanent health claims (31+32) 39 Other contracts By way of lump sums 41 By way of periodical payments 42 Total claims (41+42) 49 Total claims ( ) Total claims at line 59 attributable to UK contracts 61 Overseas contracts

30 :10:30:00 Form 42 Long term insurance business : Analysis of claims Ordinary insurance business Financial year ended 31st December 2002 Name and number of fund/summary Permanent Health Fund 2 No of No of registration Period ended fund/ part of number GL/UK/CM Units OB/IB day month year Summary Fund R GL OB 2 0 Gross Recoverable Net of from reinsurers reinsurance Claims incurred in the financial year (1-2) On death 11 By way of lump sums on maturity 12 Life assurance and annuity contracts By way of annuity payments 13 By way of payments arising from other insured events 14 On surrender or partial surrender 15 Total life assurance and annuity claims (11 to 15) 19 On death 21 Pension By way of lump sums on vesting 22 business By way of vested annuity payments 23 contracts On surrender or partial surrender 24 Total pension business claims (21 to 24) 29 Permanent By way of lump sums 31 health By way of periodical payments 32 contracts Total permanent health claims (31+32) 39 By way of lump sums 41 Other contracts By way of periodical payments 42 Total claims (41+42) 49 Total claims ( ) Total claims at line 59 attributable to UK contracts 61 Overseas contracts

31 Returns under the Accounts and Statements Rules Valuation report prepared by the appointed actuary IPRU (INS) Appendix 9.4 Life Fund Financial year ended 31 December The investigation was made at 31 December The date to which the previous investigation related was 31 December The valuation has been made in conformity with IPRU (INS) rule Non linked contracts (a) Accumulating with-profit policies Personal Pension Plans This category consists of the contracts listed below, under which premiums can be invested in a unitised with profits fund (the Pensions With Profits Fund) as well as internal linked funds. - Sterling Personal Pension Plan, Free-Standing AVC and Executive Pension Plan - Optimiser Personal Pension Plan, Free-Standing AVC and Executive Pension Plan - Lifestyler Personal Pension Plan, Free-Standing AVC and Executive Pension Plan Further details of the Pensions With Profits Fund are provided below. The contracts are further described in paragraph 5 below, where details of contractual charges are given. i) Deductions from identifiable current benefit The reserves the right to adjust the value of units by applying a Market Value Reduction (MVR) in the following circumstances: - Transfer to another provider. - Early retirement. - Switches to internal linked funds. - The adjustment is not applied on normal retirement or death. - The adjustment is applied at the 's discretion. In determining an MVR the investment performance of the Pensions With Profits fund is compared with the return credited to the units being cancelled. An MVR may be applied when the investment performance is less than the credited return. - A discretionary final bonus may also be added or adjusted at any time. ii) A market value reduction has been applied at certain times during the report period. The Market Value Reduction was expressed as a scale varying by year of unit purchase and the scale was revised on a number of occasions to reflect changing investment conditions. iii) Guaranteed investment returns The price of units in the Pensions With Profits Fund is guaranteed never to fall. The value of units purchased on or before 31 December 1992 will increase by a minimum guaranteed rate of 4.0% per annum. iv) There are no guaranteed surrender values. v) Options Units in the Pensions With-Profits Fund may be switched to the internal linked funds at any time. Switches and redirection of premiums into the Pensions With-Profits Fund are permitted, except within five years of the selected retirement date. - A discretionary final bonus may also be added or adjusted at any time. Sterling Group (Unitised) Plan This is a contract under which premiums can be invested in a unitised with profits fund (the Pensions With Profits Fund) as well as internal linked funds. Detail specific to the Pensions With Profits Fund is described below. The contract is further described in paragraph 5 below, where details of contractual charges are given.

32 Valuation report prepared by the appointed actuary IPRU (INS) Appendix 9.4 Life Fund Financial year ended 31 December 2002 i) Deductions from identifiable current benefit - The reserves the right to adjust the bid value of units by applying an MVR on: - Transfer to another provider. - Early retirement. - Switches to internal linked funds. - The adjustment is not applied on normal retirement or death. - The adjustment is applied at the 's discretion. In determining an MVR the investment performance of the Pensions With Profits fund is compared with the return credited to the units being cancelled. An MVR may be applied when the investment performance is less than the credited return. ii) A market value reduction has been applied at certain times during the report period. The Market Value Reduction was expressed as a scale varying by year of unit purchase and the scale was revised on a number of occasions to reflect changing investment conditions. iii) Guaranteed investment returns The price of units in the Pensions With Profits Fund is guaranteed never to fall. The value of units purchased on or before 31st December 1992 will increase by a minimum guaranteed rate of 4.0% per annum. iv) There are no guaranteed surrender values. v) Options - Units in the Pensions With Profits Fund may be switched to the internal linked funds at any time. - Switches and redirection of premiums into the Pensions With Profits Fund are permitted, except within 5 years of the selected retirement date. Sterling Group (Deposit Administration) Plan This is a group pensions contract under which premiums minus charges are accumulated in members' accounts to provide a cash sum at retirement. The cash sum is used to provide benefits for the scheme member. i) The benefits are related to the identifiable current value of a member's account as follows: Retirement benefits - On or after the selected normal retirement date, the value of the member's account, plus any final bonus. - Before the selected normal retirement date, the value of the member's account, plus any final bonus, less any discontinuance charges. - These amounts, without further penalty (other than possible MVR), may be transferred to another insurance company to purchase pension benefits. Death benefits - The full value of a member's account, plus any final bonus. Additional life cover is also available. Leaving service (other than through death or retirement) - The member's account may be maintained in the scheme to provide benefits on death or retirement, less any discontinuance charge. - The amount of the member's account, less any discontinuance charge and/or market value adjustment, may be transferred to another insurance company. - In certain circumstances the member may take a refund of contributions, less a deduction for tax. Charges Initial charges: - 6% of each regular contribution. - 4% of each single and protected contribution, including transfers (prior to March 1993, transfers were charged at 1%). Administration charges: Scheme Member With contribution Member Without contribution Contracted out Not contracted out The level of charge is not guaranteed, except that in the first five policy years, the scheme and member charges are guaranteed not to increase by more than the increase in the National Average Earnings Index over the corresponding period. Discontinuance charges: A charge is currently made if contributions have not been paid for more than ten years and there are more than five complete years to Normal Retirement Date when contributions cease. The charge is a proportion of the value of the member's account relating to regular ordinary contributions. Number of years for which contributions have been paid Charge 20% 20% 20% 16% 12% 10% 8% 6% 4% 2% 0%