Making Your Choice

Policyholder Update 4 September 2009

Dear Policyholder,

We have today published a supplementary report from the policyholder advocate, Clare Spottiswoode CBE, about the Aviva reattribution.

The report sets out the details of the work carried out in respect of the Aviva reattribution since the start of the election period (1 June 2009) and following publication of her main report (19 June 2009). It reports on KPMG's review of Aviva's calculation of the value of the inherited estate which will be used to determine policyholders' payments; LECG's analysis of the reattribution offer using updated end 2008 data supplied by Aviva; and the policyholder advocate's review of her guidance to groups of policyholders in the light of the end 2008 data as to whether Aviva's offer is in their interests.

The conclusion reached from the work is that there is no need to give any group of policyholders an opportunity to reconsider their vote.

In respect of policyholder group 1, (regular premium policies with a maturity or surrender date up to and including 2016), 2 (single premium policies with no fixed maturity) and 3 (regular premium policies with a maturity or surrender date between 2017 and 2021, as set out on pages 8, 9 and 10 respectively from the policyholder advocate's guide) there were no significant changes to the guidance that was given in the first instance.

There are more significant changes to policyholder group 4 (regular premium policies with a maturity or surrender date beyond 2021, see page 11 of the guide). However, due to immaterial differences between distributions in later years and the high degree of volatility around break-even years depending on the assumptions made, it is not believed necessary to reissue the guidance.

Other matters included in the report are: a reassessment of the safeguards Aviva is putting in place to protect the value of potential special distributions for policyholders who decide not to accept the offer; other outstanding issues concerning the Scheme and the protection of non-electing policyholders; and KPMG comments on the supplementary reports of the Actuarial Function Holder, the With-Profits Actuary and the Independent Expert. The report describes policyholder communications, identifies questions, objections and complaints about the reattribution from policyholders at roadshows and in correspondence. It also gives the policyholder advocate's answers to these.

You can find the supplementary report by clicking on this link http://www.policyholderadvocate.org/supplementary-report or going to the home page and clicking on the menu tab 'Supplementary report'.

Yours faithfully

Jonathan Haslam

director of communications