FINAL JUDGMENT BY CONSENT

COMMONWEALTH OF MASSACHUSETTS SUFFOLK, SS. SUPERIOR COURT DEPARTMENT OF THE TRIAL COURT ) COMMONWEALTH OF MASSACHUSETTS, ) Plaintiff, ) CIVIL ACTION NO. /3-6) 7W--1-1- 2-- ) TRANSAMERICA LIFE INSURANCE ) COMPANY, ) ) Defendant. ) ) FINAL JUDGMENT BY CONSENT The Court has reviewed the Complaint filed in this case by the Commonwealth of Massachusetts (the "Commonwealth"), the assented-to Motion for Entry of Final Judgment by Consent and the attached Consent. The Court finds that it properly has subject matter jurisdiction of this Complaint and personal jurisdiction over the defendant, Transamerica Life Insurance Company ("Transamerica"), and finds that the entry of this Final Judgment by Consent ("Consent Judgment") is in the interest of justice. WHEREAS, without admission of liability, in order to amicably resolve their differences concerning the Complaint and in order to avoid the cost and uncertainty of litigation, the parties have agreed to the entry of this Consent Judgment; WHEREAS, the Attorney General of the Commonwealth (the "Attorney General") has concluded an investigation into the practices of Transamerica regarding the marketing, sale, 1

issuance and administration of health insurance policies and certificates issued or delivered to Massachusetts residents; WHEREAS, the Attorney General's investigation pertained to allegations that Transamerica engaged in unfair and deceptive acts and practices that harmed Massachusetts consumers by: (1) unfairly or deceptively marketing health insurance plans, (2) offering and issuing health insurance plans to individuals and small groups in violation of M.G.L. c. 176J, and (3) failing to cover, and denying claims for, health benefits and services for Massachusetts residents in violation of statutory mandates; and WHEREAS, the Commonwealth has filed an assented-to motion seeking entry of this Consent Judgment; Accordingly, good cause being shown, IT IS ORDERED THAT: 1. Transamerica is permanently enjoined from: (a) engaging in unfair or deceptive acts or practices in marketing (through groups, associations or otherwise) health insurance policies or certificates of group health insurance coverage through any marketing material presented, distributed or disseminated in Massachusetts in violation of M.G.L. Chapter 93A, 2 (including, without limitation, any marketing material originating outside Massachusetts concerning a product that is not available in Massachusetts, pursuant to applicable Massachusetts law, which may reasonably be expected to be seen or heard in this Commonwealth unless it prominently sets forth a disclaimer that the advertised product is not available to residents of the Commonwealth); (b) marketing, offering, or issuing to any person residing in Massachusetts any health insurance policy or certificate of group health insurance coverage as to which disclosure of not constituting creditable coverage is directed by Massachusetts Division of Insurance 2

Bulletin 2010-7, as it may be hereafter amended, or by any such other formal guidance concerning requirements of disclosure of not constituting creditable coverage within the meaning of M.G.L. c. 111M, 1 as may subsequently be issued by the Massachusetts Division of Insurance, unless all marketing materials and communications relating to such policy or certificate which are made to or made accessible to persons residing in Massachusetts clearly and conspicuously disclose that the policy or certificate does not constitute minimum creditable coverage within the meaning of M.G.L. c. 111M, 1 and, thus, does not enable the Massachusetts resident to satisfy the requirement of M.G.L. c. 111M, 2, to have health insurance that does meet that standard as well as any disclosure required by Massachusetts Division of Insurance Bulletin 2010-7, as it may be hereafter amended, or by any such other formal guidance concerning requirements of disclosure of not constituting creditable coverage within the meaning of M.G.L. c. 111M, 1 as may subsequently be issued by the Massachusetts Division of Insurance; (c) engaging in unfair or deceptive acts or practices in offering or issuing health insurance policies or certificates or riders of group health insurance coverage directly to any person residing in Massachusetts, or through any group or association, unless such policy, certificate or rider complies with the statutory requirements of M.G.L. Chapters 175 47B, 47C, 47D, 47F, 47G, 47H, 47U, 47AA and 110, 176J 5, and 176N 2, 3 as those chapters may be hereafter amended; and (d) marketing, offering, issuing, or administering, including without limitation, through any group or association, any health insurance policy or certificate or rider of group insurance coverage with respect to any person residing in Massachusetts unless such policy, certificate or rider complies, as marketed, offered, issued and administered with respect 3

to any person residing in Massachusetts, with the statutory requirements of M.G.L. Chapters 175 47B, 47C, 47D, 47F, 47G, 47H, 47U, 47AA and 110, 176J 5, and 176N 2, 3, as those chapters may be hereafter amended. 2. Within ten (10) calendar days after the entry of this Consent Judgment, Transamerica shall make the following separate payments to the Office of the Attorney General totaling $580,000 (five hundred eighty thousand dollars) to be made by electronic fund transfer to the Office of the Massachusetts Attorney General to an account or accounts identified by the Commonwealth: a. $250,000 for civil penalties b. $300,000 for the Local Consumer Aid Fund, as established by M.G.L. c. 12, 11G and c. $30,000 for the costs of the investigation. 3. Within ninety (90) calendar days after the entry of this Consent Judgment, Transamerica shall review any fully insured health insurance policies that are in effect at such time, under which certificates or other evidences of coverage (such as an extraterritorial rider) (the "Certificates") have been issued or delivered by Transamerica to any Massachusetts resident insured under a group or individual insurance policy issued by Transamerica within or outside of Massachusetts (an "Insured") to ensure that such Certificates, to the extent that they do not already do so, comply with M.G.L. c. 175 47B, 47C, 47D, 47F, 47G, 47H, 47U, 47AA and 110, 176J, and 176N 2, 3. Each Certificate shall be sufficiently amended or otherwise corrected as necessary so that it does not include any provisions that violate M.G.L. c. 175 47B, 47C, 47D, 47F, 47G, 47H, 47U, 47AA and 110, 176J 5, and 176N 2, 3 or shall be terminated to the extent allowed and pursuant to the procedures required by law and the policies 4

underlying that Certificate. Within ninety (90) calendar days after the entry of this Consent Judgment, Transamerica shall have given any and all required notices of termination as to any Certificates that it chooses to terminate in accordance with this paragraph. Within ninety (90) calendar days after the entry of this Consent Judgment, Transamerica shall have submitted to the Massachusetts Division of Insurance ("DOI") any Certificates and policies to be filed and/or amended to address these issues in accordance with this paragraph. Within (i) sixty (60) calendar days after receiving approval of the amended policies or Certificates by the DOI, if such approval is required by law, or (ii) within ninety (90) days after submitting the policies or certificates if approval of the amended policies or Certificates by the DOI is not required by law, Transamerica shall send copies of the applicable amended Certificate by first-class mail to each then current Insured whose Certificate is affected by this paragraph and shall send an exemplar copy of each form of amended policy and/or Certificate to the Attorney General. Within ninety (90) calendar days after the entry of this Consent Judgment, Transamerica shall submit to the Office of the Attorney General a report signed by a corporate officer attesting that it has performed a reasonably diligent review of its policies as called for in this paragraph and has submitted to the DOI amendments of any policies or Certificates as called for by this paragraph, or that no such policies exist. 4. Within ninety (90) calendar days after the entry of this Consent Judgment, Transamerica shall pay each Insured who was insured under a policy issued by Transamerica that was subject to M.G.L. c. 176J but was not approved by the DOI and with respect to whom (and to whose dependent(s)) no claims were filed, any amount paid by any such Insured for coverage under any such policy adding 5% simple interest from the date of such payment. Each such 5

payment shall be sent by first-class mail to each affected Insured along with a letter, in a form attached hereto as Exhibit A. 5. Within one hundred twenty (120) calendar days after the entry of this Consent Judgment, Transamerica shall have reviewed the claims made under the policies underlying the Certificates for dates of service from September 1, 2007 through the date of entry of this Consent Judgment, shall have paid, to the extent it has not already done so, the full amount of any benefits required by M.G.L. c. 175 47B, 47C, 47D, 47F, 47G, 47H, 47U, 47AA and 110, 176J 5, and 176N 2, 3 plus adding 5% simple interest calculated from the date on which such benefits were payable and shall have sent by first-class mail to any Insured whose claim was reprocessed as described in this sentence an explanation of benefits and a letter, in a form attached hereto as Exhibit B. Within one hundred twenty (120) calendar days after the entry of this Consent Judgment, Transamerica shall submit to the Office of the Attorney General a report signed by a corporate officer attesting that it has (i) performed a reasonably diligent review of claims described in this paragraph, and (ii) reprocessed any such claim that was not properly paid pursuant to M.G.L. c. 175 47B, 47C, 47D, 47F, 47G, 47H, 47U, 47AA and 110, 176J 5, and 176N 2, 3. 6. Within one hundred twenty (120) calendar days after the entry of this Consent Judgment, Transamerica shall pay each Insured who was insured under a policy issued by Transamerica that was subject to M.G.L. c. 176J but was not approved by the DOI and with respect to whom (and/or to whose dependent(s)) a claim was filed, any amount paid by any such Insured for coverage under any such policy adding 5% simple interest from the date of such payment less any claims paid on behalf of that Insured and any dependent(s) (including, but not 6

limited to those paid pursuant to paragraph 5 hereof). Each such payment shall be sent by firstclass mail to each affected Insured along with a letter, in a form attached hereto as Exhibit A. 7. One (1) year after entry of this Consent Judgment, Transamerica shall submit to the Office of the Attorney General a signed report attesting to the total dollar amount of all checks issued in accordance with paragraphs 4-6 of this Consent Judgment and, of that amount, the total dollar amount of all checks that were cashed or deposited. Along with such report, Transamerica shall pay to the Office of the Attorney General any amount by which $750,000 exceeds the amount of all checks issued by Transamerica in accordance with paragraphs 4-6. Checks issued in accordance with those paragraphs that remained uncashed for the applicable length of time under M.G.L. c. 200A shall be considered to be abandoned "property" as defined in M.G.L. c. 200A, 1. Uncashed checks shall be honored by Transamerica until such time as the value of same is surrendered to the state treasurer, pursuant to M.G.L. c. 200A, 8A. Pending such surrender, Transamerica shall comply with all provisions of M.G.L. c. 200A regarding the treatment of unclaimed property, including but not limited to providing the treasurer with all reports required by M.G.L. c. 200A. Transamerica shall, upon request, provide copies of all such reports to the Office of the Attorney General. Nothing in this paragraph limits Transamerica's obligations under paragraphs 4-6 to $750,000. Any payment to the Office of the Attorney General under this paragraph shall be made by check payable to the Commonwealth of Massachusetts, delivered to Emiliano Mazlen, Assistant Attorney General, Office of the Attorney General, Health Care Division, One Ashburton Place, Boston, Massachusetts 02108, and any such payment shall be directed to the Commonwealth's General Fund. 8. Within forty-five (45) calendar days of Transamerica receiving any mailing, notice, letter, form and/or check that it is required to send by this Consent Judgment, including 7

by paragraphs 4-7 hereof ("Mailing"), returned by the U.S. Postal Service because the mailing address was incorrect, Transamerica shall make reasonable efforts to resend such Mailing, which shall include resending any Mailing to any forwarding address provided by the U.S. Postal Service or provided by an address research firm, which may be an on-line service, retained by Transamerica to obtain an updated address for any person whose Mailing is returned by the U.S. Postal Service without a forwarding address. 9. Nothing in this Consent Judgment shall require the Commonwealth, the Office of the Attorney General or an individual that receives a payment from Transamerica pursuant to any of paragraphs 4-6 to pay any amount to Transamerica. 10. Transamerica shall comply with all reasonable inquiries and requests from the Office of the Attorney General regarding the implementation of the terms contained within this Consent Judgment. 11. In accordance with the attached Consent, Transamerica has waived all rights of appeal. Transamerica has also waived the requirements of Rule 52 of the Massachusetts Rules of Civil Procedure with respect to the entry of this Consent Judgment. 12. This Consent Judgment resolves only the allegations and claims raised in the Complaint filed against Transamerica, and does not resolve and shall not be deemed a waiver of any other actual or potential claims the Commonwealth may have against Transamerica or that Transamerica may have against any person other than the Commonwealth. It does not resolve any claims by any party other than the Commonwealth, provided that nothing in this Consent Judgment shall confer a private right of action as to any other party. This Consent Judgment similarly does not resolve any actual or potential claims by the Commonwealth against any other entity, including, but not limited to, any associations or brokers. 8

13. This Consent Judgment represents the entire agreement between the Commonwealth and Transamerica concerning the matters addressed herein. It supersedes any prior agreement, understandings or stipulations between the parties regarding the subject matter hereof and may not be modified except by further order of the Court obtained after reasonable notice to all parties has been provided. 14. Except for purposes of enforcement of this Final Judgment by the Commonwealth or by Court order, no part of the Complaint or this Final Judgment shall be admitted into evidence against Transamerica or any of its parent corporations, subsidiaries, affiliates, officers, directors, employees, predecessors, successors, insurers, reinsurers and assigns. No allegation or assertion of liability or wrongdoing on the part of Transamerica, set forth in either the Complaint or the Final Judgment, shall be treated or construed as an admission of liability or wrongdoing by Transamerica or any of its parent corporations, subsidiaries, affiliates, officers, directors, employees, predecessors, successors, insurers, reinsurers or assigns. 15. Any violation of this Final Judgment by Consent may be punishable by civil or criminal contempt proceedings, or as otherwise provided by law. 16. The Attorney General agrees that, prior to taking any action against Transamerica to enforce this Consent Judgment, the Office of the Attorney General shall provide Transamerica written notice of any suspected violations of this Consent Judgment and a twenty (20) calendar day period to address any such violations, within which period the parties shall make good faith efforts to meet and confer regarding the suspected violations. Any efforts by Transamerica during the twenty (20) calendar day period to address any such violations shall not bar or limit the Office of the Attorney General from taking actions that she deems are necessary to protect 9

the public interest. Nothing in this section shall affect or apply to any action that might be brought by the Attorney General except actions to enforce this Consent Judgment. 17. Any notices or communications required to be transmitted between Transamerica and the Commonwealth pursuant to this Consent Judgment shall be provided in writing by firstclass mail, postage prepaid, and by electronic mail to the parties or successors as follows, unless otherwise agreed in writing. To the Commonwealth of Massachusetts Emiliano Mazlen, Esq. Assistant Attorney General Office of the Attorney General One Ashburton Place Boston, MA 02108 Emiliano.Mazlen@state.ma.us To Transamerica Steven D. Weinberg, Esq. Business Unit General Counsel Transamerica Life Insurance Company 1400 Centerview Drive Little Rock, Arkansas 72211-4350 steven.weinberg@transamerica.com 18. The Superior Court shall retain juisdiction of this case. SO ORDERED, this ev day of, 2013. Justice of the Superior Court 10

CONSENT OF TRANSAMERICA LIFE INSURANCE COMPANY Transamerica Life Insurance Company ("Transamerica"), through its officer and attorney signing below, admits to the continuing jurisdiction of the Superior Court over the persons and subject matter of this action, and consents to the entry of the Final Judgment by Consent regarding the claims between the Commonwealth and Transamerica without trial or adjudication of any issue of fact or law. In so consenting, the officer and attorney of Transamerica signing below certify that they have personally read and understand the Judgment, and represent that they are authorized to enter into this settlement on behalf of Transamerica. Transamerica waives the entry of findings of fact and conclusions of law pursuant to Rule 52 of the Massachusetts Rules of Civil Procedure with respect to the claims between the Commonwealth and Transamerica. The officer and attorney signing below on behalf of Transamerica understand that any violation of this judgment may result in civil or criminal contempt proceedings, penalties pursuant to M.G.L. c. 93A and any additional penalties and sanctions as are provided by law. Neither this consent nor any part thereof shall be treated or construed as an admission of liability or wrongdoing, or admitted into evidence or used for any other purpose except in a proceeding to enforce the terms of this Consent Judgment. Assented to, waiving all rights of appeal: By: Connie H. Whitlock Senior Vice President Operations Transamerica Life Insurance Company 1400 Centerview Drive Little Rock, Arkansas 72211-4350 Dated: AtAdi I, 2013 11

And s attorney ("\ eter S. Rice, Esq. DLA Piper LLP 33 Arch Street, 26 th Floor Boston, Massachusetts 02110-1447 BBO No. 418600 Dated: P') 5, 2013 12

EXHIBIT A [Letterhead of Transamerica Life Insurance Company] [INSURED'S NAME AND ADDRESS] [DATE] Re: Certificate # [INSERT CERTIFICATE #] Dear [INSURED NAME]: Under the terms of a consent judgment with the Office of Massachusetts Attorney General Martha Coakley, you are receiving the enclosed check to refund amounts you paid for coverage under an insurance policy issued by Transamerica Life Insurance Company. You are entitled to the enclosed check without any further action or obligation. The amount of the enclosed refund check was calculated by taking the total amount you paid to obtain your insurance coverage plus 5% interest and subtracting the total amount we paid out on your health care claims (and those of your dependents, if any). If you have any questions, please call [TRANSAMERICA INSERT TELEPHONE NUMBER]. Very truly yours, [TRANSAMERICA REPRESENTATIVE]

EXHIBIT B [Letterhead of Transamerica Life Insurance Company] [INSURED'S NAME AND ADDRESS] [DATE] Re: Certificate # [INSERT CERTIFICATE #] Dear [INSURED NAME]: Under the terms of a consent judgment with the Office of Massachusetts Attorney General Martha Coakley, you are receiving the enclosed check for additional amounts due to you in connection with your coverage under an insurance policy issued by Transamerica Life Insurance Company. You are entitled to the enclosed check without any further action or obligation. The amount of the enclosed check represents your claims (and those of your dependents, if any) made under the Transamerica insurance policy that were reprocessed pursuant to the terms of the consent judgment, adding 5% interest. If you have any questions, please call [INSERT TRANSAMERICA TELEPHONE NUMBER]. Very truly yours, [TRANSAMERICA REPRESENTATIVE]