ST ANDREW'S LIFE ASSURANCE PLC

Transcription

1 Annual PRA Insurance Returns for the year ended 31 December 2014 IPRU(INS) Appendices 9.1, 9.3, 9.4, 9.6

2 Balance Sheet and Profit and Loss Account Contents Form 2 Statement of solvency - long-term insurance business 1 Form 3 Components of capital resources 3 Form 13 Analysis of admissible assets 6 Form 14 Long term insurance business liabilities and margins 12 Form 15 Liabilities (other than long term insurance business) 13 Form 16 Profit and loss account (non-technical account) 14 Form 17 Analysis of derivative contracts 15 Long Term Insurance Business: Revenue Account and Additional Information Form 40 Revenue account 16 Form 41 Analysis of premiums 17 Form 42 Analysis of claims 18 Form 43 Analysis of expenses 19 Form 44 Linked funds balance sheet 20 Form 45 Revenue account for internal linked funds 21 Form 46 Summary of new business 22 Form 47 Analysis of new business 23 Form 48 Assets not held to match linked liabilities 24 Form 50 Summary of mathematical reserves 25 Form 51 Valuation summary of non-linked contracts (other than 26 accumulating with-profits contracts) Form 53 Valuation summary of property linked contracts 29 Form 55 Unit prices for internal linked funds 31 Form 57 Analysis of valuation interest rate 32 Form 58 Distribution of surplus 33 Form 60 Long-term insurance capital requirement 34 Supplementary notes to the return 35 Additional information on derivative contracts 42 Additional information on controllers 43 Abstract of the Valuation Report 44 Directors' Certificate 55 Auditor's Report 56

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4 :17:48:35 Form 2 Statement of solvency - long-term insurance business Global business Solo solvency calculation Company GL/ registration UK/ day month year Units number CM R GL As at end of this financial year As at end of the previous year 1 2 Capital resources Capital resources arising within the long-term insurance fund Capital resources allocated towards long-term insurance business arising outside the long-term insurance fund Capital resources available to cover long-term insurance business capital resources requirement (11+12) Guarantee fund Guarantee fund requirement Excess (deficiency) of available capital resources to cover guarantee fund requirement Minimum capital requirement (MCR) Long-term insurance capital requirement Resilience capital requirement Base capital resources requirement Individual minimum capital requirement Capital requirements of regulated related undertakings 35 Minimum capital requirement (34+35) Excess (deficiency) of available capital resources to cover 50% of MCR Excess (deficiency) of available capital resources to cover 75% of MCR Enhanced capital requirement With-profits insurance capital component 39 Enhanced capital requirement Capital resources requirement (CRR) Capital resources requirement (greater of 36 and 40) Excess (deficiency) of available capital resources to cover long-term insurance business CRR (13-41) Contingent liabilities Quantifiable contingent liabilities in respect of long-term insurance business as shown in a supplementary note to Form

5 :17:48:35 Form 2 Covering Sheet to Form 2 Global business Financial year ended 31-Dec-14 A M Parsons Director T E Strauss Director C J Thornton Director Date 26 March

6 :17:48:35 Components of capital resources Form 3 (Sheet 1) Global business Company GL/ registration UK/ day month year Units number CM R GL Core tier one capital General Long-term Total as at Total as at insurance insurance the end of the end of business business this financial the previous year year Permanent share capital Profit and loss account and other reserves Share premium account 13 Positive valuation differences Fund for future appropriations Core tier one capital in related undertakings Core tier one capital (sum of 11 to 16) Tier one waivers Unpaid share capital / unpaid initial funds and calls for supplementary contributions Implicit Items 22 Tier one waivers in related undertakings Total tier one waivers as restricted ( ) 24 Other tier one capital Perpetual non-cumulative preference shares as restricted Perpetual non-cumulative preference shares in related undertakings Innovative tier one capital as restricted Innovative tier one capital in related undertakings Total tier one capital before deductions ( ) Investments in own shares Intangible assets Amounts deducted from technical provisions for discounting Other negative valuation differences Deductions in related undertakings Deductions from tier one (32 to 36) Total tier one capital after deductions (31-37)

7 :17:48:35 Components of capital resources Form 3 (Sheet 2) Global business Tier two capital Company GL/ registration UK/ day month year Units number CM R GL General Long-term Total as at Total as at insurance insurance the end of the end of business business this financial the previous year year Implicit items, (tier two waivers and amounts excluded from line 22) Perpetual non-cumulative preference shares excluded from line 25 Innovative tier one capital excluded from line 27 Tier two waivers, innovative tier one capital and perpetual noncumulative preference shares treated as tier two capital (41 to 43) Perpetual cumulative preference shares Perpetual subordinated debt and securities Upper tier two capital in related undertakings 47 Upper tier two capital (44 to 47) 49 Fixed term preference shares 51 Other tier two instruments 52 Lower tier two capital in related undertakings 53 Lower tier two capital ( ) 59 Total tier two capital before restrictions (49+59) 61 Excess tier two capital 62 Further excess lower tier two capital Total tier two capital after restrictions, before deductions ( )

8 :17:48:35 Components of capital resources Form 3 (Sheet 3) Global business Total capital resources Company GL/ registration UK/ day month year Units number CM R GL General Long-term Total as at Total as at insurance insurance the end of the end of business business this financial the previous year year Positive adjustments for regulated non-insurance related undertakings Total capital resources before deductions ( ) Inadmissible assets other than intangibles and own shares Assets in excess of market risk and counterparty limits Deductions for related ancillary services undertakings Deductions for regulated non-insurance related undertakings Deductions of ineligible surplus capital Total capital resources after deductions ( ) Available capital resources for GENPRU/INSPRU tests Available capital resources for guarantee fund requirement Available capital resources for 50% MCR requirement Available capital resources for 75% MCR requirement Financial engineering adjustments Implicit items Financial reinsurance - ceded Financial reinsurance - accepted Outstanding contingent loans Any other charges on future profits Sum of financial engineering adjustments ( )

9 :17:48:35 Analysis of admissible assets Form 13 (Sheet 1) Global business Category of assets Total other than long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R GL As at end of this financial year As at end of the previous year 1 2 Land and buildings 11 Investments in group undertakings and participating interests UK insurance dependants Other insurance dependants Non-insurance dependants Other group undertakings Participating interests Shares Shares Shares Shares Shares Debts and loans Debts and loans Debts and loans Debts and loans Debts and loans Other financial investments Equity shares 41 Other shares and other variable yield participations 42 Holdings in collective investment schemes Rights under derivative contracts 44 Fixed interest securities Variable interest securities Approved Approved Other Other Participation in investment pools 49 Loans secured by mortgages 50 Loans to public or local authorities and nationalised industries or undertakings 51 Loans secured by policies of insurance issued by the company Other loans Bank and approved credit & financial institution deposits Other financial investments 56 Deposits with ceding undertakings 57 Assets held to match linked liabilities One month or less withdrawal More than one month withdrawal Index linked Property linked

10 :17:48:35 Analysis of admissible assets Form 13 (Sheet 2) Global business Category of assets Total other than long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R GL As at end of this financial year As at end of the previous year Reinsurers' share of technical provisions 1 2 Provision for unearned premiums Claims outstanding Provision for unexpired risks Other Debtors and salvage Direct insurance business Salvage and subrogation recoveries Reinsurance Dependants Other Other assets Policyholders Intermediaries Accepted Ceded due in 12 months or less due in more than 12 months due in 12 months or less due in more than 12 months Tangible assets Deposits not subject to time restriction on withdrawal with approved institutions Cash in hand Other assets (particulars to be specified by way of supplementary note) Accrued interest and rent Deferred acquisition costs (general business only) Other prepayments and accrued income Deductions from the aggregate value of assets 87 Grand total of admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (11 to 86 less 87)

11 :17:48:35 Analysis of admissible assets Form 13 (Sheet 3) Global business Category of assets Total other than long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R GL As at end of this financial year As at end of the previous year 1 2 Reconciliation to asset values determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting Total admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (as per line 89 above) Admissible assets in excess of market and counterparty limits Inadmissible assets directly held Capital resources requirement deduction of regulated related undertakings Ineligible surplus capital and restricted assets in regulated related insurance undertakings Inadmissible assets of regulated related undertakings Book value of related ancillary services undertakings Other differences in the valuation of assets (other than for assets not valued above) Deferred acquisition costs excluded from line 89 Reinsurers' share of technical provisions excluded from line 89 Other asset adjustments (may be negative) Total assets determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (91 to 101) (3627) (3730) Amounts included in line 89 attributable to debts due from related insurers, other than those under contracts of insurance or reinsurance 103 8

12 :17:48:35 Analysis of admissible assets Form 13 (Sheet 1) Global business Category of assets Total long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R GL As at end of this financial year As at end of the previous year 1 2 Land and buildings 11 Investments in group undertakings and participating interests UK insurance dependants Other insurance dependants Non-insurance dependants Other group undertakings Participating interests Shares Shares Shares Shares Shares Debts and loans Debts and loans Debts and loans Debts and loans Debts and loans Other financial investments Equity shares 41 Other shares and other variable yield participations 42 Holdings in collective investment schemes Rights under derivative contracts Fixed interest securities Variable interest securities Approved Approved Other Other Participation in investment pools 49 Loans secured by mortgages 50 Loans to public or local authorities and nationalised industries or undertakings 51 Loans secured by policies of insurance issued by the company Other loans Bank and approved credit & financial institution deposits Other financial investments 56 Deposits with ceding undertakings 57 Assets held to match linked liabilities One month or less withdrawal More than one month withdrawal Index linked Property linked

13 :17:48:35 Analysis of admissible assets Form 13 (Sheet 2) Global business Category of assets Total long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R GL As at end of this financial year As at end of the previous year Reinsurers' share of technical provisions 1 2 Provision for unearned premiums Claims outstanding Provision for unexpired risks Other Debtors and salvage Direct insurance business Salvage and subrogation recoveries Reinsurance Dependants Other Other assets Policyholders Intermediaries Accepted Ceded due in 12 months or less due in more than 12 months due in 12 months or less due in more than 12 months Tangible assets Deposits not subject to time restriction on withdrawal with approved institutions Cash in hand Other assets (particulars to be specified by way of supplementary note) Accrued interest and rent Deferred acquisition costs (general business only) Other prepayments and accrued income Deductions from the aggregate value of assets 87 Grand total of admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (11 to 86 less 87)

14 :17:48:35 Analysis of admissible assets Form 13 (Sheet 3) Global business Category of assets Total long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R GL As at end of this financial year As at end of the previous year 1 2 Reconciliation to asset values determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting Total admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (as per line 89 above) Admissible assets in excess of market and counterparty limits Inadmissible assets directly held Capital resources requirement deduction of regulated related undertakings Ineligible surplus capital and restricted assets in regulated related insurance undertakings Inadmissible assets of regulated related undertakings Book value of related ancillary services undertakings Other differences in the valuation of assets (other than for assets not valued above) Deferred acquisition costs excluded from line 89 Reinsurers' share of technical provisions excluded from line 89 Other asset adjustments (may be negative) Total assets determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (91 to 101) Amounts included in line 89 attributable to debts due from related insurers, other than those under contracts of insurance or reinsurance

15 :17:48:35 Long term insurance business liabilities and margins Form 14 Global business Total business/sub fund LTBF Non Profit Units 000 As at end of As at end of this financial the previous year year 1 2 Mathematical reserves, after distribution of surplus Cash bonuses which had not been paid to policyholders prior to end of the financial year Balance of surplus/(valuation deficit) Long term insurance business fund carried forward (11 to 13) Claims outstanding Provisions 12 Gross Reinsurers' share 16 Net (15-16) Taxation 21 Other risks and charges 22 Deposits received from reinsurers 23 Creditors Debenture loans Direct insurance business Reinsurance accepted Reinsurance ceded Secured 34 Unsecured 35 Amounts owed to credit institutions 36 Creditors Taxation Other Accruals and deferred income 39 Provision for "reasonably foreseeable adverse variations" Total other insurance and non-insurance liabilities (17 to 41) Excess of the value of net admissible assets 51 Total liabilities and margins 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 Total liabilities ( ) Increase to liabilities - DAC related Reinsurers' share of technical provisions Other adjustments to liabilities (may be negative) Capital and reserves and fund for future appropriations Total liabilities under insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (71 to 75)

16 :17:48:35 Form 15 Liabilities (other than long term insurance business) Global business Company GL/ registration UK/ day month year Units number CM R GL Technical provisions (gross amount) As at end of As at end of this financial the previous year year 1 2 Provisions for unearned premiums 11 Claims outstanding 12 Provision for unexpired risks 13 Equalisation provisions Credit business 14 Other than credit business 15 Other technical provisions 16 Total gross technical provisions (11 to 16) 19 Provisions and creditors Provisions Taxation 21 Other risks and charges 22 Deposits received from reinsurers 31 Creditors Debenture loans Direct insurance business 41 Reinsurance accepted 42 Reinsurance ceded 43 Secured 44 Unsecured 45 Amounts owed to credit institutions 46 Creditors Taxation Foreseeable dividend 48 Other 49 9 Accruals and deferred income 51 Total (19 to 51) Provision for "reasonably foreseeable adverse variations" 61 Cumulative preference share capital 62 Subordinated loan capital 63 Total (59 to 63) Amounts included in line 69 attributable to liabilities to related insurers, other than those under contracts of insurance or reinsurance 71 Amounts deducted from technical provisions for discounting 82 Other adjustments (may be negative) 83 Capital and reserves Total liabilities under insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting ( )

17 :17:48:35 Form 16 Profit and loss account (non-technical account) Global business Company GL/ registration UK/ day month year Units number CM R GL This financial year Previous year 1 2 Transfer (to)/from the general insurance business technical account From Form Equalisation provisions 12 Transfer from the long term insurance business revenue account Income Value re-adjustments on Investment income 15 investments Gains on the realisation of investments Investment management charges, including interest Value re-adjustments on Investment charges 18 investments Loss on the realisation of investments Allocated investment return transferred to the general insurance business technical account Other income and charges (particulars to be specified by way of supplementary note) Profit or loss on ordinary activities before tax ( ) Tax on profit or loss on ordinary activities 31 (906) 914 Profit or loss on ordinary activities after tax (29-31) Extraordinary profit or loss (particulars to be specified by way of supplementary note) 41 Tax on extraordinary profit or loss 42 Other taxes not shown under the preceding items 43 Profit or loss for the financial year (39+41-(42+43)) Dividends (paid or foreseeable) Profit or loss retained for the financial year (49-51)

18 :17:48:35 Form 17 Analysis of derivative contracts Global business Category of assets Total long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R GL Derivative contracts Value as at the end of this financial year Notional amount as at the end of this financial year Futures and contracts for differences In the money options Out of the money options 11 Interest rates 12 Inflation 13 Credit index / basket 14 Credit single name 15 Equity stock 17 Land 18 Currencies 19 Mortality 20 Other 21 Assets Liabilities Bought / Long Sold / Short Equity index calls 32 Equity stock calls 33 Equity index puts Equity stock puts 35 Other 36 Swaptions 41 Equity index calls 42 Equity stock calls 43 Equity index puts Equity stock puts 45 Other 46 Total (11 to 46) Adjustment for variation margin Total ( ) Fixed-interest securities Equity index Swaptions 52 (58) (46) THE NOTIONAL AMOUNTS IN COLUMNS 3 AND 4 ARE NOT A MEASURE OF EXPOSURE. Please see instructions 11 and 12 to this Form for the meaning of these figures. 15

19 :17:48:35 Long-term insurance business : Revenue account Form 40 Total business / subfund LTBF Non Profit Units 000 Financial year Previous year 1 2 Income Earned premiums Investment income receivable before deduction of tax Increase (decrease) in the value of non-linked assets brought into account Increase (decrease) in the value of linked assets (37382) Other income Total income Expenditure Claims incurred Expenses payable Interest payable before the deduction of tax Taxation (575) Other expenditure 25 Transfer to (from) non technical account Total expenditure Business transfers - in 31 Business transfers - out 32 Increase (decrease) in fund in financial year ( ) 39 (757787) (122230) Fund brought forward Fund carried forward (39+49)

20 :17:48:35 Long-term insurance business : Analysis of premiums Form 41 Total business / subfund LTBF Non Profit Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year Gross Regular premiums Single premiums (264) Reinsurance - external Regular premiums Single premiums 14 Reinsurance - intra-group Regular premiums Single premiums (3256) Net of reinsurance Regular premiums Single premiums (264) Total Gross (264) Reinsurance Net (264)

21 :17:48:35 Long-term insurance business : Analysis of claims Form 42 Total business / subfund LTBF Non Profit Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year Gross Death or disability lump sums Disability periodic payments 12 Surrender or partial surrender Annuity payments Lump sums on maturity Total Reinsurance - external Death or disability lump sums Disability periodic payments 22 Surrender or partial surrender Annuity payments 24 Lump sums on maturity 25 Total Reinsurance - intra-group Death or disability lump sums Disability periodic payments 32 Surrender or partial surrender Annuity payments 34 Lump sums on maturity Total Net of reinsurance Death or disability lump sums Disability periodic payments 42 Surrender or partial surrender Annuity payments Lump sums on maturity Total

22 :17:48:35 Long-term insurance business : Analysis of expenses Form 43 Total business / subfund LTBF Non Profit Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year Gross Commission - acquisition Commission - other Management - acquisition Management - maintenance Management - other 15 Total Reinsurance - external Commission - acquisition 21 Commission - other 22 Management - acquisition 23 Management - maintenance 24 Management - other 25 Total 26 Reinsurance - intra-group Commission - acquisition 31 Commission - other 32 Management - acquisition 33 Management - maintenance 34 (86) Management - other 35 Total 36 (86) Net of reinsurance Commission - acquisition Commission - other Management - acquisition Management - maintenance Management - other 45 Total

23 :17:48:35 Long-term insurance business : Linked funds balance sheet Form 44 Total business Units 000 Financial year Previous year 1 2 Internal linked funds (excluding cross investment) Directly held assets (excluding collective investment schemes) Directly held assets in collective investment schemes of connected companies Directly held assets in other collective investment schemes Total assets (excluding cross investment) ( ) Provision for tax on unrealised capital gains Secured and unsecured loans 16 Other liabilities Total net assets ( ) Directly held linked assets Value of directly held linked assets 21 Total Value of directly held linked assets and units held (18+21) Surplus units Deficit units Net unit liability ( )

24 :17:48:35 Long-term insurance business : Revenue account for internal linked funds Form 45 Total business Units 000 Financial year Previous year 1 2 Income Value of total creation of units Investment income attributable to the funds before deduction of tax Increase (decrease) in the value of investments in the financial year Other income Total income Expenditure Value of total cancellation of units Charges for management Charges in respect of tax on investment income Taxation on realised capital gains Increase (decrease) in amount set aside for tax on capital gains not yet realised Other expenditure (10325) Total expenditure Increase (decrease) in funds in financial year (19-29) Internal linked fund brought forward Internal linked funds carried forward (39+49) 39 (757196) (89116)

25 :17:48:35 Long-term insurance business : Summary of new business Form 46 Total business Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year Number of new policyholders/ scheme members for direct insurance business Regular premium business Single premium business 12 Total Amount of new regular premiums Direct insurance business External reinsurance 22 Intra-group reinsurance 23 Total Amount of new single premiums Direct insurance business External reinsurance 26 Intra-group reinsurance 27 Total

26 :17:48:35 Form 47 Long-term insurance business : Analysis of new business Total business Units 000 UK Life / Direct Insurance Business Product code number Number of policyholders / scheme members Amount of premiums Number of policyholders / scheme members Amount of premiums Regular premium non-profit WL/EA OB Product description Regular premium business Single premium business 700 Life property linked single premium 17581

27 :17:48:35 Long-term insurance business : Assets not held to match linked liabilities Form 48 Category of assets 10 Total long term insurance business assets Units 000 Unadjusted assets Economic exposure Expected income from assets in column 2 Yield before adjustment Return on assets in financial year Assets backing non-profit liabilities and non-profit capital requirements Land and buildings 11 Approved fixed interest securities Other fixed interest securities Variable interest securities UK listed equity shares Non-UK listed equity shares 16 2 Unlisted equity shares 17 Other assets Total Assets backing with-profits liabilities and with-profits capital requirements Land and buildings 21 Approved fixed interest securities 22 Other fixed interest securities 23 Variable interest securities 24 UK listed equity shares 25 Non-UK listed equity shares 26 Unlisted equity shares 27 Other assets 28 Total 29 Overall return on with-profits assets Post investment costs but pre-tax 31 Return allocated to non taxable 'asset shares' 32 Return allocated to taxable 'asset shares' 33 24

28 :17:48:35 Long-term insurance business : Summary of mathematical reserves Form 50 Total business / subfund LTBF Non Profit Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year Gross Form 51 - with-profits 11 Form 51 - non-profit Form Form 53 - linked Form 53 - non-linked Form 54 - linked 16 Form 54 - non-linked 17 Total Reinsurance - external Form 51 - with-profits 21 Form 51 - non-profit Form Form 53 - linked 24 Form 53 - non-linked 25 Form 54 - linked 26 Form 54 - non-linked 27 Total Reinsurance - intra-group Form 51 - with-profits 31 Form 51 - non-profit 32 Form Form 53 - linked Form 53 - non-linked 35 Form 54 - linked 36 Form 54 - non-linked 37 Total Net of reinsurance Form 51 - with-profits 41 Form 51 - non-profit Form Form 53 - linked Form 53 - non-linked Form 54 - linked 46 Form 54 - non-linked 47 Total

29 :17:48:35 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Total business / subfund LTBF Non Profit Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members Amount of benefit Amount of annual office premiums Nominal value of units Discounted value of units Other liabilities Amount of mathematical reserves 300 Regular premium non-profit WL/EA OB Level term assurance Decreasing term assurance (2286) 360 Income protection non-profit (guaranteed premiums) Annuity non-profit (PLA) Additional reserves non-profit OB 2386

30 :17:48:35 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Total business / subfund LTBF Non Profit Units 000 UK Life / Reinsurance ceded external Product code number Product description Number of policyholders / scheme members Amount of benefit Amount of annual office premiums Nominal value of units Discounted value of units Other liabilities Amount of mathematical reserves 300 Regular premium non-profit WL/EA OB Level term assurance Decreasing term assurance Income protection non-profit (guaranteed premiums) (3392) Additional reserves non-profit OB

31 :17:48:35 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Total business / subfund LTBF Non Profit Units 000 Overseas / Gross Product code number Product description Number of policyholders / scheme members Amount of benefit Amount of annual office premiums Nominal value of units Discounted value of units Other liabilities Level term assurance Amount of mathematical reserves 330 Decreasing term assurance Income protection non-profit (guaranteed premiums)

32 :17:48:35 Long-term insurance business : Valuation summary of property linked contracts Form 53 Total business / subfund LTBF Non Profit Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members Amount of benefit Amount of annual office premiums Nominal value of units Discounted value of units Other liabilities Amount of mathematical reserves 700 Life property linked single premium Life property linked whole life regular premium Life property linked endowment regular premium - savings Life property linked endowment regular premium - target cash Miscellaneous property linked

33 :17:48:35 Long-term insurance business : Valuation summary of property linked contracts Form 53 Total business / subfund LTBF Non Profit Units 000 UK Life / Reinsurance ceded intra-group Product code number Product description Number of policyholders / scheme members Amount of benefit Amount of annual office premiums Nominal value of units Discounted value of units Other liabilities Amount of mathematical reserves 700 Life property linked single premium Life property linked endowment regular premium - target cash

34 :17:48:35 Long-term insurance business : Unit prices for internal linked funds (Sheet 1) Form 55 Total business Units 000 Fund name Type of fund Net assets Main series Unit management charge Price at previous valuation date Price at current valuation date Change in price during year CAUTIOUS GROWTH LIFE 03 - life - defensive managed fund Series BALANCED GROWTH LIFE 02 - life - balanced managed fund Series SL PELICAN LIFE SP NET 05 - life - UK equity Series (0.23) SL HIGH INCOME LIFE SP NET 05 - life - UK equity Series (1.05) SL UK ALL SHARE LIFE SP NET 01 - life - stock market managed fund Series (0.62) SL INTL GROWTH LIFE SP NET 06 - life - overseas equity Series SLL CAUTIOUS MANAGED FUND LIFE 03 - life - defensive managed fund Series SL STERLING MONEY LIFE SP NET 04 - life - other managed fund Series (0.98) SL MIF MANAGED LINKED LIFE COMPOSITE FUND 04 - life - other managed fund Series ST ANDREWS LIFE BALANCED FUND 02 - life - balanced managed fund Series ST ANDREWS BALANCED INVESTMENT 02 - life - balanced managed fund Series SL GIP DECEMBER 08 LIFE 04 - life - other managed fund Series (1.92) ST ANDREW LIFE FOUNDATION FUND 02 - life - balanced managed fund Series SA GILT &FIXED ASSURANCE 04 - life - other managed fund Series SL GIP JUNE 09 LIFE SINGLE 04 - life - other managed fund Series (1.71) SL GIP MARCH 09 LIFE 04 - life - other managed fund Series (1.41) SL GIP SEPTEMBER 09 LIFE 04 - life - other managed fund Series (1.71) ST ANDREWS OPPORTUNITY LIFE 01 - life - stock market managed fund Series

35 :17:48:35 Long-term insurance business: Analysis of valuation interest rate Form 57 Total business LTBF Non Profit Units 000 Product group 1 Net mathematical reserves Net valuation interest rate Gross valuation interest rate Risk adjusted yield on matching assets UK Life NP Form UK Life NP Form Misc 2386 Total

36 :17:48:35 Long-term insurance business : Distribution of surplus Form 58 Total business / subfund LTBF Non Profit Units 000 Financial year Previous year 1 2 Valuation result Fund carried forward Bonus payments in anticipation of a surplus 12 Transfer to non-technical account Transfer to other funds / parts of funds 14 Subtotal (11 to 14) Mathematical reserves Surplus including contingency and other reserves held towards the capital requirements (deficiency) (15-21) Composition of surplus Balance brought forward Transfer from non-technical account 32 Transfer from other funds / parts of fund 33 Surplus arising since the last valuation Total Distribution of surplus Bonus paid in anticipation of a surplus 41 Cash bonuses 42 Reversionary bonuses 43 Other bonuses 44 Premium reductions 45 Total allocated to policyholders (41 to 45) 46 Net transfer out of fund / part of fund Total distributed surplus (46+47) Surplus carried forward Total (48+49) Percentage of distributed surplus allocated to policyholders Current year 61 Current year Current year Current year

37 :17:48:35 Long-term insurance capital requirement Global business Units 000 LTICR factor Insurance death risk capital component Life protection reinsurance % Gross reserves / capital at risk Net reserves / capital at risk Reinsurance factor LTICR Financial year Form 60 LTICR Previous year Classes I (other), II and IX % Classes I (other), II and IX % Classes I (other), II and IX % Classes III, VII and VIII % Total Insurance health risk and life protection reinsurance capital component Class IV supplementary classes 1 and 2 and life protection reinsurance Insurance expense risk capital component Life protection and permanent 31 0% health reinsurance Classes I (other), II and IX 32 1% Classes III, VII and VIII (investment risk) Classes III, VII and VIII (expenses fixed 5 yrs +) Classes III, VII and VIII (other) 33 1% % 35 25% Class IV (other) 36 1% Class V 37 1% Class VI 38 1% Total Insurance market risk capital component Life protection and permanent 41 0% health reinsurance Classes I (other), II and IX 42 3% Classes III, VII and VIII (investment risk) Classes III, VII and VIII (expenses fixed 5 yrs +) Classes III, VII and VIII (other) 43 3% % 45 0% Class IV (other) 46 3% Class V 47 0% Class VI 48 3% Total Long term insurance capital requirement

38 RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES FINANCIAL YEAR ENDED 31 DECEMBER 2014 NOTES TO THE FORMS *0201* Waiver and modification rules The FSA, on the application of the firm, made a direction under section 148 of the Financial Services and Markets Act 2000 in December The effect of the direction is to modify the provisions of INSPRU R and IPRU(INS) Appendix 9.3 so that a more appropriate rate of interest is used for assets taken in combination." *0301* Form 3 reconciliation of net admissible assets to total capital resources after deductions Total of admissible assets - other than long term business assets Form 13 Line 89 Total of admissible assets - long term business assets Form 13 Line 89 Less: Mathematical reserves, after distribution of surplus Form 14 Line 11 Total other insurance and non-insurance liabilities Form 14 Line 49 Total liabilities - other than long term insurance business Form 15 Line 69 Net admissible assets / total capital resources after deductions Form 3 Line ,655 9,439,500 (9,242,932) (157,124) (195) 695,904 *0310* Details of positive and negative valuation differences '000 Adjustments for Deferred Tax 23,178 23,178 Positive valuation difference in respect of adjustment for Deferred Tax relates to the Deferred Tax Liability on the Deferred Acquisition Costs. *0313* Reconciliation of profit and loss and other reserves to Form 16 Profit and Loss Account and other reserves as at 31 December 2013 Form 3 Line 12 Column 4 Profit and Loss Account and other reserves as at 31 December 2014 Form 3 Line 12 Column , ,956 Movement in Profit and Loss Account and Other Reserves 63,960 Reporting basis difference 41,265 Less Long Term Business Fund loss/ (profit) retained for the financial year 30,150 Profit retained for the financial year - Form 16 Line ,375 *1100* Form has been omitted on account of de minimis limits as per IPRU(INS)Rule

39 RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES FINANCIAL YEAR ENDED 31 DECEMBER 2014 NOTES TO THE FORMS (continued) *1200* Form has been omitted on account of de minimis limits as per IPRU(INS)Rule *1301* & *1308* Aggregate value of certain securities The company held no investments meeting the specified criteria. *1304* & *1310* Set off of amounts Amounts have been set off to the extent permitted by generally accepted accounting principles. *1305* & *1319* Maximum Counterparty Limit The Company s investment guidelines set maximum counterparty limits in order to maintain the admissibility of assets in accordance with INSPRU This is with the exception of approved securities and any holdings under the UCITS Directive, and includes exposures with both approved counterparties and other than approved counterparties. The exposure applies to long term business assets and other than long term business assets combined. There were no occasions during the financial period when limits were exceeded. *1306* & *1312* Amount and nature of exposure at the year end to large counterparties There were no exposures to any counterparty subject to limits in INSPRU R(3) at 31 December 2014 which exceeded 5% of the base capital resource requirement and its long term insurance business liabilities, excluding property linked. *1307 & 1313* Aggregate value of fully secured rights Value of Rights: 33,382,013 This represents the value of derivative assets secured by derivative collateral received from counterparties as disclosed in the financial statements. *1318 SH* Details of other adjustments to assets 000 Balances held as liabilities in the Company accounts (3,627) Other adjustments to assets Form 13 Line 101 (3,627) *1318 * Details of other adjustments to assets Reclassification of unit linked liabilities included in Net Asset Value of unit linked funds on Form 13 Line ,419 Balances held as liabilities in the Company accounts 3,627 Other adjustments to assets Form 13 Line ,046 36

40 RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES FINANCIAL YEAR ENDED 31 DECEMBER 2014 NOTES TO THE FORMS (continued) *1401* Provision for adverse changes No provision for adverse changes under either GENPRU R to GENPRU R or INSPRU R and INSPRU R has been made. The Company considers asset valuations in the context of the requirements of GENPRU R to GENPRU R. The need for a provision for adverse variation is also considered by the Actuarial Function Holder. The Company's mark to model valuations are formally reviewed and signed off to provide additional comfort over robustness. The Company reviews any potential liquidity issues on assets on a regular basis and incorporates valuation adjustments if required. The Company reviews its investments to identify whether any provisions are required pursuant to INSPRU R and INSPRU R. Sufficient cover is held for all positions to match reasonably foreseeable adverse variations and no non-approved derivatives or quasi-derivatives are held. *1402* Details of contingencies and commitments: a) Charges over assets There are no charges over assets. b) Potential capital gains tax liability There is no potential capital gains tax liability should the Company dispose of its assets, based on asset values as at 31 st December c) Contingent liabilities There are no contingent liabilities. d) Guarantees, indemnities or other contractual commitments affected other than in the ordinary course of insurance business and in respect of related companies. There are no such items. e) Other fundamental uncertainties There are no other uncertainties which it is necessary to disclose. *1405* Details of other adjustments to liabilities 000 Reclassification of unit linked liabilities included in Net Asset Value of unit 42,419 linked funds on Form 13 Line 59 Other adjustments to liabilities Form 14 Line 74 42,419 *1501* Provision for adverse changes No provision for adverse changes under either GENPRU R to GENPRU R or INSPRU R and INSPRU R has been made. The Company considers asset valuations in the context of the requirements of GENPRU R to GENPRU R. The need for a provision for adverse variation is also considered by the Actuarial Function Holder. The Company reviews any potential liquidity issues on assets on a regular basis and incorporates valuation adjustments if required. No derivatives are held outside of the long-term business fund. 37

41 RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES FINANCIAL YEAR ENDED 31 DECEMBER 2014 NOTES TO THE FORMS (continued) *1502* Details of contingencies and commitments: a) Charges over assets There are no charges over assets. b) Potential capital gains tax liability There is no potential capital gains tax liability should the Company dispose of its assets, based on asset values as at 31 st December c) Contingent liabilities There are no contingent liabilities. d) Guarantees, indemnities or other contractual commitments effected other than in the ordinary course of insurance business and in respect of related companies. There are no such items. e) Other fundamental uncertainties There are no other uncertainties which it is necessary to disclose. *1601* Basis of conversion of foreign currency Rates of exchange prevailing at the time of the transaction have been used to convert amounts of income and expenditure in foreign currencies. Assets and liabilities denominated in foreign currencies are expressed in sterling at exchange rates ruling at 31 December *1701* Variation margins in the Long Term Business Fund a) The aggregate amount of excess variation margin which has been received is nil. b) Variation margin received is included in Form 13 Line 44. c) Amounts recorded in Form 13 include any liability to repay such assets or equivalent assets. *4002* Details of other income '000 Stock lending income 300 Management fees receivable 527 Renewal commission Unit linked rebates Other income Form 40 Line 15 1,025 38

42 RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES FINANCIAL YEAR ENDED 31 DECEMBER 2014 NOTES TO THE FORMS (continued) *4005* Basis of conversion of foreign currency Rates of exchange prevailing at the time of the transaction have been used to convert amounts of income and expenditure in foreign currencies. Assets and liabilities denominated in foreign currencies are expressed in sterling at exchange rates ruling at 31 December *4008* Provision of management services and name of the party providing such services: Aberdeen Asset Management and Insight Investment Funds Management Limited provided investment management services to the Company during the year. Invista Real Estate Investment Management Limited, a subsidiary of HBOS Insurance & Investment Group Limited provides investment management services in respect of property investments. There are four providers of administration services to the Company in the period: Aviva plc provided certain administration services to the Company. St Andrews Group plc, a wholly owned subsidiary of HBOS plc, provided management services under a management agreement in respect of the creditor insurance business. Vertex provide administration services in respect of the Third Party Agreement on the life business in respect of whole of life policies, term assurance policies, capital investment bond and secure life plan, which are currently in run off. Opal provide administration services in respect of the Third Party Agreement on the life business in respect of whole of life policies. *4009* Material Connected Party Transactions The intercompany transactions which exceeded 5% of the insurer's liabilities arising from the long term business amount, excluding property linked and reinsurance are as follows: Name of connected person Scottish Widows plc Halifax Life ltd Relationship with connected person Fellow group undertaking Fellow group undertaking Amount Description of transaction m 150 Loan 37 Reinsurance arrangement No amounts were written off in the period in respect of debts due to or from connected parties. 39