Financial Insurance Company Limited

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1 Financial Insurance Company Limited Solvency and Financial Condition Report Disclosures 31 December 2016 (Monetary amounts in GBP thousands)

2 General information Undertaking name Financial Insurance Company Limited Undertaking identification code EDLFH3GC54WW96 Type of code of undertaking LEI Type of undertaking Undertakings pursuing both life and non-life activity Country of authorisation GB Language of reporting en Reporting reference date 31 December 2016 Currency used for reporting GBP Accounting standards The undertaking is using local GAAP (other than IFRS) Method of Calculation of the SCR Standard formula Matching adjustment No use of matching adjustment Volatility adjustment No use of volatility adjustment Transitional measure on the risk-free interest rate No use of transitional measure on the risk-free interest rate Transitional measure on technical provisions No use of transitional measure on technical provisions List of reported templates S Balance sheet S Premiums, claims and expenses by line of business S Premiums, claims and expenses by line of business S Premiums, claims and expenses by country S Premiums, claims and expenses by country S Life and Health SLT Technical Provisions S Non-Life Technical Provisions S Non-Life claims S Own Funds S Solvency Capital Requirement - for undertakings on Standard Formula S Minimum Capital Requirement - Both life and non-life activity

3 R0030 R0040 R0050 S Balance sheet Assets Intangible assets Deferred tax assets Pension benefit surplus Solvency II value R0060 Property, plant & equipment held for own use 422 R0070 Investments (other than assets held for index-linked and unit-linked contracts) 469,256 R0080 Property (other than for own use) 0 R0090 Holdings in related undertakings, including participations 0 R0100 Equities 0 R0110 Equities - listed 0 R0120 Equities - unlisted 0 R0130 Bonds 449,558 R0140 Government Bonds 50,443 R0150 Corporate Bonds 398,091 R0160 Structured notes 0 R0170 Collateralised securities 1,023 R0180 Collective Investments Undertakings 10,697 R0190 Derivatives R0200 Deposits other than cash equivalents 9,001 R0210 Other investments 0 R0220 Assets held for index-linked and unit-linked contracts R0230 Loans and mortgages 0 R0240 Loans on policies 0 R0250 R0260 Loans and mortgages to individuals Other loans and mortgages R0270 Re recoverables from: 1,126 R0280 Non-life and health similar to non-life 682 R0290 Non-life excluding health 682 R0300 Health similar to non-life 0 R0310 Life and health similar to life, excluding index-linked and unit-linked 444 R0320 Health similar to life 444 R0330 Life excluding health and index-linked and unit-linked 0 R0340 Life index-linked and unit-linked 0 R0350 Deposits to cedants 15,146 R0360 Insurance and intermediaries receivables 81,320 R0370 Re receivables 3,684 R0380 Receivables (trade, not ) 96,589 R0390 Own shares (held directly) 0 R0400 Amounts due in respect of own fund items or initial fund called up but not yet paid in 0 R0410 Cash and cash equivalents 36,274 R0420 Any other assets, not elsewhere shown 9,582 R0500 Total assets 713,400 C0010

4 S Balance sheet Liabilities Solvency II value R0510 Technical provisions - non-life 189,951 R0520 Technical provisions - non-life (excluding health) 189,951 R0530 TP calculated as a whole 0 R0540 Best Estimate 172,845 R0550 Risk margin 17,106 R0560 Technical provisions - health (similar to non-life) 0 R0570 TP calculated as a whole 0 R0580 Best Estimate 0 R0590 Risk margin 0 R0600 Technical provisions - life (excluding index-linked and unit-linked) 100,456 R0610 Technical provisions - health (similar to life) 100,456 R0620 TP calculated as a whole 0 R0630 Best Estimate 95,882 R0640 Risk margin 4,575 R0650 Technical provisions - life (excluding health and index-linked and unit-linked) 0 R0660 TP calculated as a whole 0 R0670 Best Estimate 0 R0680 Risk margin 0 R0690 Technical provisions - index-linked and unit-linked 0 R0700 TP calculated as a whole 0 R0710 Best Estimate 0 R0720 Risk margin 0 R0740 Contingent liabilities 708 R0750 Provisions other than technical provisions 12,124 R0760 R0770 R0780 R0790 R0800 R0810 Pension benefit obligations Deposits from reinsurers Deferred tax liabilities Derivatives Debts owed to credit institutions Financial liabilities other than debts owed to credit institutions R0820 Insurance & intermediaries payables 77,962 R0830 Re payables 1,664 R0840 Payables (trade, not ) 67,109 R0850 Subordinated liabilities 0 R0860 Subordinated liabilities not in BOF R0870 Subordinated liabilities in BOF 0 R0880 Any other liabilities, not elsewhere shown R0900 Total liabilities 449,975 C0010 R1000 Excess of assets over liabilities 263,424

5 S Premiums, claims and expenses by line of business Non-life Line of Business for: non-life and re obligations (direct business and accepted proportional re) Line of business for: accepted non-proportional re Medical expense Income protection Workers' compensation Motor vehicle liability Other motor Marine, aviation and transport Fire and other damage to property General liability Credit and suretyship Legal expenses Assistance Misc. financial loss Health Casualty Marine, aviation and transport Property Total C0010 C0020 C0030 C0040 C0050 C0060 C0070 C0080 C0090 C0100 C0110 C0120 C0130 C0140 C0150 C0160 C0200 Premiums written R0110 Gross - Direct Business 158, ,176 R0120 Gross - Proportional re accepted 69,155 69,155 R0130 Gross - Non-proportional re accepted 0 R0140 Reinsurers' share 18,827 18,827 R0200 Net 208, ,504 Premiums earned R0210 Gross - Direct Business 141, ,645 R0220 Gross - Proportional re accepted 52,494 52,494 R0230 Gross - Non-proportional re accepted 0 R0240 Reinsurers' share 16,545 16,545 R0300 Net 177, ,595 Claims incurred R0310 Gross - Direct Business 28,466 28,466 R0320 Gross - Proportional re accepted 12,993 12,993 R0330 Gross - Non-proportional re accepted 0 R0340 Reinsurers' share 5,009 5,009 R0400 Net 36,450 36,450 Changes in other technical provisions R0410 Gross - Direct Business -5,992-5,992 R0420 Gross - Proportional re accepted -2,216-2,216 R0430 Gross - Non-proportional re accepted 0 R0440 Reinsurers' share 0 R0500 Net -8,208-8,208 R0550 Expenses incurred 142, ,794 R1200 Other expenses R1300 Total expenses 142,794

6 S Premiums, claims and expenses by line of business Life Line of Business for: life obligations Life re obligations Health Insurance with profit participation Index-linked and unit-linked Other life Annuities stemming from non-life contracts and relating to health obligations Annuities stemming from non-life contracts and relating to obligations other than health obligations Health re Life re Total C0210 C0220 C0230 C0240 C0250 C0260 C0270 C0280 C0300 Premiums written R1410 Gross 107, ,256 97, ,321 R1420 Reinsurers' share 11,975 12, ,158 R1500 Net 95,420 97,073 97, ,163 Premiums earned R1510 Gross 109,993 88,449 97, ,112 R1520 Reinsurers' share 10,761 8, ,414 R1600 Net 99,232 79,796 97, ,698 Claims incurred R1610 Gross 44,246 26,301 31, ,436 R1620 Reinsurers' share ,895 R1700 Net 43,307 25,346 31, ,542 Changes in other technical provisions R1710 Gross -17,799-6, ,382 R1720 Reinsurers' share R1800 Net -17,799-6, ,382 R1900 Expenses incurred 76,456 65,419 65, ,313 R2500 Other expenses R2600 Total expenses 207,313

7 S Premiums, claims and expenses by country Non-life C0010 C0020 C0030 C0040 C0050 C0060 C0070 R0010 IT FR DE FI ES Premiums written C0080 C0090 C0100 C0110 C0120 C0130 C0140 R0110 Gross - Direct Business 4,919 23,738 38,648 29,069 16,375 6, ,720 R0120 Gross - Proportional re accepted 0 14, , ,254 34,525 R0130 Gross - Non-proportional re accepted R0140 Reinsurers' share ,810 11, ,442 R0200 Net 4,917 37,716 34,838 24,075 16,032 20, ,802 Premiums earned R0210 Gross - Direct Business 4,919 12,869 38,916 29,295 16,885 4, ,577 R0220 Gross - Proportional re accepted 0 10, , ,550 25,869 R0230 Gross - Non-proportional re accepted R0240 Reinsurers' share ,741 8, ,124 R0300 Net 4,917 23,207 35,175 24,238 16,542 15, ,323 Claims incurred R0310 Gross - Direct Business 618 2,073 12,789 2,088 4, ,397 R0320 Gross - Proportional re accepted 0 3, ,979 R0330 Gross - Non-proportional re accepted R0340 Reinsurers' share , ,544 R0400 Net 618 5,750 9,008 1,722 4,457 1,278 22,832 Changes in other technical provisions R0410 Gross - Direct Business 1,016 4,326 11,162 9,485-3,956 3,426 25,459 R0420 Gross - Proportional re accepted 0 1,600 4,129 3,508-1,463 1,267 9,040 R0430 Gross - Non-proportional re accepted R0440 Reinsurers' share R0500 Net 1,016 5,926 15,291 12,993-5,420 4,693 34,500 R0550 Expenses incurred 9,422 18,789 27,369 21,212 10,249 14, ,770 R1200 Other expenses Home Country Top 5 countries (by amount of gross premiums written) - non-life obligations Top 5 countries (by amount of gross premiums written) - non-life obligations Total Top 5 and home country R1300 Total expenses 101,770

8 S Premiums, claims and expenses by country Life C0150 C0160 C0170 C0180 C0190 C0200 C0210 Home Country Top 5 countries (by amount of gross premiums written) - life obligations Top 5 countries (by amount of gross premiums written) - life obligations R1400 CA FI DE FR IT Total Top 5 and home country C0220 C0230 C0240 C0250 C0260 C0270 C0280 Premiums written R1410 Gross 5, ,903 50,625 33,094 22,502 17, ,974 R1420 Reinsurers' share , ,620 R1500 Net 5, ,903 49,662 13,156 22,043 16, ,354 Premiums earned R1510 Gross 5, ,903 51,617 27,435 23,163 5, ,185 R1520 Reinsurers' share , ,864 R1600 Net 5, ,903 50,654 12,267 22,703 5, ,321 Claims incurred R1610 Gross 1,302 43,681 13,706 2,076 27, ,514 R1620 Reinsurers' share ,304 R1700 Net 1,302 43,681 13,467 1,298 27, ,210 Changes in other technical provisions R1710 Gross ,059-8,714-4,874-24,866-50,780 R1720 Reinsurers' share R1800 Net ,059-8,714-4,874-24,866-50,780 R1900 Expenses incurred 8,968 83,674 36,908 12,272 9,334 6, ,486 R2500 Other expenses 0 R2600 Total expenses 157,486

9 S Life and Health SLT Technical Provisions Insurance with profit participation Index-linked and unit-linked Other life Annuities stemming from non-life Contracts without options and guarantees Contracts with options or guarantees Contracts without options and guarantees Contracts with options or guarantees contracts and relating to obligation other than health obligations Accepted re Total (Life other than health, including Unit-Linked) Health (direct business) Contracts without options and guarantees Contracts with options or guarantees Annuities stemming from non-life contracts and relating to health obligations Health re (re accepted) Total (Health similar to life ) C0020 C0030 C0040 C0050 C0060 C0070 C0080 C0090 C0100 C0150 C0160 C0170 C0180 C0190 C0200 C0210 R0010 Technical provisions calculated as a whole R0020 Total Recoverables from re/spv and Finite Re after the adjustment for expected losses due to counterparty default associated to TP calculated as a whole Technical provisions calculated as a sum of BE and RM Best estimate R0030 Gross Best Estimate ,386 21,496 95,882 R0080 Total Recoverables from re/spv and Finite Re after the adjustment for expected losses due to counterparty default R0090 Best estimate minus recoverables from re/spv and Finite Re , ,496 95,438 R0100 Risk margin 0 0 2,685 1,889 4,575 Amount of the transitional on Technical Provisions R0110 Technical Provisions calculated as a whole 0 0 R0120 Best estimate 0 0 R0130 Risk margin 0 0 R0200 Technical provisions - total ,071 23, ,456

10 S Non-Life Technical Provisions Direct business and accepted proportional re Accepted non-proportional re Medical expense Income protection Workers' compensation Motor vehicle liability Other motor Marine, aviation and transport Fire and other damage to property General liability Credit and suretyship Legal expenses Assistance Miscellaneous financial loss Nonproportional health re Nonproportional casualty re Nonproportional marine, aviation and transport re Nonproportional property re Total Non-Life obligation C0020 C0030 C0040 C0050 C0060 C0070 C0080 C0090 C0100 C0110 C0120 C0130 C0140 C0150 C0160 C0170 C0180 R0010 Technical provisions calculated as a whole 0 0 R0050 Total Recoverables from re/spv and Finite Re after the adjustment for expected losses due to counterparty default associated to TP calculated as a whole 0 Technical provisions calculated as a sum of BE and RM Best estimate Premium provisions R0060 Gross 142, ,702 R0140 Total recoverable from re/spv and Finite Re after the adjustment for expected losses due to counterparty default R0150 Net Best Estimate of Premium Provisions 143, ,254 Claims provisions R0160 Gross 30,143 30,143 R0240 Total recoverable from re/spv and Finite Re after the adjustment for expected losses due to 1,234 1,234 counterparty default R0250 Net Best Estimate of Claims Provisions 28,909 28,909 R0260 Total best estimate - gross 172, ,845 R0270 Total best estimate - net 172, ,163 R0280 Risk margin 17,106 17,106 Amount of the transitional on Technical Provisions R0290 Technical Provisions calculated as a whole 0 R0300 Best estimate 0 R0310 Risk margin 0 R0320 Technical provisions - total 189, ,951 R0330 R0340 Recoverable from re contract/spv and Finite Re after the adjustment for expected losses due to counterparty default - total Technical provisions minus recoverables from re/spv and Finite Re - total , ,269

11 S Non-Life claims Total Non-life business Z0010 Accident year / underwriting year Accident Year Gross Claims Paid (non-cumulative) (absolute amount) Year C0010 C0020 C0030 C0040 C0050 C0060 C0070 C0080 C0090 C0100 C0110 C0170 C0180 Development year & + In Current year Sum of years (cumulative) R0100 Prior R0160 N R0170 N ,080 R0180 N , ,771 R0190 N ,373 3, ,603 R0200 N-5 25,917 32,065 3, ,839 R0210 N-4 25,790 31,475 3, ,952 R0220 N-3 23,619 27,286 2, ,747 R0230 N-2 21,392 21,312 2,306 2,306 45,010 R0240 N-1 17,328 20,282 20,282 37,610 R0250 N 17,540 17,540 17,540 R0260 Total 41, ,498 Gross Undiscounted Best Estimate Claims Provisions (absolute amount) Year C0200 C0210 C0220 C0230 C0240 C0250 C0260 C0270 C0280 C0290 C0300 Development year & + R0100 Prior 0 0 R0160 N R0170 N R0180 N , R0190 N-6 0 5, R0200 N-5 38,609 3, R0210 N-4 33,627 3, R0220 N-3 33,824 2, R0230 N-2 25,655 2, R0240 N-1 22,714 2,331 2,331 R0250 N 27,104 27,104 R0260 Total 30,142 C0360 Year end (discounted data)

12 S Own Funds Basic own funds before deduction for participations in other financial sector as foreseen in article 68 of Delegated Regulation 2015/35 Total Tier 1 unrestricted Tier 1 restricted Tier 2 Tier 3 C0010 C0020 C0030 C0040 C0050 R0010 Ordinary share capital (gross of own shares) 251, ,801 0 R0030 Share premium account related to ordinary share capital 17,327 17,327 0 R0040 Initial funds, members' contributions or the equivalent basic own-fund item for mutual and mutual-type undertakings R0050 Subordinated mutual member accounts R0070 Surplus funds 0 0 R0090 Preference shares R0110 Share premium account related to preference shares R0130 Reconciliation reserve -5,703-5,703 R0140 Subordinated liabilities R0160 An amount equal to the value of net deferred tax assets 0 0 R0180 Other own fund items approved by the supervisory authority as basic own funds not specified above R0220 Own funds from the financial statements that should not be represented by the reconciliation reserve and do not meet the criteria to be classified as Solvency II own funds 0 R0230 Deductions for participations in financial and credit institutions 0 R0290 Total basic own funds after deductions 263, , Ancillary own funds R0300 Unpaid and uncalled ordinary share capital callable on demand 0 R0310 Unpaid and uncalled initial funds, members' contributions or the equivalent basic own fund item for mutual and mutual - type undertakings, callable on demand 0 R0320 Unpaid and uncalled preference shares callable on demand 0 R0330 A legally binding commitment to subscribe and pay for subordinated liabilities on demand 0 R0340 Letters of credit and guarantees under Article 96(2) of the Directive 2009/138/EC 0 R0350 Letters of credit and guarantees other than under Article 96(2) of the Directive 2009/138/EC 0 R0360 Supplementary members calls under first subparagraph of Article 96(3) of the Directive 2009/138/EC 0 R0370 Supplementary members calls - other than under first subparagraph of Article 96(3) of the Directive 2009/138/EC 0 R0390 Other ancillary own funds 0 R0400 Total ancillary own funds Available and eligible own funds R0500 Total available own funds to meet the SCR 263, , R0510 Total available own funds to meet the MCR 263, , R0540 Total eligible own funds to meet the SCR 263, , R0550 Total eligible own funds to meet the MCR 263, , R0580 SCR 200,950 R0600 MCR 60,018 R0620 Ratio of Eligible own funds to SCR % R0640 Ratio of Eligible own funds to MCR % Reconcilliation reserve R0700 Excess of assets over liabilities 263,424 R0710 Own shares (held directly and indirectly) 0 R0720 Foreseeable dividends, distributions and charges R0730 Other basic own fund items 269,127 R0740 Adjustment for restricted own fund items in respect of matching adjustment portfolios and ring fenced funds 0 R0760 Reconciliation reserve Expected profits R0770 Expected profits included in future premiums (EPIFP) - Life business 7,969 R0780 Expected profits included in future premiums (EPIFP) - Non- life business 7,254 R0790 Total Expected profits included in future premiums (EPIFP) 15,223 C0060-5,703

13 S Solvency Capital Requirement - for undertakings on Standard Formula Gross solvency capital requirement USP Simplifications C0110 C0080 C0090 R0010 Market risk 39,045 R0020 Counterparty default risk 32,432 R0030 Life underwriting risk 28,719 R0040 Health underwriting risk 34,599 R0050 Non-life underwriting risk 135,167 R0060 Diversification -87,524 R0070 Intangible asset risk 0 R0100 Basic Solvency Capital Requirement 182,438 Calculation of Solvency Capital Requirement C0100 R0130 Operational risk 22,049 R0140 Loss-absorbing capacity of technical provisions -3,537 R0150 Loss-absorbing capacity of deferred taxes 0 R0160 Capital requirement for business operated in accordance with Art. 4 of Directive 2003/41/EC 0 R0200 Solvency Capital Requirement excluding capital add-on 200,950 R0210 Capital add-ons already set 0 R0220 Solvency capital requirement 200,950 Other information on SCR R0400 Capital requirement for duration-based equity risk sub-module 0 R0410 Total amount of Notional Solvency Capital Requirements for remaining part 0 R0420 Total amount of Notional Solvency Capital Requirements for ring fenced funds 0 R0430 Total amount of Notional Solvency Capital Requirements for matching adjustment portfolios 0 R0440 Diversification effects due to RFF nscr aggregation for article 304 0

14 S Minimum Capital Requirement - Both life and non-life activity Non-life activitie Life activities Non-life activities Life activities MCR (NL,NL) Result MCR (NL,L) Result R0010 Linear formula component for non-life and re obligations C0010 C ,014 0 re/s PV) best estimate and TP calculated as a whole re) written premiums in the last 12 months re/s PV) best estimate and TP calculated as a whole re) written premiums in the last 12 months C0030 C0040 C0050 C0060 R0020 Medical expense and proportional re R0030 Income protection and proportional re R0040 Workers' compensation and proportional re R0050 Motor vehicle liability and proportional re R0060 Other motor and proportional re R0070 Marine, aviation and transport and proportional re R0080 Fire and other damage to property and proportional re R0090 General liability and proportional re R0100 Credit and suretyship and proportional re R0110 Legal expenses and proportional re R0120 Assistance and proportional re R0130 Miscellaneous financial loss and proportional re 172, ,046 R0140 Non-proportional health re R0150 Non-proportional casualty re R0160 Non-proportional marine, aviation and transport re R0170 Non-proportional property re MCR (L,NL) Result MCR (L,L) Result R0200 Linear formula component for life and re obligations C0070 C0080 2,004 0 R0210 R0220 R0230 Obligations with profit participation - guaranteed benefits Obligations with profit participation - future discretionary benefits Index-linked and unit-linked obligations re/s PV) best estimate and TP calculated as a whole R0240 Other life (re) and health (re) obligations 95,438 R0250 Total capital at risk for all life (re) obligations Overall MCR calculation C0130 R0300 Linear MCR 60,018 R0310 SCR 200,950 R0320 MCR cap 90,428 R0330 MCR floor 50,238 R0340 Combined MCR 60,018 R0350 Absolute floor of the MCR 5,583 R0400 Minimum Capital Requirement 60,018 Notional non-life and life MCR calculation C0140 C0150 R0500 Notional linear MCR 60,018 0 R0510 Notional SCR excluding add-on (annual or latest calculation) 200,950 0 R0520 Notional MCR cap 90,428 0 R0530 Notional MCR floor 50,238 0 R0540 Notional combined MCR 60,018 0 R0550 Absolute floor of the notional MCR 2,251 3,332 R0560 Notional MCR 60,018 3,332 re/s PV) total capital at risk re/s PV) best estimate and TP calculated as a whole re/s PV) total capital at risk C0090 C0100 C0110 C0120

Financial Assurance Company Limited

Financial Assurance Company Limited Solvency and Financial Condition Report Disclosures 31 December 2016 (Monetary amounts in GBP thousands) General information Undertaking name Financial Assurance Company