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Prudential AnnuitiesLimited

Incorporated and Registered in England and Wales Registered number 2554213Registered Office 142 Holborn Bars London EC1N 2NH

Annual FSA Insurance Returns for the year ended31st December 2002

(Appendices 1 I 3 I 4 I 6 )

Prudential Annuities Limited

Year ended 31st December 2002

Contents

Page

Appendix 9.1Form 9 Statement of solvency

Covering sheet to Form 9Analysis of the effect of financial engineering on long-term available assetsStatement of net assetsAnalysis of admissible assetsLong term insurance business liabilities and marginsLiabilities (other than long insurance term business)Profit and loss account (non-technical account)Analysis of derivative contracts

Form 9AForm 10Form 13Form 14Form 15Form 16Form 17

34567

13141516

Appendix 9.3Form 40 Long term insurance business: Revenue accountForm 41 Long term insurance business: Analysis of premiums and claimsForm 42 Long term insurance business: Analysis of claims

Appendix 9.4Form 46 Long term insurance business: Summary of changes in long term businessForm 47 Long term insurance business: Analysis of new ordinary long term businessForm 48 Long term insurance business: Expected income from admissible assets not held to match

liabilities in respect of linked benefitsLong term insurance business: Analysis of admissible fixed interest and variable interestand variable yield securities not held to match liabilities in respect of linked benefits

Appendix 9.6Abstract of the Valuation Report - Rule 9.31

Appendix 9.4Form 51 Long term insurance business: Valuation summary of non-linked contracts (other than

accumulating with-profits policies)Long term insurance business: Valuation summary of index linked contractsLong term insurance business: Analysis of assets and liabilities matching investmentliabilities in respect of index linked benefitsLong term insurance business: Matching rectangleLong term insurance business: Valuation result and distribution of surplusRequired minimum margin.

Form 49

Form 54Form 56

Form 57Form 58Form 60

182022

242628

29

30

40

4244

465051

Appendix 9.6Notes to the RetumDirectors' Certificate - Rule 9.34(a)Appointed Actuary's Certificate - Rule 9.34(b)Auditors' Report - Rule 9.35Additional information on Derivative Contracts - Rule 9.29Additional information on Controllers - Rule 9.30Information on Appointed Actuary - Rule 9.36

52576061646768

Required minimum margin for general insurance business 12 12 49

Excess (deficiency) of available assets over the required13minimum margin (11-12)

Long term insurance business admissible assets 21 13014470 11888099 10 11

Other than long term insurance business assets allocated towards long 22 782878 572322 See instructionsterm insurance business required minimummargin 1 and 3

Total mathematical reserves (after distributionof surplus) 23 12622166 11802004 See instruction 4

Other insurance and non-insurance liabil~ies 24 342304 55922 See instruction 5

Available assets for long term insurance business required minimum25 832878 602495margin (21+22-23-24)

Future profits 31

Zillmerising 32

Hidden reserves 33

Requiredminimummarginforlongterminsurancebusiness 41 504866 472065 60 69

Explic~requiredminimummargin(1/6x 41, or minimum42 84144 78678guarantee fundifgreater)

Excess (deficient? ofavailableassets overexplic~required43 748734 523817minimummargin 2542)

Excess (deficiency)ofavailableassets and implic~itemsover44 328012 130430the requiredminimummargin(34-41)

Quantifiable continQent liabilitiesin respect of other than fang51 See instruction 6term insurance bUSIness as shown in a supplementary note to Form 15

Quantifiable contingent liabilitiesin respect of long term insurance52 See instruction 6business as shown in a supplementary note to Form 14

26032003:16:03:20 Form 9

Statement of solvency

Name of insurer Prudential Annuities Limited

Global business

Financial year ended 31st December 2002Companyregistrationnumber

R9 2554213 £000

GUUKlCM Units

As at the end ofthis financial

year

1 2

cE:J

"5

oGENERAL INSURANCE BUSINESS

Available assets

Other than long term insurance business assets allocated towardsgeneral insurance business required minimum margin 11

See instructions1 and 2

Required minimum margin

LONG TERM INSURANCE BUSINESSAvailable assets

Implicit Items admitted under Rule 2.10(5) as modified

Total of available assets and implic~items (25+31+32+33) 34 832878 602495

Required minimum margin

CONTINGENT LIABILITIES

3

Covering sheet to Form 9


Global business

Financial year ended 31st December 2002

"..".......

............................................................

............................................................

London 26 March 2003

26032003:16:03:20

G M Wood

D J Belsham

T J W Tookey

4

Chief Executive

Director

Director

Form 9

I R9A 2554213I

GLI

31 112I

2002I

£000

As at the end of As at the end ofthis financial the previous Source

year year

1 2

Required minimum margin for long11 504866 See instruction 2term insurance business

Excess (deficiency) of availableassets and implicit items over the 12 328012 See instruction 3required minimum margin

Total available assets and implicit 13 832878items (11+12)

Value of implicit items 14 See instruction 5

Financial reinsurance- ceded 15 See instruction 6

Financial reinsuranceaccepted 16 See instruction 7

Outstanding contingent loans 17 See instruction 8

Any other charges on future profits 18 See instruction 9

Sum of financial engineeringadjustments 19(14+15-16+17+18)

Other assets (13-19) 20 832878

Total available assets and implicititems 21 832878(19+20)

26032003:16:03:20 Form 9A

Analysis of the effect of financial engineering on long-term available assets


Global business

Financial year ended 31st December 2002Companyregistrationnumber GUUKlCM

Period endedday month year Units

Analysed as follows:

5

RiOI

2554213I

GLJ

31 112I

2002I

£000

As at the end of As at the end of Sourcethis financial the previous year c

yearE E

1 2 CD ::J~C (5::J ()

Long term insurance business - admissible assets 11 13014470 11888099 13 . 89 1

Long term insurance business - liabilities and margins 12 13014470 11888099 14 . 59 1

Other than Longterm insurancebusiness- admissibleassets 21 870502 575923 13 . 89 1

Other than Long term insurance business - liabilities 22 87624 3601 15 . 69 1

Net admissible assets (21-22) 23 782878 572322

Unpaidamounts (includingOther assets allowed to share premium)on partly paid 24be taken into account in shares

covering the required Supplementarycontributionsminimum margin for a mutualcarrying on 25general insurancebusiness

Liabilities allowed to be Subordinatedloan capital 26left out of account incovering the required Cumulativepreferenceshare 27minimum margin capital

Available assets (23 to 27) 29 782878 572322

Paid up share capital (other than cumulative51 550000 550000preference share capital)

Amounts included in lines 24 to 27 above 52

Amounts representing the balance of net assets 56 232878 22322

Total (51 to 56) and equal to line 29 above 59 782878 572322

Balance brought forward at the beginning of the61 22322 14346 10 . 56 2financial year

Retained profrt/(Ioss) for the financial year 62 208886 9646 16 . 59 1

Movement in asset valuation differences 63 1670 (1670) See instruction 2

Decrease/(increase) in the provision for adverse64 See instruction 3changes

Other movements (particulars to be specified by65way of supplementary note)

Balance carried forward at the end of the financial year69 232878 22322(61 to 65)

26032003:16:03:20 Form 10

Statement of net assets


Global business



Represented by:

Movement of balance of net assets for solvencypurposes -as per line 56

6

IR13

I

2554213I

GL'31 12

I2002

I

£000I

1

As at the end of As at the end ofthis financial the previous

Investments year year1 2

land and buildings 11

UK insurance Shares 21businessdependants Debt securities issued by, and loans to, dependants 22

Other insurance Shares 23dependants

24Debt securities issued by, and loans to, dependants

Investments in25group undertakings Non-insurance Shares

and participating dependantsinterests Debt securities issued by, and loans to, dependants 26

Shares 27

Other group Debt securities issued by, and loans to, group undertakings 28undertakings andparticipatinginterests Participating interests 29

Debt securities issued by, and loans to, undertakings in 30which the insurer has a participating interest

Total sheet 1 (11 to 30) 39

26032003:16:03:20 Form 13(Sheet 1)

Analysis of admissible assets


Global business


Category of assets Total other than long term business assets

Companyregistrationnumber GUUKlCM


Categoryofassets

7

IR13

I

2554213I

GL 31 12I

2002I

£000I

1

Investments (continued) As at the end of As at the end ofDeposits with ceding undertakings this financial the previousAssets held to cover linked liabilities 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 2947

Approvedsecurities 45 236176 162887Fixed interest

Debt securities and Other 46 82657 105488other fixed incomesecurities Approved securities 47 75433 84245

Variable interest

Other 48 182439 160524Other financialinvestments Participation in investment pools 49

Loans secured by mortgages 50

Loans to public or local authorities and nationalised51industries or undertakings

Other loansLoans secured by policies of insurance issued by the

52company

Other 53

Deposits with Wlihdrawal subject to a time restriction of one month or less 54 1122 1397approved creditinstitutions andapproved financial

Wlihdrawal subject to a time restriction of more than oneinstitutions55month

Other 56

Deposits with ceding undertakings 57

Index linked 58Assets held to match linked liabilities

Property linked 59

Provision for uneamed premiums 60

Claims outstanding 61Reinsurers' share of technical provisions

Provision for unexpired risks 62

Other 63

Total sheet 2 (41 to 63) 69 577827 517488

26032003:16:03:20 Fann 13(Sheet 2)



Global business




Period ended

dd' ItlunD. yecu Units

Categoryofassets

8

I

R13I

2554213I

GLI

31 12I

2002I

£000

I

1

As at the end of As at the end ofDebtors this financial the previousOther assets year year

1 2

Debtorsarising out Policyholders 71of direct insuranceoperations

Intermediaries 72

Salvage and subrogation recoveries 73

Debtors arising outDue from ceding insurers and intermediaries under reinsurance business

74of reinsurance

accepted

operationsDue from reinsurers and intermediaries under reinsurance contracts ceded 75

Due in 12 months or less after the end ofthe financial year 76Due fromdependants

Due more than 12 months after the end of the financial year 77Other debtors

Due in 12 months or less after the end of the financial year 78 68 311Other

Due more than 12 months after the end of the financial year 79

Tangible assets 80

Deposits not subject to time restriction on withdrawal, with approved credit81 286052 52241

Cash at bank and institutions and approved financial institutions and local authoritiesin hand

Cash in hand 82

Other assets (particulars to be specified by way of supplementary note) 83

Accrued interest and rent 84 6555 5883Prepayments and

Deferred acquisition costs 85accrued income

Other prepayments and accrued income 86

Deductions (under rules 4.14(2)(b) and 4.14(3» from the aggregate value of assets 87

Total sheet 3 (71 to 86 less 87) 88 292675 58435

Grand total of admissible assets (39+69+88) 89 870502 575923

Total admissible assets (as per line 89 above) 91 870502 575923

Total assets in excess of the admissibility limits of Appendix 4.2 (as valued in accordance with those92Rules before applying admissibility limits)

Solvency margin deduction for subsidiary undertakings which are insurance undertakings 93

Other differences in the valuation of assets (other than for assets not valued above) 94

Assets of a type not valued above, (as valued in accordance with the insurance accounts rules) 95 1670

Total assets determined in accordance with the insurance accounts rules (91 to 95) 99 870502 577593

26032003:16:03:20 Form 13(Sheet 3)



Global business


Category of assets Total other than long term business assetsCompanyregistrationnumber GUUKlCM


Categoryofassets

Reconciliation to asset values determined In accordance with theInsurance accounts rules

Amounts included in line 89 attributable to debts due from related insurers, other than those undercontracts of insurance or reinsurance 100 7

9

IR13

I

2554213I

GLI

31 12I

2002I

£000I

10


Investments year year1 2

land and buildings 11 269315 164645

UK insurance Shares 21businessdependants Debt securities issued by, and loans to, dependants 22

Other insurance Shares 23dependants

24Debt securities issued by, and loans to, dependants

Investments inShares 25group undertakings Non-insuranceand participating dependants

interests Debt securities issued by, and loans to, dependants 26

Shares 27

Other group Debt securities issued by, and loans to, group undertakings 28undertakings andparticipatinginterests Participating interests 29

Debt securities issued by, and loans to, undertakings in 30which the insurer has a participating interest

Total sheet 1 (11 to 30) 39 269315 164645

26032003:16:03:20 Fonn 13(Sheet 1)



Global business


Category of assets Total long tenn business assets



Categoryofassets

10

IR13

I

2554213I

GL 31 12I

2002I

£000I

10

Investments (continued) As at the end of As at the end of

Deposits with ceding undertakings this financial the previous

Assets held to cover linked liabilitiesyear year

1 2

Equity shares 41

Other shares and other variable yield securities 42 8

Holdings in collective investment schemes 43

Rights under derivative contracts 44 70055 39592

Approved securities 45 2082594 1334520Fixed interest

Debt securities and Other 46 8148299 7928823other fIXedincomesecurities Approved securities 47

Variable interestOther 48 46992

Other financialinvestments Participation in investment pools 49

Loans secured by mortgages 50 282627 290315

Loans to public or local authorities and nationalised 51 5081 5050industries or undertakings

Other loansLoans secured by policies of insurance issued by the

52company

Other 53 50145 55036

Deposits with Withdrawal subject to a time restriction of one month or less 54 4233 39031approved creditinstitutions andapproved financialinstitutions Withdrawal subject to a time restriction of more than one

55month

Other 56

Deposits withceding undertakings 57

Index linked 58 1823112 1796671Assets held to match linked liabUities

Property linked 59

Provision for unearned premiums 60

Claims outstanding 61Reinsurers' share of technical provisions

Provision for unexpired risks 62

Other 63

Total sheet 2 (41 to 63) 69 12513146 11489038

26032003:16:03:20 Form 13(Sheet 2)



Global business


Category of assets Total long term business assets


Period endedday lIIunth yeal Units

Categoryofassets

11

I

R13I

2554213I

GL 31 112I

2002I

£000I

10

As at the end of As at the end ofDebtors this financial the previousOther assets year year

1 2

Debtors arising out Policyholders 71 188 418of direct insuranceoperations Intermediaries 72

Salvage and subrogation recoveries 73

Debtors arising outDue from ceding insurers and intermediaries under reinsurance business 74 17247 6321

of reinsuranceaccepted

operations Due from reinsurers and intermediaries under reinsurance contracts ceded 75

Due in 12 months or less after the end of the financial year 76Due fromdependants

Due more than 12 months after the end of the financial year 77Other debtors

Due in 12 months or less after the end of the financial year 78 7619 16164Other

Due more than 12 months after the end of the financial year 79

Tangible assets 80

Deposits not subject to time restriction on withdrawal,with approved credit 81Cash at bank and institutions and approved financial institutionsand local authoritiesin hand

Cash in hand 82

Other assets (particulars to be specified by way of supplementary note) 83

Accrued interest and rent 84 193768 189146

Prepayments andDeferred acquisition costs 85accruedincome

Other prepayments and accrued income 86 13187 22367

Deductions (under rules 4.14(2)(b) and 4.14(3» from the aggregate value of assets 87

Total sheet 3 (71 to 86 less 87) 88 232009 234416

Grandtotalofadmissibleassets (39+69+88) 89 13014470 11888099

Totaladmissibleassets (as per line89 above) 91 13014470 11888099

Total assets in excess of the admissibility limitsof Appendix 4.2 (as valued in accordance with those92Rules before applying admissibility limits)

Solvency margin deduction for subsidiary undertakings which are insurance undertakings 93

Other differences in the valuation of assets (other than for assets not valued above) 94 4239 2923

Assets of a type not valued above, (as valued in accordance withthe insurance accounts rules) 95

Total assets detennined in accordance with the insurance accounts rules (91 to 95) 99 13018709 11891022

26032003:16:03:20 Form 13(Sheet 3)



Global business


Category of assets Total long term business assetsCompanyregistrationnumber GUUKlCM


Categoryofassets

Reconciliation to asset values determined in accordance with theInsurance accounts rules

Amounts included in line 89 attributable to debts due from related insurers, other than those undercontracts of insurance or reinsurance

100 10 20

12

IR14

I

2554213I

GLI

31 112I

2002I

£000I

10

As at the end of As at the end of Sourcethis financial the previous

year year1 2

Mathematical reserves, after distribution of surplus 11 12622166 11802004 See Instruction 2

Cash bonuses which had not been paid to policyholders prior to end of12 See Instruction3the financial year

Balance of surplus/(valuation deficit) 13 50000 30173 See Instruction4

Long term insurance business fund carried forward (11 to 13) 14 12672166 11832177 See Instruction 5

Claims outstanding whichGross amount 15

had fallen due for paymentReinsurers'share 16before the end of the

financial yearNet (15-16) 17

Provisions for Taxation 21other risks andcharges

Other 22

Deposits received from reinsurers 23

Direct insurance business 31 4429 2199Arising out ofinsurance Reinsurance accepted 32 1616 799operations

Reinsurance ceded 33

Creditors and Secured 34other Debentureliabilities loans

Unsecured 35

Amounts owed to credit institutions 36 224556 4081

Taxation 37 4633 3549Other creditors

Other 38 95329 36667

Accruals and deferred income 39 11741 8627

Provision for adverse changes (calculated in accordance with rule 5.3) 41

Total other insurance and non-insurance liabilities (17 to 41) 49 342304 55922

Excessofthe valueofnet admissibleassets 51 See Instruction 6

Total liabilitiesand margins 59 13014470 11888099

Amounts included in line 59 attributable to liabilities to related companies, 61 2131 5705other than those under contracts of insurance or reinsurance

Amounts included in line 59 attributable to liabilities in respect of property62linked benefits

26032003:16:03:20 Form 14

Long term insurance business liabilities and margins


Global business

Financial year ended 31 st December 2002




Categoryofassets

Amount of any additional mathematical reserves included in line 51 whichhave been taken into account in the appointed actuary's certifICate See Instruction 7

13

I R15I

2554213I

GLI

31 112I

2002I

£000


year year1 2

Provision for unearned premiums 11

Claims outstanding 12

Provision for unexpired risks 13Technicalprovisions

Credit business 14(grossamount) Equalisation provisions

Other than credit business 15

Other 16

Total (11 to 16) 19

Provisions for Taxation 21other risksand charges Other 22

Deposits received from reinsurers 31

Direct insurance business 41

Arising out of insurance operations Reinsurance accepted 42

Reinsurance ceded 43

Secured 44Debenture loans

Creditors Unsecured 45

Amounts owed to credit institutions 46

Taxation 47 79056

Other creditors Recommended dividend 48

Other 49 8568 3601

Accruals and deferred income 51

Total (19 to 51) 59 87624 3601

Provision for adverse changes (calculated in accordance with rule 5.3) [Regulation 6161of the Insurance Companies Regulations 1994]

Cumulative preference share capital 62

Subordinated loan capital 63

Total (59 to 63) 69 87624 3601

26032003:16:03:20 Form 15

Liabilities (other than long term insurance business)

Name of insurer Prudential Annuities limited

Global business

Rnanc~lyearended 31st December 2002Companyregistrationnumber GUUKlCM


Amounts included in line 69 attributable to liabilities to related insurers, other thanthose under contracts of insurance or re insurance 71

14

IR16

I

2554213I

GLI

31 112I

2002 £000

This financial Previous Sourceyear year c:

EE

2Q) ::::J

1 ~c: (5::J ()

Transfer (to)/from the From Form 20 11 20 . 59general insurance businesstechnical account

Equalisation provisions 12

Transfer from the long term insurance business revenue13 255839 40 . 26account

Income 14 26833 25956

Investment incomeValue re-adjustments on

15 22117investments

Gains on the realisation of16 1851 17491investments

Investment management charges,17 484 462including interest

Investment Value re-adjustments oncharges investments 18 22309

Loss on the realisation of19investments

Allocated investment return transferred to the general20 20 . 51insurance business technical account

Other income and charges (particulars to be specified b~21 (151) (164)way of supplementary note)

Profit or loss on ordinary activities before tax29 306005 20512(11 +12+13+14+15+16-17-18-19-20+21)

Tax on profit or loss on ordinary activities 31 97119 10866

Profit or loss on ordinary activities after tax (29-31) 39 208886 9646

Extraordinary profit or loss (particulars to be specified by41way of supplementary note)

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» 49 208886 9646

Dividends (paid and proposed) 51

Profit or loss retained for the financial year (49-51) 59 208886 9646

26032003:16:03:20 Fonn 16

Profit and loss account (non-technical account)


Global business



15

IR17

I

2554213I

GLI

31 12I

2002I

£000I

1

As at the end of this financial year As at the end of the previous yearDerivative contracts

Assets Liabilities Assets Liabilities1 2 3 4

Fixed-interest securities 11

Equity shares 12Futures

Land 13contracts

Currencies 14

Other 15


Equity shares 22

Options Land 23

Currencies 24

Other 25


Equity shares 32Contractsfor Land 33differences

Currencies 34

Other 35 8535 2947 3542

Adjustments for variation margin 41

Total (11 to 41) 49 8535 2947 3542

26032003:16:03:20 Form 17

Analysis of derivative contracts


Global business

Insurance Business

Financial year ended

Other than long term

31st December 2002




Categoryofassets

16

IR17

I

2554213I

GLI

31 12I

2002T

£000I

10

As at the end of this financial year As at the end of the previous year

Derivative contractsAssets Liabilities Assets Liabilities

1 2 3 4


Equity shares 12Futures

Land 13contracts

Currencies 14 4388 1327

Other 15


Equity shares 22,

Options Land 23

Currencies 24

Other 25


Equity shares 32Contractsfor Land 33differences

Currencies 34 4881 28590 1129 9921

Other 35 65174 45338 38463 17348

Adjustments for variation margin 41

Total (11 to 41) 49 70055 78316 39592 28596

26032003:16:03:20 Form 17

Analysis of derivative contracts


Global business

Insurance Business

Financial year ended

Long term

31st December 2002




Categoryofassets

17

,R40

I

2554213I

GLI

31 /12I

2002I

£000I

OBI

99 I 0

The financial Previous yearyear

Items to be shown net of reinsurance ceded1 2

Earned premiums 11 814336 847725

Investment income receivable before deduction of tax 12 781609 749755

Increase (decrease) in the value of non-linked assets brought into account 13 359904 (10030)

Increase (decrease) in the value of linked assets 14

Other income 15 117 9

Total income (11 to 15) 19 1955966 1587459

Claims incurred 21 825240 782745

Expenses payable 22 34897 44237

Interest payable before deduction of tax 23 1 50

Taxation 24

Other expenditure 25

Transfer to (from) non technical account 26 255839

Total expenditure (21 to 26) 29 1115977 827032

Increase (decrease) in fund in financial year (19-29) 39 839989 760427

Fund brought forward 49 11832177 11071750

Fund carried forward (39+49) 59 12672166 11832177

26032003:16:03:20 Form 40

Long term insurance business: Revenue account


Global business

Ordinary insurance business


Name and number of fund/Summary Summary


Period endedday month year Units OB/IB

No of No offundi part ofSummary Fund

18

I

R40I

2554213I

GLI

31 /12I

2002I

£000

I

OBI

1I

0

The financial Previous yearyear

Items to be shown net of reinsurance ceded1 2

Earned premiums 11 814336 847725

Investment income receivablebeforedeductionoftax 12 781609 749755

Increase (decrease) in the value of non-linked assets brought into account 13 359904 (10030)

Increase (decrease) in the value of linked assets 14

Other income 15 117 9

Total income (11 to 15) 19 1955966 1587459

Claims incurred 21 825240 782745

Expenses payable 22 34897 44237

Interest payable before deduction of tax 23 1 50

Taxation 24

Other expenditure 25

Transfer to (from) non technical account 26 255839

Total expenditure (21 to 26) 29 1115977 827032

Increase (decrease) in fund in financialyear (19-29) 39 839989 760427

Fund brought forward 49 11832177 11071750

Fund carriedforward (39+49) 59 12672166 11832177

26032003:16:03:20 Fonn 40

Long term insurance business: Revenue account


Global business



Name and number of fund/Summary Ordinary Branch Long Term 1


Period endedday month year Units OBIIB


19

IR41

I

2554213,

GL 31 12I

2002,

£000I

OB 99I

0

Gross Payable to or Net ofrecoverable from reinsurance

reinsurers (1-2)1 2 3

Lifeassurance and Single premium 11general annuitycontracts Regular premium 12

Pension business Single premium 13 814336 814336contracts

Regular premium 14

Permanenthealth Single premium 15

Earned contractspremiums in Regular premium 16

the financialSingle premium 17year

Other contractsRegular premium 18

Single premium 19 814336 814336Totalpremiums

Regular premium 29

Totalpremiumsat UK contracts 31 814336 814336lines19and 29attributable to Overseas contracts 32

Commission payable in connection with41 50 50acquisition of business

Other commission payable 42

Management expenses in connection with43 11254 11254

Expenses acquisition of businesspayable in Management expenses in connection withthe financial maintenance of business 44 11199 11199year

Other management expenses 45 12394 12394

Total expenses (41 to 45) 49 34897 34897

Totalexpenses at UK contracts 51 34897 34897line 49 attributableto

Overseas contracts 52

26032003:16:03:20 Form 41

Long term insurance business: Analysis of premiums and expenses


Global business


Rnancialyearended 31st December 2002



Period endedday month year Units oene


20

IR41

I

2554213I

GL 31 12I

2002I

£000I

OB 1I

0

Gross Payable to or Net ofrecoverable from reinsurance

reinsurers (1-2)1 2 3

Lifeassurance and Single premium 11general annuitycontracts Regular premium 12

Pension business Single premium 13 814336 814336contracts

Regular premium 14

Permanenthealth Single premium 15

Earned contractspremiums in Regular premium 16

the financial17year Single premium

Other contractsRegular premium 18

Single premium 19 814336 814336Totalpremiums

Regular premium 29

Totalpremiumsat UK contracts 31 814336 814336lines 19and 29attributable to Overseas contracts 32

Commission payable in connection with41 50 50acquisition of business

Other commission payable 42

Management expenses in connection with43 11254 11254

Expenses acquisition of businesspayable in

Management expenses in connection withthe financial 44 11199 11199year maintenance of business

Other management expenses 45 12394 12394

Total expenses (41 to 45) 49 34897 34897

Totalexpenses at UK contracts 51 34897 34897line49 attributableto


26032003:16:03:20 Form 41

Long term insurance business: Analysis of premiums and expenses


Global business






No offundiSummary

No ofpart of

und

21

IR42

I

2554213I

GL 31 12) 2002I

£000I

OB

I99 0

Gross KecoveraDle Net otfrom reinsurers reinsuranceClaims incurred in the financial year (1-2)

1 2 3

On death 11

By way of lump sums on maturity 12

By way of annuity payments 13Lifeassurance By way of payments arising from other

14and annuity insured eventscontracts

On surrender or partial surrender 15

Total life assurance and annuity19claims (11 to 15)

On death 21 1286 1286

By way of lump sums on vesting 22 1581 1581Pensionbusiness By way of vested annuity payments 23 815619 326 815293contracts

On surrender or partial surrender 24 7080 7080

Total pension business claims (21 to 24) 29 825566 326 825240

By way of lump sums 31Permanenthealth By way of periodical payments 32contracts

Total permanent health claims (31+32) 39

By way of lump sums 41Other By way of periodical payments 42contracts

Total claims (41+42) 49

Total claims (19+29+39+49) 59 825566 326 825240

Total claims at line UK contracts 61 825566 326 82524059 attributable to


26032003:16:03:20 Form 42

Long term insurance business: Analysis of claims


Global business






Noot Nootfundi part ofSummary Fund

22

I

R42I

2554213I

GL 31 12I

2002I

£000I

OBI

1 0

(jross t<ecoverable Net offrom reinsurers reinsurance

Claims incurred in the financial year (1-2)1 2 3

On death 11

By way of lump sums on maturity 12

By way of annuity payments 13Lifeassurance By way of payments arising from other

14and annuity insured eventscontracts

On surrender or partial surrender 15

Total life assurance and annuity19claims (11 to 15)

On death 21 1286 1286

By way of lump sums on vesting 22 1581 1581Pensionbusiness By way of vested annuity payments 23 815619 326 815293contracts

On surrender or partial surrender 24 7080 7080

Total pension business claims (21 to 24) 29 825566 326 825240

By way of lump sums 31Permanenthealth By way of periodical payments 32contracts

Total permanent health claims (31+32) 39

By way of lump sums 41Other By way of periodical payments 42contracts

Total claims (41+42) 49

Total claims (19+29+39+49) 59 825566 326 825240

Total claims at line UK contracts 61 825566 326 82524059 attributable to


26032003:16:03:20 Form 42

Long term insurance business: Analysis of claims


Global business





Period endedday month year Units OBIIB


23

IR46

I

2554213I

GlI

31 /12I

2002I

£000I

UKI

NL

Lifeassurance and general Pensions business Permanent health Other businessannuity

No of Annual No of Annual No of Annual No of Annualcontracts premiums contracts premiums contracts premiums contracts premiums

1 2 3 4 6 6 7 8

In force at beginning of year 11 544134

New business and increases 12 46824

Net transfers and other13 2385alterations 'on'

Total 'on' (12+13) 19 49209

Deaths 21 16160

Other insured events 22

Maturities 23

.Surrenders 24

Forfeitures 25

Conversions to paid-up26policies for reduced benefits

Net transfers, exeiries and27other alterations off'

Total 'off' (21 to 27) 29 16160

In force at end of year39 577183(11+19-29)

26032003:16:03:20 Form 46long term insurance business: Summary of changes in ordinary long term business


Global business

United Kingdom business

Non-linked



Period endedday month year Units UKlOS NULN

24

IR46

I

2554213I

GLI

31 /12I

2002I

£000I

UKI

LN

Lifeassurance and general Pensions business Permanent health Other businessannuity

Noof Annual Noof Annual Noof Annual Noof Annualcontracts premiums contracts premiums contracts premiums contracts premiums

1 2 3 4 6 6 7 8

In force at beginning of year 11 32320

New business and increases 12 1586

Net transfers and other13 390alterations 'on'

Total 'on' (12+13) 19 1976

Deaths 21 950

Other insured events 22

Maturities 23

Surrenders 24

Forfeitures 25

Conversions to paid-up26policies for reduced benefits

Net transfers, expiries and27other alterations 'off

Total 'off (21 to 27) 29 950

In force at end of year39(11+19-29) 33346

26032003:16:03:20 Form 46

Long term insurance business: Summary of changes in ordinary long term business


Global business


Linked



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26032003:16:03:20 Form 48

Long term insurance business: Expected income from admissible assets not held to match liabilities in respect oflinked benefits .

Name of insurer

Global business

Financi~yearended

Category of assets

Type of asset

Land and buildings

Fixed interestsecurities

Variable interestand variable yieldsecurities(excluding itemsshown at line 16)

Prudential Annuities Limited

31st December 2002

Total long term business assets

Approved securities

Other

Approved securities

Other

Equity shares and holdings in collective investmentschemes

Loans secured by mortgages

All other assets

Total (11 to 19)

Producing income

Not producing income

Companyregistrationnumber

2554213

GUUKlCMPeriod ended

day month year UnitsCategoryof assets

GL 10

Value ofadmissible

assets as shownon Form 13

1

Expectedincome fromadmissible

assets2 3

11 5.84

12 4.92

13 6.29

14

15 47647 2249 4.91

16

17 285386 21713 6.62

18 129514 5.2516

19 37613

29 11191358 5.96

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PRUDENTIAL ANNUITIES LIMITED

SCHEDULE 4

Valuation Report on Prudential Annuities Limited as at 31 December 2002

1. Date of investigation

The investigation relates to 31 December 2002.

2. Date of previous investigation

The previous investigation related to 31 December 2001.

3. Conformity with Rule 5.6

The valuation of long term insurance business liabilities shown in this reportconforms with Rule 5.6 of the Interim Prudential Sourcebook for Insurers.

4. Description of non-linked contracts

(1) (c) Categories of in force non-linked business are as follows:

(i) Annuities in payment

These are non-profit annuities, written on either a single life or joint lifeand last survivor basis, which provide a level series of paymentsthroughout the life of the annuitant(s), or incorporate a provision forpayments to increase annually at a guaranteed rate. The annuity mayincorporate a minimum guaranteed period of payment and may beenhanced where the policyholder suffers from a range of medicalconditions that have an adverse impact on life expectancy.

(ii) Deferred annuities

These are non-profit deferred annuities, written on either a single life orjoint life and last survivor basis, which are either single premium or fullypaid-up contracts. Benefits are expressed as amounts of deferred annuityper annum payable at retirement. The benefit at retirement may be a levelseries of payments throughout the life of the annuitant(s), or incorporate aprovision for payments to increase annually at a guaranteed rate. Theannuity may incorporate a minimum guaranteed period of payment startingat retirement. On death before the end of the deferred period, a lump sumor dependant's annuity may be payable.

30

Valuation Report as at 31 December 2002 (continued)

5. Description of linked contracts.

(1) (a) RPI-linked annuities.

(b) These contracts are classified as:United Kingdom pensions business;Business is written directly, and reassurance is accepted and ceded.Non-profit annuities in payment and in deferment.

(c) These are all single premium contracts.

(d) These are non-profit annuities, written on either a single life or joint lifeand last survivor basis, which provide a series of payments throughout thelife of the annuitant(s) and which are revalued, annually, in line with theRetail Price Index. In some cases the annuity may incorporate a minimumguaranteed period of payment, the revaluation may have a maximumand/or minimum percentage increase, and the annuity may be enhancedwhere the policyholder suffers from a range of medical conditions thathave an adverse impact on life expectancy.

(e) There are no guaranteed investment returns other than those implicit in theguaranteed annuity benefit.

(t) The guaranteed annuity benefit is calculated incorporating an allowance forinitial and renewal expenses and commission.

(g) Not applicable.

(h) Not applicable.

(i) See (d) above.

G) None.

(k) The contract was open to new business during the year to the valuationdate.

(1) Not applicable.

(2) No linked contract contains a with-profits option.

(3) Not applicable.

(4) Not applicable.

(5) Not applicable.

(6) Not applicable.

31


6. Valuation principles and methods

(1) The mathematical reserve for annuities in payment is the present value of theannuities.

The mathematical reserve for RPI-linked annuities is, in general, determinedwithout an explicit allowance for future increases in annuity payments, which isconsistent with the treatment of the matching assets. The treatment ofRPI-linked annuities which are subject to maximum and minimum percentageannual increases are described in 6(1)(h) below.

The mathematical reserve for non-profit deferred annuities is the present valueof the annuity secured to date.

In particular, the following principles have been observed:

(a) Derivative contracts as at 31 December 2002 comprised:i) Contracts to swap US dollars for UK sterling LIBOR plus a fixed

margm;Contracts to swap UK sterling LIBOR for fixed UK sterling;Contracts to swap fixed UK sterling for UK sterling LIBORContracts to swap fixed US dollars for fixed UK sterlingContracts to swap fixed US dollars for US dollar LIBORContracts to swap US dollar LIBOR for UK sterling LIBORContracts to swap fixed Euros for fixed UK sterlingCurrency forward contracts to exchange Euros into UK sterlingContracts to swap future income increasing at a fixed rate each yearfor income varying in line with changes in RPIILPI

ii)iii)iv)v)vi)vii)viii)ix)

The effect of the contracts under i), ii), iv), v) and vi) is to convertcashflows from US dollar denominated bonds into fixed UK sterlingcashflows.

The effect of the contracts under iii) combined with contracts under ii) is tolengthen the duration of fixed UK sterling cashflows.

The effect of the contracts under vii) and viii) is to convert cashflows fromEuro denominated bonds into UK sterling cashflows.

The effect of the contracts under ix) is to convert fixed UK sterlingcashflows into RPI / LPI linked UK sterling cashflows.

The cashflows involved in these arrangements were included in theaggregate cashflows from the portfolio, to give the aggregate yield on theportfolio. This is in accordance with a waiver under section 148 of theFinancial Services and Markets Act 2000 which was originally issued inDecember 1995 as a section 68 order under the Insurance Companies Act1982.

32


(b) Not applicable.

(c) The net premium method has not been used.

(d) There are no contracts where negative values could arise.

(e) No reserve for future bonuses is required.

(t) No provision for any prospective liability for tax on unrealised capitalgains has been included in the mathematical reserves since the Companytransacts pension business only and no capital gains tax liability is expectedto arise.

(g) Not applicable.

(h) As described in 5(1)(d), some RPI-linked annuities are subject to maximumand minimum percentage increases. These fall into two categories:(1) RPI -linked annuities subject to a minimum annual increase of 0%

and a maximum annual increase of 5%. For valuation purposes theseare treated as being identical to normal RPI-linked annuities.

(2) RPI-linked annuities subject to a minimum annual increase of 2.5%and a maximum of 5%. For valuation purposes these are treated asannuities with fixed 5% annual increases. They are included in thesereturns as linked business. Thus, in particular, Form 56 includessufficient fixed interest assets to match the corresponding liabilities.

(i) The additional reserve includes £8,000,000 in respect of counterparty risksin connection with derivative contracts. The reserve is assessed based oncounterparty exposure limits and arrangements for the use of collateral.The additional reserve also includes allowance for general contingencies.

(2) Not applicable.

7. Interest, mortality bases, resilience, etc.

(1)

(2)

(3)

See Forms 51 and 54 and notes to these forms. The '+3' in mortality bases Band C refers to a 3 year addition to the age. Enhanced annuities are valuedusing the tables specified in note 5102, but include a policy specific ageadjustment to the mortality rate used.

The mortality tables used are published tables.

All business is written in the UK and UK-based mortality tables have beenused.

33


(5)

(6)

(4) Annuities are generally valued using a percentage of the 92 series (year ofbirth) tables for annuitants and pensioners. The percentage is selected so thatthe valuation makes allowance for future mortality improvement at a faster ratethan that implicit in the underlying tables. The resulting effective rate of futuremortality improvement assumed is in line with the revised mortality datapublished by the Continuous Mortality Investigation in November 2002. Forsome annuity contracts in deferment, a calendar year table is used; for thesecontracts a further deduction of 0.35% from the valuation rate of interest of5.38% has been made during the deferred period, to allow for expectedmortality improvements prior to vesting.

No allowance is made or reserve held, in addition to the assumptions in 7 (4)above, in respect of possible changes in the incidence of disease ordevelopment in medical science.

The scenarios tested were:

(a) an immediate decrease of 1 percentage point in the rates of interestobtainable on fixed interest securities, an immediate decrease of 25% inreal yields on index-linked stocks and an immediate fall in property valuesof 15%.

(b) an immediate increase of 2 percentage points in the rates of interestobtainable on fixed interest securities, an immediate increase of 25% in realyields on index-linked stocks and an immediate fall in property values of15%.

Scenario (a) was the more onerous

As the effect of the derivatives described in 6 (1) (a) i) and iv) is to producefixed UK sterling cashflows, irrespective of future exchange rates, the scenarioshave been tested against the aggregate yield of the US dollar assets and theirassociated derivatives, using the methodology of the 148 waiver (originallyissued as a section 68 order in December 1995).

Similarly, the effect of the swap contracts described in 6 (1) (a) ix) is to produceRPI / LPI linked sterling cashflows, and the scenarios have been tested againstthe aggregate yield of the non linked assets and their associated swap contracts.

(7) The reserve required under Rule 5.17(a) of the Interim Prudential Sourcebookfor Insurers is calculated by projecting:

i) the risk adjusted cashflows from the assets held, including the assets backingthe additional reserve held under rule 5. 17(a), and

34

(a) Not applicable.

(b) See Form 51.

(c) Not applicable.

(d) Not applicable.


ii) the future liability payments on the valuation assumptions.

The cash-flow projection shows that there is an excess of income over outgo inthe earlier years. These amounts are assumed to be invested in cash andaccumulated to meet the shortfall of asset income in later years. The cashinvestment rate is assumed to be 4.00%. In later years, where outgo exceedsincome, the cash borrowing rate is assumed to be 6.00%. The additional reserveis set so that all liability cash-flows can, on these assumptions, be met as theyfall due.

A total reserve of £120,000,000 was held at 31 December 2002.

(8) (a) Valuation rates of interest are adjusted as shown in Form 57. No otherassumptions are changed.

(b) Assets are hypothecated to liabilities as shown in Form 57. The yields onassets shown in Form 57 have been adjusted by 0.45% and 0.35% to allowfor defaults on fixed interest and RPI-linked assets respectively.

(c) Under the scenario which produces the most onerous requirement:

(i) the aggregate amount of the long term liabilities increased by£1,212,908,000 after allowing for the release of the mismatchingreserve described in 7(7) above.

(ii) the aggregate amount of the assets backing these liabilities increasedby £1,265,044,000.

Hence the reserve shown in 7(7) is adequate to cover the provision required inrespect of Rules 5.17(a) and 5. 17(b).

(9) Liabilities are all in sterling. There are some US dollar and Euro denominatedassets; these assets with their associated derivatives produce income in UKsterling. See 6(1)(a) for details.

8. Valuation of non linked business

35


9. Valuation of linked business

(a) See Form 54 and 6 (1) above.

(b) The annuity loadings in 10 (1) are calculated without assuming any contributionfrom the loadings in new business written after the valuation date.

10. Expenses

(2)

(3)

(4)

(1) A real discount rate of 2% p.a. is used to convert prudent per policy renewalexpenses into percentage of annuity loadings.

For immediate annuities, the implicit per policy loadings at the end of 2002,before inflation, were approximately £19 p.a.

Deferred annuities costs were assumed to be £5 p.a. per life during defermentand then as for immediate annuities in possession.

Investment management expenses are allowed for by deducting 0.1% p.a. fromthe valuation rates of interest. The valuation rates of interest in Forms 51, 54and 57 (and the asset yields in Forms 48 and 57) are shown before thisdeduction.

Outgo on property maintenance costs and leases is allowed for directly in thevaluation rates of interest used (and the assets yields shown in Forms 48 and 57are shown after this deduction).

Based on the annualised annuity amounts in payment and deferment at 31December 2002, the amount released to meet renewal expenses in 2003 will be£16,747,000. In addition, £12,753,000 will be released to meet investmentmanagement expenses (excluding outgo on property maintenance costs andleases).

New business premium rates incorporate a charge to cover acquisition and set-up costs. The annuity loadings in 10 (1) are calculated without assuming anycontribution from the loadings in new business written after the valuation date.

An allowance for expenses arising from closure to new business, if closureoccurred twelve months after the valuation date, has been compared with themargins in expense loadings arising from the in force business. As the costs arecovered by the margins, no additional reserve is required.

11. Currency matching

(1)

(2)

Not applicable.

Not applicable.

36


12. Reinsurance

Long term business is reassured on a facultative basis to a reinsurer who is authorisedto carry on business in the UK.

13. to 16. Not applicable.

17. Changes in long term business

See Form 46.

Group non-profit deferred annuities are not included in Form 46. These consist of1,405 schemes covering an estimated 72,888 lives, and 16,776 individual arrangementsfor non-linked contracts and 13,156 individual arrangements for linked contracts at 31December 2002.

18. New business

See Form 47

19. Assets covering long term liabilities

(1) See Forms 48 and 49. The yield shown for land and buildings in line 11 ofForm 48 is net of expected outgo on maintenance costs and leases. Thistreatment is consistent with that adopted on Form 57. Similarly in Form 40 theoutgo on property maintenance costs and leases is deducted from investmentincome. The outgo on property maintenance costs and leases amounted to£O.3m.

(2) Changes in the amounts reported on Form 48 at 31 December 2002 whichwould result from the exercise of rights or obligations under derivativecontracts or contracts having the effect of derivative contracts (assuming thatoptions would be exercised only if it would be prudent to do so) are as follows:

Form 48 Column 1£000' s

(78,316)(78,316)

Column 2£000' s

2,9352,935

Column 3%1.130.04

Line 18Line 29

(3) Corresponding changes which would result from the exercise of all rights orobligations under derivative contracts, or contracts having the effect ofderivative contracts are as follows:

Form 48 Column 1£000' s

(78,316)(78,316)

Column 2£000' s

2,9352,935

Column 3%1.130.04

Line 18Line 29

37


(4) The maximum changes to the amounts if the conditions in (2) and (3) above hadapplied at any time during the year as follows:

Form 48 Column 1Conditions noted in (2) Conditions noted in (3)

£OOO's £OOO's(26,880) (26,880)Line 18

20. Valuation Summaries

See Forms 51 and 54.

On Form 54 the figures shown in column 7 are the amounts of annuity per annum inpayment; the figures in columns 11 and 12 are the total net liability includingallowance for future mortality and expenses.

21. Matching Rectangle

(1) See Form 57.

(2) Aggregate yields have been adjusted by 0.45% and 0.35% to allow for potentialdefaults within the fixed interest and RPI-linked portfolios respectively.

The default allowance is determined from data supplied by our investmentmanager, which itself is based upon research carried out by one of the majorrating agencies. This analysis, based on actual default experience over a 30 yearperiod, produces mean default rates according to credit quality and term toredemption. Volatility is also analysed and standard deviations of the rates foreach credit quality are provided.

In the event of default it may be possible to recover some capital, especially ifthe loan is secured. The allowance for recovery (or partial recovery) of the loanvaries according to the level of security and the following recovery rates areassumed:

First Mortgage Debenture/Senior SecuredSenior UnsecuredSubordinated DebtPreference Shares

75%45%20%

0%

To calculate the overall default provision, the corporate bond portfolio isbroken down according to credit rating and level of security. The default ratefor each group is assumed to be 150% of the appropriate mean default rate plustwo standard deviations, reduced by the expected recovery. The derived defaultrates for each group are set out below:

38

AAA AA A BBB BBSeniority and lowerFirst Mortgage Debenture/ 4.5 13.5 13.5 41.8 238.2Senior SecuredSenior Unsecured 10.5 31.2 30.6 88.6 518.7Subordinated Debt 15.0 44.7 44.1 126.6 754.2Preference Shares 18.0 55.5 54.0 157.3 941.7


Default rates - basis points per annum:

Regard is also paid to the yield differential between corporate and governmentbonds, and prevailing economic circumstances. Additional allowance forcounterparty risks in connection with derivative contracts is included in theadditional reserve described in 6(1)(i). The yields shown in Form 48 column 3were calculated using the method of the section 148 waiver (the December1995 section 68 order). The aggregate yields on the portfolio using the methodof the section 148 waiver were also used to derive the valuation rates of interestin Form 57 Row 31.

(3) The yield on property is the lower of the current rental yield and the"redemption yield", which is the interest rate at which the market value equateswith the present value of future rental income and the disposal value, inaccordance with the section 148 waiver (previously issued as a section 68 orderin December 1995). No allowance is made for any non-contractual increases inrental income. As an allowance for the risk of falls in value the disposal value istaken as 75% of the current market value. In Form 57 a further deduction ismade to allow for the risk of default of rent. This deduction is the same as forfixed interest investments, as described in 21(2) above.

22. Valuation results

See Form 58.

23. Required minimum margin

See Form 60.

D J Belsham, Appointed Actuary

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£000I

UKI

11

Name of index Value of assets Gross derivativelink or liabilities value

Type of assets and liabilities1 2 3

Land and buildings RPI 9046

Rights under derivative contracts RPI (23389) (23389)

Government and public body non-linked bonds RPI 177079

Corporate non-linked bonds RPI 597723

Government and public body index linked bonds RPI 154584

Corporate index linked bonds RPI 871139

Public or local authority and nationalised industry loan RPI 171

Loans secured by mortgages RPI 9493

Other loans RPI 1684

Deposits with approved credit institutions RPI 142

Accrued interest and rent RPI 25440

Form 56(Sheet 1)

Long term insurance business: Analysis of assets and liabilities matching investment liabilities in respect of index linkecbenefrts

26032003:16:03:20


Global business



11: Global Business (Issued in the United Kingdom)Category of surplus



CategoryUKlOS of Surplus

44

Type of assets and liabilities1 2 3

Sub total assets 1846501

Sub total liabilities (23389)

Sub total net assets 1823112

Form 56(Sheet 2)

Long term insurance business: Analysis of assets and liabilities matching investment liabilities in respect of index linkecbenefits .

26032003:16:03:20


Global business


Rnan~alyearended 31st December 2002

Category of surplus 11: Global Business (Issued in the United Kingdom)


Period endedday month Units

CategoryUKlOS of Surplus

2554213 11

Total assets

Total liabilities

Net total assets 182311

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Category of surplus 11: Global Business (

I I I /31 /12 2002

I

£000I

11Issued in the United R58 2554213 GLKingdom)

Fund carried forward 11 12672166

Bonus payments made to policyholders in anticipation of a surplus 12

Transfers out of fund/ Transfer to non-technical account 13 255839parts of fund

Transfer to other funds/parts of funds 14

Net transfer out of funds/parts of funds (13+14) 15 255839

Valuation result Total (11+12+15) 16 12928005

Mathematical reserves for accumulating with profit policies 17

Mathematical reserves for other non linked contracts 18 10765889

Mathematical reserves for property linked contracts 19

Mathematical reserves for index linked contracts 20 1856277

Total (17 to 20) 21 12622166~UrpIUSmClualngcommgencyana otner reserves nela towarasme

29 305839solvency margin (deficiency)(16-21)

Balance of surplus brought forward unappropriated from last valuation 31 30173

Transfers into fund/part Transfer from non-technical account 32of fund

Composition of Transfer from other funds/parts of fund 33surplus

Net transfer into fund/part of fund (32+33) 34

Surplus arising since the last valuation 35 275666

Total (31+34+35) 39 305839

Bonus payments made to policyholders in anticipation of a surplus 41

Cash bonuses 42

Allocated to Reversionary bonuses 43policyholders by way of

Other bonuses 44

Distribution of Premium reductions 45surplus

Total allocated to policyholders (41 to 45) 46

Net transfer out of fund/part of fund 47 255839

Total distributed surplus (46+47) 48 255839

Balanceof SU~IUS(includingcontingency and other reservesheld 49 50000towards the so vency margin) carried forward unappropriated

Total (48+49) 59 305839

Percentage of distributed surplus allocated to policyholders of fund/part of fund 61

Corresponding Latest (year of valuation 2001 ) 62percentage atthre~ immediately Earlier (year of valuation 2000 ) 63prevIousvaluations

Earliest (year otvaluation 1999 ) 64

26032003:16:03:20 Form 58

Long term insurance business: Valuation result and distribution of surplus


Global business

Financial year ended 31st December 2002 Companyregistrationnumber GUUKlCM


Categoryof surplus

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51


Returns for the year ended 31 December 2002

Supplementary notes to the returns

Fonn 9

*0901 * Section 148 waivers and Section 68 orders

(a) The Secretary of State, on the application of the Company, made an order on1 August 1992 pursuant to section 68 of the Insurance Companies Act 1982directing that section 31 of the Insurance Companies Act 1982 should notapply to the Company in respect of transactions entered into by theCompany with The Prudential Assurance Company Limited, Prudential(AN) Limited and Prudential Pensions Limited pursuant to the reassuranceagreements dated 1 August 1992.

(b) The Secretary of State, on the application of the Company, issued to theCompany in December 1995 an Order under section 68 of the InsuranceCompanies Act 1982 requiring the Company to calculate the rates of interestto be used in calculating the present value of future payments by or to theCompany on the aggregate yield basis defined as that rate of interest whichequates the discounted value of the aggregate cash flows on the relevantasset portfolio with the total market value of that portfolio.

The Section 68 orders granted in December 1995 and August 1992 under the InsuranceCompanies Act 1982 (as amended) continue to have effect under the transitionalarrangements set out in the Supervision Manual. Section 31 of the Insurance CompaniesAct 1982, referred to above, now exists as Rule 3.4 of the Interim Prudential Sourcebookfor Insurers.

52

2002 2001£' OOOs £'OOOs

870,502 577,593(87,624) (3,601)782,878 573,992

1,103,984 946,852

383,008 485,3624,239 2,925

(116,141) (145,600)

50,000 30,173

321,106 372,860

Supplementary notes to the returns (continued)

Form 10

*1001 *

Form 13

Reconciliation to shareholder accounts

Net assets per FSA returnLine 99 on Form 13 (OLTB)Line 59 on Form 15

Per shareholder accountsCapital and reserves

DifferenceAdditional reserves held in long term fundValuation difference Line 94 on Form 13Deferred tax held on additional reserves andvaluation differencesUnappropriated surplus held in long term fundLine 49 on Form 58

Notes 1301 to 1306 apply to the other than long term business fund.

*1301 *

*1302*

*1304 *

*1305*

*1306*

The Company held £66m in unlisted securities.

The Company held £22m in hybrid securities.

Amounts due to or from the Company have been set off to the extent permittedby generally accepted accounting principles.

The maximum permitted exposure to anyone counterparty other than short termdeposits with an approved credit institution is set at 5% of the long term businessamount. Maximum permitted exposure to anyone approved credit institution isset at 20%. There were no breaches of these limits during the year.

No counterparty exposure at the year end exceeded 5% of the long term businessamount. Counterparty limits set were not exceeded during the year.

Notes 1308 to 1313 apply to the long term business fund.

*1308* The Company held £1,050m in unlisted securities.

53


*1309*

*1310*

*1311*

*1312*

*1313*

Form 14

*1401*

*1402*

Form 15

*1501*

The Company held £1,330m in hybrid securities.

Amounts due to or from the Company have been set off to the extent permittedby generally accepted accounting principles.

The maximum permitted exposure to anyone counterparty has been set inaccordance with the counterparty limits detailed in the Interim PrudentialSourcebook for Insurers Appendix 4.2 Rule 4.14. Therefore exposures to non-approved counterparties have been restricted to a maximum of 5% of thebusiness amount. No counterparty exposure during the year exceeded theselimits.

No counterparty exposure at the year end exceeded 5% of the long term businessamount.

No "secured obligations" were held at the year end.

The long term fund held a number of interest rate and foreign currency swapsand foreign currency futures, during the year. The swaps involved the exchangeof cash flows and not the underlying principal amount. No provision for adversechange is required, as all derivatives that impose an obligation on the fund arestrictly covered.

(a) There were no charges attributable to the long term business assets.

(b) The long term fund does not attract tax, and therefore no provision,potential or otherwise, has been made for any liability to tax which mightarise if the company disposed of its assets at the values stated in this return.

(c)

(d)

There were no contingent liabilities at the year end.

There were no guarantees, indemnities or other contractual commitmentsother than in the ordinary course of insurance business and in respect ofrelated companies.

The other than long term fund held a number of interest rate swaps and foreigncurrency futures, during the year. The swaps involved the exchange of cash flowsand not the underlying principal amount. No provision for adverse change isrequired, as all derivatives that impose an obligation on the fund are strictlycovered.

54


*1502*

Fonn 16

*1601*

*1603*

Fonn 40

*4002*

*4008*

*4009*

Fonn 46

*4601*

(a) There were no charges attributable to the other than long tenn businessassets.

(b) The total potential liability to taxation on capital gains which might arise ifthe company disposed of its assets was £1,200k. Full provision has beenmade at the year end.

(c) There were no contingent liabilities at the year end.

(d) There were no guarantees, indemnities or other contractual commitmentsother than in the ordinary course of insurance business and in respect ofrelated companies.

Revenue account items are translated at rates ruling on the transaction date.

Balances in line 21 relate to management expenses.

Other income is composed mainly of interest earned on corporation tax paid butalso includes fees charged for the provision of infonnation, to unconnectedparties, relating to the FSA pensions review.

Management services are provided to the Company for day to day administrationfrom The Prudential Assurance Company Ltd (the immediate holding company),Prudential Financial Services Ltd, M&G Investment Management Ltd, PrudentialProperty Investment Managers Ltd, PPM America Inc. and Prudential ServicesLtd, all being group companies.

The Company has a reassurance agreement with a related company, PrudentialAssurance Company Limited, in respect of non-participating approved annuitypremiums. Included in earned premiums for the year is an amount of £765mreceived under this reassurance agreement. The reassurance agreement wasdrawn up under nonnal commercial tenns which reflect the level of businesstransacted with the Company.

Also included within claims incurred is an amount of £547m arising from claimsunder this reassurance agreement..

The liabilities included in the return, relating to this business amount to £7,461mat the year end.

The 'net transfers on' in from 46 have arisen from a change of administrationsystems, resulting in a different measure of the number of contracts for thepurpose of the returns.

55


Fonn 48

*4801*

*4802*

Fonn 51

*5102*

Fonn 57

*5704*

The amounts of accrued interest included in the value of admissible assets is:2002

£'00027,654

163,336647

191,637

Line121315

DescriptionFixed interest - approved securitiesFixed interest - unapproved securitiesVariable interest - unapproved securities

These amounts are included in line 84 on form 13.

There are six assets where the payment of interest is in default. The expectedincome from these assets has been reduced by 50%.

The tables of mortality and disability assumed in the valuation are indicated incolumn 3 ofFonns 51 and 54 by the following code letters:

A 80% PMA92 (U=2003) / 80% PFA92 (U=2003)

B 80% PMA92 (U=2003)+3 /80% PFA92 (U=2003)+3

c [AM / AF92] -3 (in defennent), 80% PMA92 (U=2003)+3 /80% PFA92(U=2003)+ 3 (in possession)

D [AM / AF92] -3 (in defennent), 70% PMA92 (C=2003) / 70% PFA92(C=2003) (in possession)

E Nil (in defennent), 80% PMA92 (U=2003) /80% PFA92 (U=2003) (inpossession)

Provision for the cost of paying annuities in possession is generally made byincreasing the value of the annuity. The percentage addition to the value of theannuity, or the explicit expense provision per annum, is shown by a code letterin column 3, the meaning of the code letters being as follows:

a Expense loading of 1.50%

b Expense loading of 4.50%

The yield shown in line 29 column 2 of Form 57 is the aggregate yield calculatedin accordance with the section 68 order and not the market weighted averageyield of lines 11 to 19 inclusive.

56



Directors' Certificate pursuant to Rule 9.34(a) of the Interim Prudential Sourcebookfor Insurers

We certify:

1. (a) in relation to the part of this return comprising Forms 9, 9A, 10, 13 to 17 and40 to 42 (and the supplementary notes thereto) and statements required byrules 9.29 and 9.30 that:

(i)

(ii)

(iii)

(b)

the return has been prepared in accordance with the Accounts andStatements Rules as modified by the Section 68 orders granted inAugust 1992 and December 1995 under of the Insurance CompaniesAct 1982 which continue to have effect;

proper accounting records have been maintained and adequateinformation has been obtained by the company; and

an appropriate system of control has been established and maintainedby the company over its transactions and records;

that in respect of the company's business which is not excluded by rule 7.6,the assets held throughout the financial year enabled the company to complywith rules 7.1 to 7.5 (matching and localisation); and

(c) in relation to the statement required by rule 9.36 that:

(i)

(ii)

(d)

for the purpose of preparing the statement, proper accounts andrecords have been maintained; and

the information given has been ascertained in conformity with thatRule.

that proper records have been maintained and adequate information obtainedby the insurer for the purpose of the declaration required by rule 9.39.

57

Certificate required by Rule 9.34(a) (continued)

2.

3.

(c)

(d)

(e)

(t)

that the margin of solvency required by rule 2.1 has been maintained throughout thefinancial year.

(a) that the requirements of rules 3.1 to 3.4 have been fully complied with and inparticular that, subject to the provisions of 3.2(2) to (4) and rule 3.3, assetsattributable to long term insurance business, the income arising therefrom,the proceeds of any realisation of such assets and any other income orproceeds allocated to the long term insurance business fund has not beenapplied otherwise than for the purpose of the long term insurance business;

(b) that any amount payable from or receivable by the long term insurancebusiness fund in respect of services rendered by or to any other businesscarried on by the company or by a person who, for the purposes of rule 3.4,is connected with it or is a subsidiary company of it has been determined andwhere appropriate apportioned on terms which are believed to be no lessthan fair to that fund, and any exchange of assets representing such fund forother assets of the company has been made at fair market value;

that no guarantees have been given by the company of the performance by arelated company of a contract binding on the related company which wouldfall to be met by any long term insurance business fund;

that no intemallinked funds are maintained;

that the return in respect of long term insurance business is not distorted byagreements with any other company carrying on insurance business withwhich the company has financial, commercial or administrative links or byany arrangements which could affect the apportionment of expenses andincome; and

that the company has fully complied with the requirement of rule 3.5.

58

Certificate required by Rule 9.34(a) (continued)

4. (a) that the systems of control established and maintained by the company inrespect of its business complied at the end of the financial year, and it isreasonable to believe that those systems continued to so complysubsequently and will continue to so comply in the future, with the followingpublished guidance:

(i) Guidance Note P.l - 'Systems of control over the investments ofinsurers' ;

(ii) Guidance notes for the Insurance and Retail Products FinancialSector (issued by the Joint Money Laundering Steering Group);

(b) that the return has been prepared in accordance with the following publishedguidance:

(i) Guidance Note 4.1 - 'Guidance for insurers and auditors on theValuation of Assets Rules';

(ii) Guidance Note 4.2 - 'Use of derivative contracts in insurance funds';and

(iii) Guidance Note 9.1 - 'Preparation of annual returns'.

.................................. .................................. ...................................

G M WoodChief Executive

D J BelshamDirector

T J W TookeyDirector

26 March 2003

59



Appointed Actuary's Certificate pursuant to Rule 9.34(b) of the Interim PrudentialSourcebook for Insurers

I certify that:

(a) (i) in my opinion proper records have been kept by the Company adequate for thepurpose of the valuation of the liabilities of its long-term insurance business;

(ii) the mathematical reserves as shown in Form 14 constitute proper provision at31 December 2002 for the liabilities (other than the liabilities which had fallendue before 31 December 2002) arising under or in connection with contracts forlong-term insurance business including the increase in those liabilities arisingfrom the distribution of surplus as a result of the investigation as at 31December 2002 into the financial condition of the long-term insurancebusiness;

(iii) for the purposes of sub-paragraph (ii) above, the liabilities have been assessedin accordance with Determination of Liabilities Rules in the context of assetsvalued in accordance with the Valuation of Assets Rules, as shown in Form 13;

(iv) the valuation complies with the guidance notes "GN1: The PrudentialSupervision in the UK of Long-Term Insurance Business" issued by the Facultyand Institute of Actuaries dated 1 December 2001 and "GN8: AdditionalGuidance on Valuation of Long-Term Insurance Business" issued by theFaculty and Institute of Actuaries, dated 30 December 2002;

(v) in my opinion, premiums for contracts entered into during the financial yearand the income earned thereon are sufficient, on reasonable actuarialassumptions, and taking into account the other financial resources of theCompany that are available for the purpose, to enable the Company to meet itscommitments in respect of these contracts and, in particular, to establishadequate mathematical reserves.

(b) the amount of the required minimum solvency margin applicable to the Company'slong-term insurance business immediately following 31 December 2002 (includingthe amount resulting from any increase in liabilities arising from a distribution ofsurplus as a result of the investigation into the financial condition of the long-terminsurance business) is £504,866,000.

D J BelshamAppointed Actuary

26 March 2003

60


Financial Year ended 31 December 2002

Report of the auditor to the Directors pursuant to Rule 9.35 of the Accounts andStatements Rules.

We have examined the following documents prepared by the company pursuant to theAccounts and Statements Rules set out in part I of chapter 9 to the Interim PrudentialSourcebook for Insurers ("the Rules") made by the Financial Services Authority ("FSA")under section 138 of the Financial Services and Markets Act 2000:

. Forms 9, 9A, 10, 13 to 17 and 40 to 42 (including the supplementary notes thereto) ("theForms");

. the statement required by Rule 9.29 on pages 64 to 66 ("the statement"); and

. the certificate signed in accordance with Rule 9.34(a) on pages 57 to 59 ("thecertificate").

In the case of the certificate, our examination did not extend to:

(a) paragraph 1 in relation to the statements required by Rules 9.30 and 9.36 concerningshareholders controllers and information on the appointed actuary;

(b) sub-paragraph 3 (d) concerning the investment policy and practice of internal linkedfunds required by paragraph 4 (d) of Appendix 9.6; and

(c) paragraph 4(a) in so far as it relates to controls with respect to Money Laundering.

This report is made solely to the company's directors, as a body, in accordance with therequirements of rule 9.35 of the Rules. We acknowledge that the directors are required tosubmit this report to the FSA, to enable the FSA to verify that an auditor's report has beencommissioned by the company's directors and issued in accordance with the requirementsof rule 9.35 of the Rules and to facilitate the discharge by the FSA of its regulatoryfunctions in respect of the company, conferred on the FSA by or under the FinancialServices and Markets Act 2000. Our audit work has been undertaken so that we might stateto the company's directors those matters we are required to state to them in an auditor'sreport issued pursuant to rule 9.35 of the Rules and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibility to anyone other than thecompany and the company's directors as a body, for our audit work, for this report, or forthe opinions we have formed.

61

Respective responsibilities of the Company and its auditors

The Company is responsible for the preparation of an annual return (including the Forms,statements and the certificate) under the provisions of the Rules. The requirements of theRules have been modified, under section 68 of the Insurance Companies Act 1982, byorders issued in August 1992 and December 1995, which continue to have effect under thetransitional arrangements. Under rule 9.11 the Forms and statement are required to beprepared in the manner specified by the Rules and to state fairly the information providedon the basis required by the Rules.

It is our responsibility to form an independent opinion as to whether the Forms andstatements meet these requirements, and in the case of the certificate whether it was or wasnot unreasonable for the persons giving the certificate to have made the statements therein,and to report our opinions to you. Our responsibilities, as independent auditors, areestablished in the United Kingdom, by statute, the Auditing Practices Board, and by ourprofession's ethical guidance.

Basis of opinions

We conducted our work in accordance with Practice note 20: "The Audit of Insurers in theUnited Kingdom" issued by the Auditing Practices Board. Our work included examination,on a test basis, of evidence relevant to the amounts and disclosures in the Forms andstatements. The evidence included that obtained by us relating to the audit of the financialstatements of the company for the financial year. It also included an assessment of thesignificant estimates and judgements made by the Company in the preparation of the Formsand statements.

We planned and performed our work so as to obtain all the information and explanationswhich we considered necessary in order to provide us with sufficient evidence to givereasonable assurance that the Forms and statements are free from material misstatement,whether caused by fraud or other irregularity or error, and comply with Rule 9.11.

In the case of the certificate, the work performed involved a review of the proceduresundertaken by the signatories to enable them to make the statements therein, and does notextend to an evaluation ofthe effectiveness of the company's internal control systems.

In giving our opinion we have relied on the certificate of the actuary on page 60 withrespect to the mathematical reserves and the required minimum margin.

62

Opinions

In our opinion:

(a) the Forms and statements fairly state the information provided on the basis requiredby the Rules as modified by section 68 orders granted on 1 August 1992 andDecember 1995 and have been properly prepared in accordance with the provisionsof those Rules; and

(b) based on the information and explanations received by us:

(i) the certificate has been properly prepared in accordance with the provisionsof the Rules; and

(ii) it was not unreasonable for the persons giving the certificate to have madethe statements therein.

KPMG Audit PlcRegistered Auditor8 Salisbury SquareLondon EC4Y 8BB

26 March 2003

63



Statement required by Rule 9.29 of the Interim Prudential Sourcebook for Insurers

(a) Investment guidelines

As requested by Rule 9.29 of the Interim Prudential Sourcebook for Insurers, theinvestment guidelines for the use of derivative contracts for both long term andother than long term funds are set out below. These are fully explained in theCompany's Investment Management Agreement with its fund managers and areconsistent with the investment strategy.

(i) Derivatives are used for the purpose of efficient portfolio management or toreduce risk, specific examples being to implement tactical asset allocationchanges around the strategic benchmark, hedge cash flows, or control the riskprofile of an identified strategy.

(ii) A number of restrictions on the use of derivatives have been agreed with theCompany's fund managers and can only be overruled by prior agreementbetween the two parties:

all derivatives that impose obligations on the fund must be strictly covered.

all derivative contracts must satisfy the definition of approved under Rule4.12 of the Interim Prudential Sourcebook for Insurers.

the maximum allowable exposure to counterparties should not be exceeded.

only certain permitted exchanges and contracts can be used.

(iii) During the year the company has used interest rate and currency swaps in thelong term business and interest rate swaps in the other than long term business.

(b) Derivatives where exercise is unlikely

There are no specific guidelines for the use of contracts not reasonably likely to beexercised. However, the Investment Management Agreement only allows the use ofderivatives for the purpose of efficient portfolio management or to reduce risk andthe Company's investment managers work within these constraints.

(c) Quantification of derivatives in (b) above

During 2002 no such contracts were used.

64

(d) Effect on form 13 at 31 December 2002 of exercising derivatives where it wouldbe prudent to assume options would be exercised. Decreases are shown inbrackets.

Long-term funds

Form 13 line 44; (£75,860,000)

(£31,648,000)Form 13 line 54/55/81;

Other than long-term funds

Form 13 line 54/55/81; (£8,535,000)

(e) Effect on form 13 at 31 December 2002 of exercising all derivatives. Decreasesare shown in brackets.

Long-term funds

Form 13 line 44; (£75,860,000)

(£31,648,000)Form 13 line 54/55/81;


Form 13 line 54/55/81; (£8,535,000)

(t) Effect on form 13 under the conditions noted in (d) and (e) above at any othertime during the year. Decreases are shown in brackets.

Conditions noted in (d)

Long-term funds

Form 13 line 44; (£15,346,000)

£5,693,000Form 13 line 54/55/81;


Form 13 line 44; (£1,150,000)

Form 13 line 54/55/81; £1,150,000

Conditions noted in (e)

Long-term funds

Form 13 line 44; (£15,346,000)

Form 13 line 54/55/81; £5,693,000

65

(h)

(i)


Form 13 line 44; (£1,150,000)

Form 13 line 54/55/81; £1,150,000

The above figures are the maximum impact on the individual line items ofexercising derivatives at any time during the year. The maximum impacts for eachline will not necessarily occur on the same day.

(g) Maximum exposure

Long-term funds

The maximum loss which would have been incurred by the Company on the failureby anyone counterparty to fulfil its obligations under derivative contracts at the endof the year was £14,605,000

Under foreseeable market conditions the company's exposure would not increasebeyond £15,335,000 as timely actions would be taken by the Investment Manager inline with its collateral management policies to prevent further exposures arising.The maximum loss at any other time during the year was £14,940,000.


The maximum loss which would have been incurred by the Company on the failureby anyone counterparty to fulfil its obligations under derivative contracts at the endof the year was £Nil.

Under foreseeable market conditions the company's exposure would not increasebeyond £10,000,000 as timely actions would be taken by the Investment Manager inline with its collateral management policies to prevent further exposures arising.The maximum loss at any other time during the year was £844,000.

Derivatives not covered by Paragraph (2) of Rule 4.12 or the definition of apermitted derivative contract in the Interim Prudential Sourcebook forInsurers.

There were no derivative contracts held during 2002 that did not satisfy the Rule4.12 requirements of the Interim Prudential Sourcebook for Insurers.

Consideration for granting rights under derivative contracts

No rights under derivative contracts have been granted.

66

In the case of each person who was a shareholder controller ofthe Company at 31 December 2002:

The percentage of the votingpower which he was entitled

The percentage ofshares he at that time to exercise, orheld at that time in the control the exercise of, at any

Persons who, to the knowledge of the Company, have been, at Company, or in another general meeting of theany time during the year ended 31 December 2002, a company of which the Company, or anothershareholder controller of the Company. Company was a subsidiary company of which it was a

undertaking, either alone or subsidiary undertaking,(shown separately) with any either alone or (shownassociate or associates separately) with any associate

or associates

The Prudential Assurance Company Limited, being its immediateholding company 100% 100%

Prudential plc, being its ultimate holding company 100% 100%



Statement in accordance with Rule 9.30 of the Interim Prudential Sourcebook forInsurers

Additional information on shareholder controllers

We confirm that the following is a list of:

(a) Persons who, to the knowledge of Prudential Annuities Limited ("the Company"), havebeen, at any time during the year ended 31 December 2002, a shareholder controller ofthe Company; and

(b) In the case of each person who was a shareholder controller of the Company at 31December 2002:

(i) the percentage of shares he held at that time in the Company, or in another companyof which the Company was a subsidiary undertaking; and

(ii) the percentage of the voting power which he was entitled at that time to exercise, orcontrol the exercise of, at any general meeting of the Company, or another companyof which it was a subsidiary undertaking;

in each case, either alone or with any associate or associates.

67



Statement of information on the Appointed Actuary pursuant to Rule 9.36 of theInterim Prudential Sourcebook for Insurers

In accordance with Rule 9.36, of the above sourcebook, David Belsham, theAppointed Actuary of the Company, was requested to furnish and has provided thefollowing information:

(a)

(iv)

(iii)

(i) He had an interest in 53,918 and 56,085 shares in the share capital ofthe holding company, Prudential plc, at the beginning and at the end ofthe year respectively.

He had an interest under the Prudential Restricted Share Plan in sharesin Prudential plc held in trust, representing the maximum award thatcould be made if performance requirements of the Plan were met, of28,921 and 34,262 shares at the beginning and at the end of the yearrespectively. During the year 2,097 shares were released to him andunder the 2002 Scheme 14,657 shares were conditionally awarded tohim.

(ii)

He held the following options granted under the Prudential Savings-Related Share Option Scheme to subscribe for shares in Prudential plc:

Number ofOptions overShares

ExercisePrice Exercise Dates

4541,1101,169

759p608p566p

Between June 2003 and December 2003Between June 2006 and December 2006Between June 2007 and December 2007

He also had an interest in 1,410 shares in Egg plc, a subsidiary ofPrudential plc, at the beginning and the end of the year.

He was interested in the following life and general insurance policies issuedby the Company:

(b)

(i)

(ii)

(iii)

(c)

(d)

Three endowment assurance with-profits policies maturing between2009 and 2011 with participating sums assured totalling £18,720, non-participating minimum death benefits of £48,000 and annual premiumsof £776.

Two temporary assurance without-profits policies expiring in 2011with sums assured totalling £202,000 and annual premiums of £457.

A home insurance policy covering buildings, household contents,travel and personal effects and a motor insurance policy.

His total remuneration for the year was £245,356.

He is a member of the Prudential Staff Pension Scheme and contributions inrespect of the year were paid by the Company.

68

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