ANNUAL STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 OF THE CONDITION AND AFFAIRS OF THE. Wilco Life Insurance Company

Transcription

1 LIFE AND ACCIDENT AND HEALTH COMPANIES - ASSOCIATION EDITION ANNUAL STATEMENT FOR THE YEAR ENDED DECEMBER, 07 OF THE CONDITION AND AFFAIRS OF THE Wilco Life Insurance Company * * NAIC Group Code 4 4 NAIC Company Code Employer's ID Number (Current) (Prior) Organized under the Laws of Indiana, State of Domicile or Port of Entry IN Country of Domicile United States of America Incorporated/Organized 0/0/96 Commenced Business 05/0/96 Statutory Home Office 8 E New Market St STE 50, Carmel, IN, US 460 (Street and Number) (City or Town, State, Country and Zip Code) Main Administrative Office 0 Glover Avenue 4th Floor (Street and Number) Norwalk, CT, US 06850, (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) Mail Address 0 Glover Avenue 4th Floor, Norwalk, CT, US (Street and Number or P.O. Box) (City or Town, State, Country and Zip Code) Primary Location of Books and Records 0 Glover Avenue 4th Floor (Street and Number) Norwalk, CT, US 06850, (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) Internet Website Address Statutory Statement Contact Shahid Bashar, (Name) (Area Code) (Telephone Number) sbashar@wiltonre.com, ( Address) (FAX Number) Chief Executive Officer SVP, General Counsel & Secretary Michael Elliott Fleitz Mark Raymond Sarlitto OFFICERS SVP, Chief Financial Officer Steven Daniel Lash OTHER Enrico John Treglia, SVP, Chief Operating Officer Michael Leonard Greer, Senior Vice President Robert Charles Fahr, VP, Controller DIRECTORS OR TRUSTEES Chris Conrad Stroup Michael Elliott Fleitz Mark Raymond Sarlitto Enrico John Treglia John Joseph Quinn State of County of Connecticut Fairfield SS: The officers of this reporting entity being duly sworn, each depose and say that they are the described officers of said reporting entity, and that on the reporting period stated above, all of the herein described assets were the absolute property of the said reporting entity, free and clear from any liens or claims thereon, except as herein stated, and that this statement, together with related exhibits, schedules and explanations therein contained, annexed or referred to, is a full and true statement of all the assets and liabilities and of the condition and affairs of the said reporting entity as of the reporting period stated above, and of its income and deductions therefrom for the period ended, and have been completed in accordance with the NAIC Annual Statement Instructions and Accounting Practices and Procedures manual except to the extent that: () state law may differ; or, () that state rules or regulations require differences in reporting not related to accounting practices and procedures, according to the best of their information, knowledge and belief, respectively. Furthermore, the scope of this attestation by the described officers also includes the related corresponding electronic filing with the NAIC, when required, that is an exact copy (except for formatting differences due to electronic filing) of the enclosed statement. The electronic filing may be requested by various regulators in lieu of or in addition to the enclosed statement. Michael Elliott Fleitz Mark Raymond Sarlitto Steven Daniel Lash Chief Executive Officer SVP, General Cousel & Secretary SVP, Chief Financial Officer a. Is this an original filing? Yes [ X ] No [ ] Subscribed and sworn to before me this b. If no, day of February 08. State the amendment number. Date filed. Number of pages attached Donna Evans Notary Public May,00

2 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY ASSETS Assets Current Year Nonadmitted Assets Net Admitted Assets (Cols. - ) Prior Year 4 Net Admitted Assets. Bonds (Schedule D),49,70,08,49,70,08,79,59,59. Stocks (Schedule D):. Preferred stocks 65,60,45 65,60,45 6,,598. Common stocks 8,948,00 8,948,00 9,50,8. Mortgage loans on real estate (Schedule B):. First liens,64,695,64,695 50,459,890. Other than first liens Real estate (Schedule A): 4. Properties occupied by the company (less $ encumbrances) Properties held for the production of income (less $ encumbrances) Properties held for sale (less $ encumbrances) Cash ($ 7,64,98, Schedule E - Part ), cash equivalents ($ 68,77,46, Schedule E - Part ) and short-term investments ($ 0, Schedule DA) 85,8,446 85,8,446 48,79, Contract loans (including $ premium notes) 8,954,959 68,7 8,6,787 48,897, Derivatives (Schedule DB),707,454,707,454,845,70 8. Other invested assets (Schedule BA) 46,4,870 46,4,870 6,8,60 9. Receivables for securities,897,0,897,0 589,0 0. Securities lending reinvested collateral assets (Schedule DL) 0 0. Aggregate write-ins for invested assets Subtotals, cash and invested assets (Lines to ),85,5,984 68,7,84,6,8,09,888,64. Title plants less $ charged off (for Title insurers only) Investment income due and accrued 9,59,97 0 9,59,97 7,00,5 5. Premiums and considerations: 5. Uncollected premiums and agents' balances in the course of collection 4,445,67 6,090 4,49,77 9,465, Deferred premiums and agents' balances and installments booked but deferred and not yet due (including $ earned but unbilled premiums),977,966,977,966,, Accrued retrospective premiums ($ ) and 6. Reinsurance: contracts subject to redetermination ($ ) Amounts recoverable from reinsurers 4,8,09,609,,,876 4,4,0 6. Funds held by or deposited with reinsured companies Other amounts receivable under reinsurance contracts,40,940 0,40,940,99,74 7. Amounts receivable relating to uninsured plans Current federal and foreign income tax recoverable and interest thereon ,945, Net deferred tax asset 4,46,098 97,66,89 6,846,809,560,70 9. Guaranty funds receivable or on deposit 48, ,96 4,7 0. Electronic data processing equipment and software Furniture and equipment, including health care delivery assets ($ ) Net adjustment in assets and liabilities due to foreign exchange rates Receivables from parent, subsidiaries and affiliates Health care ($ ) and other amounts receivable,9,584 0,609 6,64 5. Aggregate write-ins for other than invested assets,647,59,647, Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines to 5),004,770,9 0,58,67,90,4,50,97,405, 7. From Separate Accounts, Segregated Accounts and Protected Cell Accounts Total (Lines 6 and 7),004,770,9 0,58,67,90,4,50,97,405, DETAILS OF WRITE-INS 98. Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above) Expenses Paid in Advance,647,59,647, Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 thru 50 plus 598)(Line 5 above),647,59,647,59 0 0

3 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY LIABILITIES, SURPLUS AND OTHER FUNDS Prior Year Current Year. Aggregate reserve for life contracts $,48,99,00 (Exh. 5, Line ) less $ included in Line 6. (including $ 8,49,67 Modco Reserve),48,99,00,48,946,469. Aggregate reserve for accident and health contracts (including $ 5,647,496 Modco Reserve) 5,647,497,7,654. Liability for deposit-type contracts (Exhibit 7, Line 4, Col. ) (including $ Modco Reserve) 89,878,69 6,987, Contract claims: 4. Life (Exhibit 8, Part, Line 4.4, Col. less sum of Cols. 9, 0 and ) 88,7,495 6,608,97 4. Accident and health (Exhibit 8, Part, Line 4.4, sum of Cols. 9, 0 and ) 0,984,456 0,576,0 5. Policyholders dividends $ 9,60 and coupons $ due and unpaid (Exhibit 4, Line 0) 9,60 6,99 6. Provision for policyholders dividends and coupons payable in following calendar year - estimated amounts: 6. Dividends apportioned for payment (including $ Modco) 566, ,45 6. Dividends not yet apportioned (including $ Modco) Coupons and similar benefits (including $ Modco), Amount provisionally held for deferred dividend policies not included in Line Premiums and annuity considerations for life and accident and health contracts received in advance less $ discount; including $ 584,648 accident and health premiums (Exhibit, Part, Col., sum of lines 4 and 4) 979,857,64, Contract liabilities not included elsewhere: 9. Surrender values on canceled contracts,9,7,4,4 9. Provision for experience rating refunds, including the liability of $ accident and health experience rating refunds of which $ is for medical loss ratio rebate per the Public Health Service Act 9. Other amounts payable on reinsurance, including $,74 assumed and $ 7,0,55 ceded 7,04,67 6,490, Interest maintenance reserve (IMR, Line 6) 7,807,5,5, 0. Commissions to agents due or accrued-life and annuity contracts $ 8,55 accident and health $ and deposit-type contract funds $ 8,55 0,500. Commissions and expense allowances payable on reinsurance assumed 8,80 68,96. General expenses due or accrued (Exhibit, Line, Col. 6) 0,47,84 6,099,87. Transfers to Separate Accounts due or accrued (net) (including $ accrued for expense allowances recognized in reserves, net of reinsured allowances) 0 4. Taxes, licenses and fees due or accrued, excluding federal income taxes (Exhibit, Line 9, Col. 5),70,057,969,97 5. Current federal and foreign income taxes, including $ 7,48,050 on realized capital gains (losses) 9,0, () 5. Net deferred tax liability Unearned investment income 6,96 854, 7. Amounts withheld or retained by company as agent or trustee (06,86) 45,80 8. Amounts held for agents' account, including $,7 agents' credit balances,967,8,80, Remittances and items not allocated,705,550 9,78, Net adjustment in assets and liabilities due to foreign exchange rates 0. Liability for benefits for employees and agents if not included above 0. Borrowed money $ 0 and interest thereon $ 9,4. Dividends to stockholders declared and unpaid 4. Miscellaneous liabilities: 4.0 Asset valuation reserve (AVR, Line 6, Col. 7) 6,68,09 8,86,8 4.0 Reinsurance in unauthorized and certified ($ 0 ) companies 08,645 80, Funds held under reinsurance treaties with unauthorized and certified ($ ) reinsurers 4.04 Payable to parent, subsidiaries and affiliates,7,48,8, 4.05 Drafts outstanding 4.06 Liability for amounts held under uninsured plans 4.07 Funds held under coinsurance 4.08 Derivatives Payable for securities 4, Payable for securities lending 4. Capital notes $ and interest thereon $ 5. Aggregate write-ins for liabilities 4,90,097 9,660,5 6. Total liabilities excluding Separate Accounts business (Lines to 5),788,4,985,040,56,58 7. From Separate Accounts Statement 8. Total liabilities (Lines 6 and 7),788,4,985,040,56,58 9. Common capital stock 4,78, 4,78, 0. Preferred capital stock. Aggregate write-ins for other than special surplus funds 0 0. Surplus notes 0. Gross paid in and contributed surplus (Page, Line, Col. plus Page 4, Line 5., Col. ) 9,89,75 49,068,54 4. Aggregate write-ins for special surplus funds Unassigned funds (surplus) (0,4,09),64,9 6. Less treasury stock, at cost: 6. shares common (value included in Line 9 $ ) 6. shares preferred (value included in Line 0 $ ) 7. Surplus (Total Lines ) (including $ in Separate Accounts Statement) 09,649,84 5,70,77 8. Totals of Lines 9, 0 and 7 (Page 4, Line 55),87,506 56,888, Totals of Lines 8 and 8 (Page, Line 8, Col. ),90,4,49,97,405,5 DETAILS OF WRITE-INS 50. Contingency Reserves 6,5,05 6,60, Unclaimed Funds 7,56,88,66, Accounts Payable 7,80, Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 thru 50 plus 598)(Line 5 above) 4,90,097 9,660, Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above) Summary of remaining write-ins for Line 4 from overflow page Totals (Lines 40 thru 40 plus 498)(Line 4 above) 0 0

4 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY SUMMARY OF OPERATIONS Prior Year Current Year. Premiums and annuity considerations for life and accident and health contracts (Exhibit, Part, Line 0.4, Col., less Col. ) 08,7,70 98,979,. Considerations for supplementary contracts with life contingencies 6,900 76,697. Net investment income (Exhibit of Net Investment Income, Line 7) 56,0,649 66,949, Amortization of Interest Maintenance Reserve (IMR, Line 5) 6,99,50 5,405, Separate Accounts net gain from operations excluding unrealized gains or losses 0 6. Commissions and expense allowances on reinsurance ceded (Exhibit, Part, Line 6., Col. ) 5,690,004 6,54,7 7. Reserve adjustments on reinsurance ceded (,665,476) (,4,980) 8. Miscellaneous Income: 8. Income from fees associated with investment management, administration and contract guarantees from Separate Accounts 0 8. Charges and fees for deposit-type contracts Aggregate write-ins for miscellaneous income,05,65 9,65 9. Total (Lines to 8.) 75,86,96 66,440,74 0. Death benefits 7,68,494 4,850,749. Matured endowments (excluding guaranteed annual pure endowments) 76,7,895,488. Annuity benefits (Exhibit 8, Part, Line 6.4, Cols ) 7,70,06,605,77. Disability benefits and benefits under accident and health contracts 408,44 770,70 4. Coupons, guaranteed annual pure endowments and similar benefits, Surrender benefits and withdrawals for life contracts 75,97,5 74,066,9 6. Group conversions 0 7. Interest and adjustments on contract or deposit-type contract funds 6,86,609 0,55,6 8. Payments on supplementary contracts with life contingencies,48,45,77, Increase in aggregate reserves for life and accident and health contracts (06,6,60) (04,875,66) 0. Totals (Lines 0 to 9) 4,9,58,4,78. Commissions on premiums, annuity considerations, and deposit-type contract funds (direct business only) (Exhibit, Part, Line, Col. ) 8,699,447 8,487,86. Commissions and expense allowances on reinsurance assumed (Exhibit, Part, Line 6., Col. ) 58,005 7,99. General insurance expenses (Exhibit, Line 0, Cols.,, and 4) 7,75,7 8,647,96 4. Insurance taxes, licenses and fees, excluding federal income taxes (Exhibit, Line 7, Cols. + + ),79,4 4,54,8 5. Increase in loading on deferred and uncollected premiums (8,086) (846,944) 6. Net transfers to or (from) Separate Accounts net of reinsurance 0 7. Aggregate write-ins for deductions 9,998,8 (,50,466) 8. Totals (Lines 0 to 7) 64,59,97 70,690,44 9. Net gain from operations before dividends to policyholders and federal income taxes (Line 9 minus Line 8) 0,87,099 (4,49,69) 0. Dividends to policyholders 856,06 85,6. Net gain from operations after dividends to policyholders and before federal income taxes (Line 9 minus Line 0) 9,970,99 (4,65,5). Federal and foreign income taxes incurred (excluding tax on capital gains) 7,65,500 (7,47,8). Net gain from operations after dividends to policyholders and federal income taxes and before realized capital gains or (losses) (Line minus Line ),55,49,78,9 4. Net realized capital gains (losses) (excluding gains (losses) transferred to the IMR) less capital gains tax of $ 86,756 (excluding taxes of $,46,546 transferred to the IMR) (44,004) (,69,40) 5. Net income (Line plus Line 4),,489,089,50 CAPITAL AND SURPLUS ACCOUNT 6. Capital and surplus, December, prior year (Page, Line 8, Col. ) 56,888,999 00,65,0 7. Net income (Line 5),,489,089,50 8. Change in net unrealized capital gains (losses) less capital gains tax of $ 7,49,99,056,4 (4,6,758) 9. Change in net unrealized foreign exchange capital gain (loss) Change in net deferred income tax (6,0,90) (0,9,6) 4. Change in nonadmitted assets 6,9,68 9,58,7 4. Change in liability for reinsurance in unauthorized and certified companies 50, 85, Change in reserve on account of change in valuation basis, (increase) or decrease Change in asset valuation reserve (7,8,709) 86, Change in treasury stock (Page, Lines 6. and 6., Col. minus Col. ) Surplus (contributed to) withdrawn from Separate Accounts during period 47. Other changes in surplus in Separate Accounts Statement 48. Change in surplus notes 49. Cumulative effect of changes in accounting principles 50. Capital changes: 50. Paid in 50. Transferred from surplus (Stock Dividend) 50. Transferred to surplus 5. Surplus adjustment: 5. Paid in (9,76,59) (50,000,000) 5. Transferred to capital (Stock Dividend) 5. Transferred from capital 5.4 Change in surplus as a result of reinsurance 5. Dividends to stockholders (0,8,84) 5. Aggregate write-ins for gains and losses in surplus Net change in capital and surplus for the year (Lines 7 through 5) (4,06,48) (4,76,) 55. Capital and surplus, December, current year (Lines ) (Page, Line 8),87,56 56,888,999 DETAILS OF WRITE-INS Miscellaneous Income,05,65 9, Summary of remaining write-ins for Line 8. from overflow page Totals (Lines 08.0 thru 08.0 plus 08.98)(Line 8. above),05,65 9, Change in contingency reserves 9,955,05 (,605,59) 70. Fines and Penalties 7,800 0, Miscellaneous write-in 5, (68) 798. Summary of remaining write-ins for Line 7 from overflow page Totals (Lines 70 thru 70 plus 798)(Line 7 above) 9,998,8 (,50,466) Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 thru 50 plus 598)(Line 5 above) 0 0 4

5 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY CASH FLOW Current Year Prior Year Cash from Operations. Premiums collected net of reinsurance 4,0,7 0,48,598. Net investment income 64,859,85 68,979,86. Miscellaneous income 6,884,065 5,646,7 4. Total (Lines through ) 95,755,587 94,774, Benefit and loss related payments 9,9,575 4,87, Net transfers to Separate Accounts, Segregated Accounts and Protected Cell Accounts Commissions, expenses paid and aggregate write-ins for deductions 47,045,95 4,990, Dividends paid to policyholders 974,45 455,78 9. Federal and foreign income taxes paid (recovered) net of $ (,67,895) tax on capital gains (losses) 4,07,7 (,969,75) 0. Total (Lines 5 through 9) 444,49,568 74,50,97. Net cash from operations (Line 4 minus Line 0) (48,9,98) (79,575,5) Cash from Investments. Proceeds from investments sold, matured or repaid:. Bonds 75,858,45 664,04,55. Stocks 4,40,060 (4,947). Mortgage loans 7,,8,8,777.4 Real estate Other invested assets 60,60 890,5.6 Net gains or (losses) on cash, cash equivalents and short-term investments Miscellaneous proceeds 4,658,05,988.8 Total investment proceeds (Lines. to.7) 787,577,89 697,97,5. Cost of investments acquired (long-term only):. Bonds 4,0,95 90,09,940. Stocks 8,57,0,40,578. Mortgage loans Real estate Other invested assets 9,,74,5,579.6 Miscellaneous applications 4,69,554,75,77.7 Total investments acquired (Lines. to.6) 49,8,6 46,06, Net increase (decrease) in contract loans and premium notes (0,576,846) (8,07,688) 5. Net cash from investments (Line.8 minus Line.7 minus Line 4) 58,0,97 79,08,4 Cash from Financing and Miscellaneous Sources 6. Cash provided (applied): 6. Surplus notes, capital notes Capital and paid in surplus, less treasury stock (9,76,59) (74,74,88) 6. Borrowed funds (9,4) (,59) 6.4 Net deposits on deposit-type contracts and other insurance liabilities (47,09,066) (78,55,9) 6.5 Dividends to stockholders 0,8,84,75,6 6.6 Other cash provided (applied) 4,58,77 (,64,77) 7. Net cash from financing and miscellaneous sources (Lines 6. to 6.4 minus Line 6.5 plus Line 6.6) (7,844,0) (95,85,87) RECONCILIATION OF CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS 8. Net change in cash, cash equivalents and short-term investments (Line, plus Lines 5 and 7) 7,08,889,879, Cash, cash equivalents and short-term investments: 9. Beginning of year 48,79,557 44,850, 9. End of year (Line 8 plus Line 9.) 85,8,446 48,79,557 Note: Supplemental disclosures of cash flow information for non-cash transactions: Exchanges of invested assets reported as purchases and sales. 4,46,9,97,94 5

6 6 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY ANALYSIS OF OPERATIONS BY LINES OF BUSINESS Ordinary 6 Group Accident and Health Aggregate of All Total Industrial Life Life Insurance Individual Annuities Supplementary Contracts Credit Life (Group and Individual) Life Insurance (a) Annuities Group Credit (Group and Individual) Other Other Lines of Business. Premiums and annuity considerations for life and accident and health contracts 08,7, ,979,977 55, ,8 0, ,44. Considerations for supplementary contracts with life contingencies 6,900 6,900. Net investment income 56,0,65 8,064,459 0,97,86,544,6 866,8 898, ,8,04 6,,7 4. Amortization of Interest Maintenance Reserve (IMR) 6,99,50,9,00,9,964 85,68 94,75 97, ,8 665,7 5. Separate Accounts net gain from operations excluding unrealized gains or losses 0 6. Commissions and expense allowances on reinsurance ceded 5,690,004 0,0,5 4, ,07 0 4,67,9 7. Reserve adjustments on reinsurance ceded (,665,476) (488,00) (7,558) (,05,95) 8. Miscellaneous Income: 8. Fees associated with income from investment management, administration and contract guarantees from Separate Accounts 0 8. Charges and fees for deposit-type contracts Aggregate write-ins for miscellaneous income,05,65 0,05, Totals (Lines to 8.) 75,86,99 0 5,57,990,76,58 4,046,88 0,058,7 995,84 (5,05) 0 (,95,45) 6,788,90 0. Death benefits 7,68,494 4,5,47,446,077. Matured endowments (excluding guaranteed annual pure endowments) 76, ,766 8,406. Annuity benefits 7,70,05 5,77,94,964,8. Disability benefits and benefits under accident and health contracts 408,44 (4,8) 0 450,75 4. Coupons, guaranteed annual pure endowments and similar benefits,808, Surrender benefits and withdrawals for life contracts 75,97,5 68,60,86 6,676,6 6. Group conversions 0 7. Interest and adjustments on contract or deposit-type contract funds 6,86,609,56,007,408,54 4, ,7 8. Payments on supplementary contracts with life contingencies,48,45,48,45 9. Increase in aggregate reserves for life and accident and health contracts (06,6,60) (89,95,) (7,897,7) (,57) (,070,65) (,97,0) (6,5) (6,078,8) 0. Totals (Lines 0 to 9) 4,9, ,97,59 7,95,6,448,460 0,44,8,07,50 (48,64) 0 (5,68,080) 0. Commissions on premiums, annuity considerations and deposit-type contract funds (direct business only) 8,699, ,,5,40 0 4, , ,5, Commissions and expense allowances on reinsurance assumed 58, ,46 0, ,8 0 6,57 0. General insurance expenses 7,75,70,84,77,84,488 8,60 9,506 96,957 8,47 0,4, ,98 4. Insurance taxes, licenses and fees, excluding federal income taxes,79,40,956,769 5,4 8,88 9,999 0,78 4,000 4,49 4,74 5. Increase in loading on deferred and uncollected premiums (8,086) (8,049) (,07) 6. Net transfers to or (from) Separate Accounts net of reinsurance 0 7. Aggregate write-ins for deductions 9,998,8 0 9,99,949 5, Totals (Lines 0 to 7) 64,59, ,04,68 9,69,5,9,98 0,50,9,4,945 (4,59) 0 (9,9) 80,57 9. Net gain from operations before dividends to policyholders and federal income taxes (Line 9 minus Line 8) 0,87,05 0 4,,8,05,9,,95 0 (,47,66) (9,0) (8,54) 0 (,8,59) 5,986,57 0. Dividends to policyholders 856,06 856,06 0. Net gain from operations after dividends to policyholders and before federal income taxes (Line 9 minus Line 0) 9,970,999 0,477,76,05,9,,95 0 (,47,66) (9,0) (8,54) 0 (,8,59) 5,986,57. Federal income taxes incurred (excluding tax on capital gains) 7,65,500 5,4,85,06,7 96,88 (55,08) (5,86) (,479) (68,05),095,0. Net gain from operations after dividends to policyholders and federal income taxes and before realized capital gains or (losses) (Line minus Line ),55,499 0 (,865,5),97,876 77,070 0 (956,579) (,96) (5,05) 0 (,85,054),89,7 DETAILS OF WRITE-INS Miscellaneous Income,05,65 0,05, Summary of remaining write-ins for Line 8. from overflow page Totals (Lines 08.0 thru 08.0 plus 08.98) (Line 8. above),05,65 0,05, Change in contingency reserve 9,955,05 9,955, Fines and Penalties 7,800 7, Miscellaneous write-in 5, 5, 798. Summary of remaining write-ins for Line 7 from overflow page Totals (Lines 70 thru 70 plus 798) (Line 7 above) 9,998,8 0 9,99,949 5, (a) Includes the following amounts for FEGLI/SGLI: Line, Line 0, Line 6, Line, Line 4

7 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY ANALYSIS OF INCREASE IN RESERVES DURING THE YEAR Ordinary 6 Group Total Industrial Life Life Insurance Individual Annuities Supplementary Contracts Credit Life (Group and Individual) Life Insurance 8 Annuities Involving Life or Disability Contingencies (Reserves) (Net of Reinsurance Ceded). Reserve December, prior year,48,946,468 0,9,606,48 9,994,909 5,40,77 0 4,708,794 5,95,554. Tabular net premiums or considerations 0,00,877 8,60,899 55,79 6,900,046,86. Present value of disability claims incurred 0 XXX 4. Tabular interest 09,97,09 00,55,459 7,484,800 5,50 65,79 96,5 5. Tabular less actual reserve released 8,087,475 4,86,99,684,5,576,0 6. Increase in reserve on account of change in valuation basis Change in excess of VM-0 deterministic/stochastic reserve over net premium reserve 0 XXX XXX XXX XXX XXX XXX 7. Other increases (net),000,000,000, Totals (Lines to 7),599,7,9 0,45,6,796,84,49 7,57, ,80,459 7,887,85 9. Tabular cost 8,990,068 79,59,789 XXX,60,79 0. Reserves released by death 9,99,779 9,9,665 XXX XXX 80,4 XXX. Reserves released by other terminations (net) 9,98,809 0,45,7 5,006,8,47,95,40. Annuity, supplementary contract and disability payments involving life contingencies 9,950,450 5,77,94,48,45,964,8. Net transfers to or (from) Separate Accounts 0 4. Total Deductions (Lines 9 to ) 5,,06 0,708,59 0,744,756,48,45 0,74,80,889, Reserve December, current year,48,99,0 0,0,655,05,097,77 5,009,0 0,68,69,998,5

8 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT OF NET INVESTMENT INCOME Collected During Year Earned During Year. U.S. Government bonds (a),85,744,807,775. Bonds exempt from U.S. tax (a). Other bonds (unaffiliated) (a) 40,490,455 7,54,980. Bonds of affiliates (a). Preferred stocks (unaffiliated) (b),685,57,98,85. Preferred stocks of affiliates (b). Common stocks (unaffiliated) 804, ,748. Common stocks of affiliates. Mortgage loans (c),95,74,845, Real estate (d) 5 Contract loans,0,499 6,45,96 6 Cash, cash equivalents and short-term investments (e) 5,648 57,9 7 Derivative instruments (f),608,94,85, 8. Other invested assets,48,59,48,59 9. Aggregate write-ins for investment income,768, Total gross investment income 66,67,4 60,59,4. Investment expenses (g),95,57. Investment taxes, licenses and fees, excluding federal income taxes (g) 0. Interest expense (h), Depreciation on real estate and other invested assets (i) 5. Aggregate write-ins for deductions from investment income 0 6. Total deductions (Lines through 5),955, Net investment income (Line 0 minus Line 6) 56,0,649 DETAILS OF WRITE-INS 090. Miscellaneous Investment Income,768, Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 090 thru 090 plus 0998) (Line 9, above),768, Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 thru 50 plus 598) (Line 5, above) 0 (a) Includes $ 5,8,09 accrual of discount less $ 6,55,40 amortization of premium and less $,797,9 paid for accrued interest on purchases. (b) Includes $ (8,948) accrual of discount less $ (6,055) amortization of premium and less $ 0 paid for accrued dividends on purchases. (c) Includes $ 8,68 accrual of discount less $ amortization of premium and less $ paid for accrued interest on purchases. (d) Includes $ for company s occupancy of its own buildings; and excludes $ interest on encumbrances. (e) Includes $ 55, accrual of discount less $ 0 amortization of premium and less $ 0 paid for accrued interest on purchases. (f) Includes $ 0,540 accrual of discount less $ amortization of premium. (g) Includes $ investment expenses and $ investment taxes, licenses and fees, excluding federal income taxes, attributable to segregated and Separate Accounts. (h) Includes $ interest on surplus notes and $ interest on capital notes. (i) Includes $ depreciation on real estate and $ depreciation on other invested assets. EXHIBIT OF CAPITAL GAINS (LOSSES) 4 5 Total Realized Capital Gain (Loss) (Columns + ) Change in Unrealized Capital Gain (Loss) Change in Unrealized Foreign Exchange Capital Gain (Loss) Realized Gain (Loss) On Sales or Maturity Other Realized Adjustments. U.S. Government bonds Bonds exempt from U.S. tax 0. Other bonds (unaffiliated),668,698 (,50),57, Bonds of affiliates Preferred stocks (unaffiliated) 90,7 0 90,7 (9,750) 0. Preferred stocks of affiliates Common stocks (unaffiliated) (47,5) 0 (47,5) (0,8) 0. Common stocks of affiliates Mortgage loans Real estate Contract loans 0 6. Cash, cash equivalents and short-term investments 0 (00) 0 7. Derivative instruments Other invested assets 95, ,57 0,77, Aggregate write-ins for capital gains (losses) Total capital gains (losses),006,989 (,50),695,79 0,550,4 0 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 090 thru 090 plus 0998) (Line 9, above)

9 9 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT - PART - PREMIUMS AND ANNUITY CONSIDERATIONS FOR LIFE AND ACCIDENT AND HEALTH CONTRACTS Ordinary 5 Group Accident and Health Aggregate of All Total Industrial Life Life Insurance Individual Annuities Credit Life (Group and Individual) Life Insurance Annuities Group Credit (Group and Individual) Other Other Lines of Business FIRST YEAR (other than single). Uncollected Deferred and accrued Deferred, accrued and uncollected:. Direct Reinsurance assumed Reinsurance ceded Net (Line + Line ) Advance Line.4 - Line Collected during year: 6. Direct 8,04 0 4, (60,948) 0 6. Reinsurance assumed Reinsurance ceded (5) 0 (7) Net 84, , (60,968) 0 7. Line 5 + Line , , (60,968) 0 8. Prior year (uncollected + deferred and accrued - advance) First year premiums and considerations: 9. Direct 8, , (60,948) 0 9. Reinsurance assumed Reinsurance ceded (5) 0 (7) Net (Line 7 - Line 8) 84, , (60,968) 0 SINGLE 0. Single premiums and considerations: 0. Direct 97,6 0 97, Reinsurance assumed Reinsurance ceded Net 97,6 0 97, RENEWAL. Uncollected (,85,707) 0 (,04,6) ,0 0 59, Deferred and accrued 6,0, ,9,60 0 0, Deferred, accrued and uncollected:. Direct 9,44,4 0 9,8,7 94,6 0,050 0,0 0 55, Reinsurance assumed,, 0,6, ,6 0. Reinsurance ceded 6,88,48 0 6,9,6 94, ,9 0.4 Net (Line + Line ) 4,76,96 0 4,05, ,050 0,0 0 59, Advance 979, , , , Line.4 - Line 4,97,06 0,809, ,050 0 (5,67) 0 (48,069) 0 6. Collected during year: 6. Direct 90,7, 0 65,7,9,79, ,486 0,07 0,444, Reinsurance assumed 4,67,5 0,886,790, ,05 0 7, Reinsurance ceded 7,099, ,955,75,68, ,096 0,700, Net,40,584 0,654,7 55, , , Line 5 + Line 6.4 5,77, ,464,5 55, ,56 0 (5,67) 0 (57,00) 0 8. Prior year (uncollected + deferred and accrued - advance) 7,06,77 0 7,86,4 0 0,98 0 (9,4) 0 (5,) 0 9. Renewal premiums and considerations: 9. Direct 77,5,60 0 5,9,979,7,0 0 98,8 0 6,8 0,55, Reinsurance assumed,0,40 0,649,55, ,40 0 8, Reinsurance ceded 70,85, ,, , ,096 0,697, Net (Line 7 - Line 8) 08,4, ,67,8 55, ,8 0, , 0 TOTAL 0. Total premiums and annuity considerations: 0. Direct 77,5,7 0 5,66,08,7,0 0 98,8 0 6,8 0,474, Reinsurance assumed,0,8 0,650,477, ,40 0 8, Reinsurance ceded 70,85,8 0 47,,58 648, ,096 0,697, Net (Lines ) 08,7, ,979,977 55, ,8 0, ,44 0

10 0 DIVIDENDS AND COUPONS APPLIED (included in Part ) ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT - PART - DIVIDENDS AND COUPONS APPLIED, REINSURANCE COMMISSIONS AND EXPENSE ALLOWANCES AND COMMISSIONS INCURRED (Direct Business Only) Ordinary 5 Group Accident and Health Total Industrial Life Life Insurance Individual Annuities Credit Life (Group and Individual) Life Insurance Annuities Group Credit (Group and Individual) Other Aggregate of All Other Lines of Business. To pay renewal premiums 4,55 4, All other 84,755 84, REINSURANCE COMMISSIONS AND EXPENSE ALLOWANCES INCURRED. First year (other than single):. Reinsurance ceded Reinsurance assumed Net ceded less assumed Single: 4. Reinsurance ceded 0 4. Reinsurance assumed 0 4. Net ceded less assumed Renewal: 5. Reinsurance ceded 5,690,004,0,5 4, ,07 0 4,67, Reinsurance assumed 58,005 7,46 0, ,8 0 6, Net ceded less assumed 5,, ,699 4, , ,60, Totals: 6. Reinsurance ceded (Page 6, Line 6) 5,690,004 0,0,5 4, ,07 0 4,67, Reinsurance assumed (Page 6, Line ) 58, ,46 0, ,8 0 6, Net ceded less assumed 5,, ,699 4, , ,60,676 0 COMMISSIONS INCURRED (direct business only) 7. First year (other than single) Single Renewal 8,699,08 4,,076,40 0 4, , ,5, Deposit-type contract funds Totals (to agree with Page 6, Line ) 8,699, ,,5,40 0 4, , ,5,675 0

11 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT - GENERAL EXPENSES Insurance 5 6 Accident and Health 4 Life Cost Containment All Other All Other Lines of Business Investment Total. Rent 6,747 5,68 88,65. Salaries and wages 8,9,0 59,666 8,984,688. Contributions for benefit plans for employees 876,665 6,9 98,577. Contributions for benefit plans for agents Payments to employees under non-funded benefit plans Payments to agents under non-funded benefit plans Other employee welfare Other agent welfare Legal fees and expenses,759,47 4,55,88,68 4. Medical examination fees Inspection report fees Fees of public accountants and consulting actuaries 969,579 68,474,08, Expense of investigation and settlement of policy claims 485,76 4,0 50,08 5. Traveling expenses 64,554 5,746 90,00 5. Advertising Postage, express, telegraph and telephone 66,08 4,66 70, Printing and stationery 9,7,77 4, Cost or depreciation of furniture and equipment Rental of equipment,78,86 6, Cost or depreciation of EDP equipment and software,65,86 5,48,750, Books and periodicals Bureau and association fees 68,6,888 80,4 6. Insurance, except on real estate,68,04 4,9 6.4 Miscellaneous losses Collection and bank service charges 0,658,04, Sundry general expenses 554,959 9,9 594,5 6.7 Group service and administration fees Reimbursements by uninsured plans Agency expense allowance Agents balances charged off (less $ recovered) Agency conferences other than local meetings Real estate expenses Investment expenses not included elsewhere 0 0,95,57,95,57 9. Aggregate write-ins for expenses 00, , General expenses incurred 6,4,74 0,,979 0,95,57 (a),9,58. General expenses unpaid December, prior year 4,778,056 6,08,095,50 6,099,87. General expenses unpaid December, current year 8,0,6 586,,58,75 0,47,84. Amounts receivable relating to uninsured plans, prior year 0 4. Amounts receivable relating to uninsured plans, current year 0 5. General expenses paid during year (Lines ),78, ,78 0,465,6 6,956,80 DETAILS OF WRITE-INS Transition and Special Services 00,000 00, Summary of remaining write-ins for Line 9. from overflow page Totals (Lines 09.0 thru 09.0 plus 09.98) (Line 9. above) 00, ,000 (a) Includes management fees of $ to affiliates and $ to non-affiliates. EXHIBIT - TAXES, LICENSES AND FEES (EXCLUDING FEDERAL INCOME TAXES) Insurance 4 5 Life Accident and Health All Other Lines of Business Investment Total. Real estate taxes State insurance department licenses and fees,49,58 56,677. State taxes on premiums,96,54 09,9,7,84 4. Other state taxes, including $ for employee benefits 78,779,66 9, U.S. Social Security taxes All other taxes (,406) (99) (,505) 7. Taxes, licenses and fees incurred,474,06 45,48 0 0,79,4 8. Taxes, licenses and fees unpaid December, prior year,88,5 87,458,969,97 9. Taxes, licenses and fees unpaid December, current year,09,875 77,8,70, Taxes, licenses and fees paid during year (Lines ) 4,6,70 55, ,59,5 EXHIBIT 4 - DIVIDENDS OR REFUNDS Life Accident and Health. Applied to pay renewal premiums 4,55 0. Applied to shorten the endowment or premium-paying period 0. Applied to provide paid-up additions 84, Applied to provide paid-up annuities 0 5. Total Lines through 4 99, Paid in cash 5,00 7. Left on deposit 84,7 8. Aggregate write-ins for dividend or refund options, Total Lines 5 through 8 987, 0 0. Amount due and unpaid 9,60. Provision for dividends or refunds payable in the following calendar year 567,478. Terminal dividends 0. Provision for deferred dividend contracts 0 4. Amount provisionally held for deferred dividend contracts not included in Line 0 5. Total Lines 0 through 4 586, Total from prior year 70, Total dividends or refunds (Lines ) 869,9 0 DETAILS OF WRITE-INS 080. Dividend to loan reduction, Summary of remaining write-ins for Line 8 from overflow page Totals (Lines 080 thru 080 plus 0898) (Line 8 above),77 0

12 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT 5 - AGGREGATE RESERVE FOR LIFE CONTRACTS Valuation Standard Total Industrial 4 Ordinary 5 Credit (Group and Individual) 6 Group AMER EXP.00% CRVM 75,948 75, AMER EXP.00% NLP 6,987 6, AMER EXP.5% NLP 5, 5, AMER EXP.50% CRVM,600,57,600, AMER EXP.50% NLP,70,67,70, CSI.00% NLP ANB 9,95 9, CSI.50% NLP ANB 75,78 75, CSO.5% NLP ANB,0, CSO.50% CRVM ANB,949,579,949, CSO.50% NLP ALB,57, CSO.50% NLP ANB,0,089,0, CSO.75% NLP ANB,40, CSO.00% CRVM ALB CSO.00% CRVM ANB 9,45,859 9,45, CSO.00% FPT ANB 47,487 47, CSO.00% NLP ALB,0, CSO.00% NLP ANB 6,58,00 6,58, CSO.5% NLP ANB,47, CSO.50% CRVM ANB 8,70 8, CSO.50% NLP ANB 5,58,99 5,58, CET.5% CRVM ALB,08, CET.5% CRVM ANB 7,6 7, CET.5% MOD ANB 47,898 47, CET.5% NLP ALB CET.5% NLP ANB 96,75 96, CET.50% CRVM ANB 4,797 4, CET.50% NLP ANB 5,489 5, CET.75% CRVM ANB 45,5 45, CET.75% NLP ANB 5, 5, CET.00% CRVM ALB 6,769 57,5 6, CET.00% CRVM ANB 49,7 49, CET.00% MOD ANB,0, CET.00% NJ ALB,5, CET.00% NJ ANB CET.00% NLP ALB,06, CET.00% NLP ANB 74, 74, CET.00%/.00% CRVM ANB 4, 4, CET.00%/.00% NLP ANB 0,768 0, CET.5% CRVM ALB 05,09 05, CET.50% CRVM ALB,550, CET.50% CRVM ANB 4,80,588 4,80, CET.50% NLP ALB,479, CET.50% NLP ANB 9,895 9, CET.50%/.5% CRVM ANB CET.50%/.50% MOD ANB 7,900 7, CET.50%/.50% NLP ANB 6,56 6, CET 4.00% CRVM ALB,46, CET 4.00% CRVM ANB 40,95 40, CET 4.00% MOD ANB 58,55 58, CET 4.00% NLP ANB,848, CET 4.50% CRVM ALB 59,79 59, CET 4.50% CRVM ANB,67,5,67, CET 4.50% MOD ANB 5,5 5, CET 4.50% NLP ALB 80,95 80, CET 4.50% NLP ANB 90,5 90, CET 5.50% NLP ALB 4,847 4, CSO.5% CRVM ALB,0,59,0, CSO.5% CRVM ANB,,0,, CSO.5% MOD ANB 65,687 65, CSO.5% NLP ALB 8,79 8, CSO.5% NLP ANB,698,895,698, CSO.50% CRVM ANB,75,086,75, CSO.50% NLP ALB,64, CSO.50% NLP ANB,707,7,707, CSO.75% CRVM ANB 4,4,48 4,4, CSO.75% NLP ANB,05,865,05, CSO.00% CRVM ALB 4,5,985 4,65, 50, CSO.00% CRVM ANB 8,,967 8,, CSO.00% MOD ALB 64,87 64, CSO.00% MOD ANB 658,5 658, CSO.00% NJ ALB,496,905,496, CSO.00% NJ ANB 9,07 9, CSO.00% NLP ALB 4,047,577 4,047, CSO.00% NLP ANB 7,590,4 7,590, CSO.00%/.00% CRVM ANB 8,750 8, CSO.00%/.00% NLP ANB 70,74 70, CSO.5% CRVM ALB 48,75 48, CSO.50% CRVM ALB 4,77,67 4,77, CSO.50% CRVM ANB 44,09,87 44,09, CSO.50% MOD ANB,504, CSO.50% NLP ALB,87,956,87, CSO.50% NLP ANB,98,0,98, CSO.50%/.5% CRVM ANB 74,46 74, CSO.50%/.5% NLP ANB 977,94 977, CSO.50%/.50% CRVM ANB 4,6 4, CSO.50%/.50% MOD ANB 774, , CSO.50%/.50% NLP ALB 60,879 60, CSO.50%/.50% NLP ANB,8,57,8, CSO.50%/.75% NLP ALB 8,695 8, CSO 4.00% CRVM ALB,008,88,998,88 0, CSO 4.00% CRVM ANB 8,940,0 8,80,44 9, CSO 4.00% MOD ANB,77,97,77,97

13 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT 5 - AGGREGATE RESERVE FOR LIFE CONTRACTS Valuation Standard Total Industrial 4 Ordinary 5 Credit (Group and Individual) 6 Group CSO 4.00% NLP ALB 49,77 49, CSO 4.00% NLP ANB,787,49,786, CSO 4.50% CRVM ALB 49,7,455 49,7, CSO 4.50% CRVM ANB 68,,897 68,, CSO 4.50% MOD ANB 8,496 8, CSO 4.50% NLP ALB,09,47,09, CSO 4.50% NLP ANB 9,96,007 9,96, CSO 5.00% CRVM ALB 6,55 6, CSO 5.00% NLP ANB 8,77 8, CSO 5.50% CRVM ALB 4,00,994 4,00, CSO 5.50% CRVM ANB 55,7 55, CSO 5.50% NLP ALB 897, , CSO 5.50% NLP ANB 6,85 6, CSO 6.00% CRVM ALB 9,7 9, CSO 6.00% CRVM ANB 5,59,070 5,59, CSO 6.00% NLP ANB,46, CET 4.00% CRVM ALB 9,980 9, CET 4.00% NLP ALB 77,989 77, CET 4.00% NLP ANB 0,969 0, CET 4.50% CRVM ALB 6,5 6, CET 4.50% CRVM ANB 4,59 4, CET 4.50% NLP ANB CET 5.00% CRVM ALB 94,9 94, CET 5.00% CRVM ANB,85, CET 5.00% NLP ALB CET 5.00% NLP ANB,40, CET 5.50% CRVM ALB,084, CET 5.50% CRVM ANB 55,78 55, CET 5.50% NLP ALB CET 5.50% NLP ANB 40,4 40, CET 5.50/4.00% NLP ALB CET 6.00% CRVM ANB 554, , CET 6.00% NLP ANB 7,889 7, CSO 0.49% CRVM ALB 67,69 67, CSO 0.54% CRVM ALB,904,,904, CSO 0.6% CRVM ALB,485,4,485, CSO 0.66% CRVM ALB,40, CSO.0 grade 4.5% CRVM ALB 7,65,984 7,65, CSO.00% CRVM ALB 9,88,064 9,88, CSO.00% CRVM ANB 696, , CSO.0% CRVM ALB 50,679,70 50,679, CSO.5% CRVM ALB 6,5,55 6,5, CSO.8% CRVM ALB,044,96,044, CSO.49% CRVM ALB 0,844,4 0,844, CSO.50% CRVM ALB 655,40 655, CSO.50% CRVM ANB CSO.50% NLP ANB 70,654 70, CSO.68% CRVM ALB,74,097,74, CSO 4.00% CRVM ALB 54,559,00 54,559, CSO 4.00% CRVM ANB 58,49,64 58,49, CSO 4.00% NLP ALB,60,49,60, CSO 4.00% NLP ANB 796,68 796, CSO 4.50% CRVM ALB,88,4,88, CSO 4.50% CRVM ANB 58,78,068 58,78, CSO 4.50% NLP ALB 5,560,7 5,560, CSO 4.50% NLP ANB 8,794,4 6,09,860,70, CSO 5.00% CRVM ALB,745,95,745, CSO 5.00% CRVM ANB 4,058,68 4,058, CSO 5.00% NLP ALB,90,956,90, CSO 5.00% NLP ANB,075,4 8,76,89, CSO 5.50% CRVM ALB 68,7,67 68,7, CSO 5.50% CRVM ANB 6,9,74 6,9, CSO 5.50% NLP ALB 4,,469 4,, CSO 5.50% NLP ANB 4,47,546 4,9 4,, CSO 5.50/4.00% CRVM ALB,68,6,68, CSO 5.50/4.00% NLP ALB 8,6 8, CSO 6.00% CRVM ALB,56,79,56, CSO 6.00% CRVM ANB 9,044,78 9,044, CSO 6.00% NLP ALB 740,7 740, CSO 6.00% NLP ANB,860,5 4,55,745, % 00 CSO 4.00% CRVM ALB CSO.50% CRVM ALB 9,7 9, CSO 4.00% ALB CRVM 49,56 49, CSO 4.00% CRVM ALB 0,50 0, CSO 4.00% CRVM ANB Cash Value 5,855,78 5,855, Factors 79,650 79, Unearned Premium 70,574 6,80 6, Totals (Gross),90,07,744 0,888,57,49 0,66, Reinsurance ceded 06,08,50 06,08, Life Insurance: Totals (Net),795,899,4 0,78,6,97 0,66, SA 7.00% 8,76 XXX 8,76 XXX A.50% 04 XXX 04 XXX GAM.00% 8,060 XXX XXX 8, GAM 6.00% 66,967 XXX XXX 66, GAM 6.00% 7,48,05 XXX 659,7 XXX 6,8, IAM 0.75% 0,68 XXX 0,68 XXX IAM.50% 7,6 XXX 7,6 XXX IAM.00% Def,89,74 XXX,89,74 XXX IAM 4.00% Def 7,749,5 XXX 7,749,5 XXX IAM 4.50% Def,07,5 XXX,07,5 XXX IAM 5.50% Def,076,569 XXX,076,569 XXX.

14 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT 5 - AGGREGATE RESERVE FOR LIFE CONTRACTS Valuation Standard Total Industrial 4 Ordinary 5 Credit (Group and Individual) 6 Group IAM 6.00% 5,59,6 XXX 5,59,6 XXX IAM 7.00% 74,98 XXX 74,98 XXX IAM 7.50%,0 XXX,0 XXX GAM 6.00%,7,6 XXX XXX,7, GAM 6.5% 6,69 XXX XXX 6, GAM 6.50% 5,580 XXX XXX 5, GAM 6.75% 5,47 XXX XXX 5, GAM 7.00% 95,00 XXX XXX 95, GAM 7.5% 70,48 XXX XXX 70, GAM 7.75%,6,590 XXX XXX,6, GAM 8.00%,550 XXX XXX, GAM 8.5% 84,40 XXX XXX 84, GAM 8.75% 7,54 XXX XXX 7, IAM 0.50%,774 XXX,774 XXX IAM 4.00% Def 0,0,58 XXX 0,0,58 XXX IAM 5.5% Def,665,94 XXX,665,94 XXX IAM 5.50% Def,575,99 XXX,575,99 XXX IAM 6.00% 76,45 XXX 76,45 XXX IAM 6.00% Def 7,86,447 XXX 7,86,447 XXX IAM 6.5% 480,594 XXX 480,594 XXX IAM 6.5% Def,656,54 XXX,656,54 XXX IAM 6.50% 57,80 XXX 57,80 XXX IAM 6.50% Def 57,60 XXX 57,60 XXX IAM 6.75% 5,4 XXX 6,05 XXX 9, IAM 7.00% 44,49 XXX 8,849 XXX 5, IAM 7.5% 47,7 XXX 47,7 XXX IAM 7.75% 70,77 XXX 70,77 XXX IAM 8.00%,56 XXX,56 XXX IAM 8.5% 6,95 XXX 6,95 XXX IAM 8.50% 7,405 XXX 7,405 XXX IAM 8.50% Def 0,8 XXX 0,8 XXX IAM 8.75% 58,57 XXX 58,57 XXX IAM 9.00% Def 4,0,00 XXX 4,0,00 XXX IAM 9.5% Def 790,59 XXX 790,59 XXX A 4.00% 0,84 XXX 9,97 XXX 0, A 5.50%,854 XXX,854 XXX A 6.00% 5,77 XXX 5,77 XXX A 6.50% 84,956 XXX 84,956 XXX A 6.75%,467 XXX,467 XXX A 7.00% 6,69 XXX 6,69 XXX Fund Value 97,65,8 XXX 97,65,8 XXX Totals (Gross) 78,66,76 XXX 64,68,50 XXX,998, Reinsurance ceded 5,540,77 XXX 5,540,77 XXX Annuities: Totals (Net) 6,095,990 XXX,097,78 XXX,998, SA.50%,768, SA.00%,678, SA 7.00%,04, A.00% IAM.00% 9,45 9, IAM 5.50% 0,84 0, IAM 6.00% 59,467 59, IAM 7.00% 5,40 5, IAM 8.75% 9,0 9, A 4.00% 8,05 8, A 5.5% 0,008 0, A 6.00% 88,576 88, A 6.5% 405,40 405, A 6.75% 405,8 405, A 7.00% 50,95 50, A 7.5%,, A 7.50% 7,67 7, A 7.75% 4,55 4, A 8.5% 0,76 0, A 8.75% 4,56 4, A.50% 5,57 5, A.0%,60, A.75% 8,4 8, A 4.00% 77,78 77, A 4.5% 5,74 5, A 4.5% 98,994 98, A 4.50%,606,705,606, A 5.00% 5,6 5, A 5.5% 7,947 7, A 5.50% 76,0 76, A 5.50% 5,87 5, A 6.00% 99,790 99, A 6.50%,86, A 6.75% 7,8 7, A 6.75% 7,7 7, A 7.00% 4,887 4, A 7.00% 6,785 6, A.75% 49,765 49, A 4.00%,699, Totals (Gross) 5,45, ,45, Reinsurance ceded 5,868 5, SCWLC: Totals (Net) 5,009,0 0 5,009, ADB w/58 CSO.00% ADB w/58 CSO.50% ADB w/58 CSO.75%,078,5,078, ADB w/58 CSO 4.00% ADB w/80 CSO.00% Factors,67,67.

15 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT 5 - AGGREGATE RESERVE FOR LIFE CONTRACTS Valuation Standard Total Industrial 4 Ordinary 5 Credit (Group and Individual) 6 Group Totals (Gross),,884 0,, Reinsurance ceded Accidental Death Benefits: Totals (Net),,75 0,, INTERCO DIS w/58 CSO.00%,666,460,666, INTERCO DIS w/58 CSO.50% 7,598 7, INTERCO DIS w/58 CSO 4.00% 8,007 8, INTERCO DIS w/58 CSO 4.50% 9,576 9, INTERCO DIS w/80 CSO 4.50% 5,074 5, CIDA w/80 CSO 4.00% CIDA w/80 CSO 4.50% 56,677 56, Unearned COI 4,7 4, Totals (Gross),580,696 0,580, Reinsurance ceded,54, Disability-Active Lives: Totals (Net),578,55 0,578, INTERCO DIS w/58 CSO.00%,575,76,575, INTERCO DIS w/58 CSO.50% 6,04 6, INTERCO DIS w/58 CSO 4.00% 8,09 8, INTERCO DIS w/58 CSO 4.50% 5,9 5, INTERCO DIS w/80 CSO 4.00%,90, INTERCO DIS w/80 CSO 4.50% 5,07,09 5,07, Totals (Gross) 8,,6 0 8,, Reinsurance ceded 500, 500, Disability-Disabled Lives: Totals (Net) 7,6,49 0 7,6, Additional Actuarial Reserve - Extension Benefits 5,65,795 5,65, Asset Adequacy Reserve 70,000,000 70,000, Deficiency Reserves 6,509,64 6,507,7, GIO 6,084 6, Immediate Payment of Claims 5,866 5, Nondeduction of Deferred Premium 77,774 77, Return of Gross Premium,90, Surrender values in excess of basic reserves 40,500 40, UPI Bonus Reserves 9,5,96 9,5, Totals (Gross),00,986 0,008,67 0, Reinsurance ceded,97,698,97, Miscellaneous Reserves: Totals (Net) 0,08,88 0 0,080,974 0, Totals (Net) - Page, Line,48,99,00 0,0,76,49 0 7,66,88.

16 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT 5 - INTERROGATORIES. Has the reporting entity ever issued both participating and non-participating contracts? Yes [ X ] No [ ]. If not, state which kind is issued.. Does the reporting entity at present issue both participating and non-participating contracts? Yes [ ] No [ X ]. If not, state which kind is issued. Non-participating. Does the reporting entity at present issue or have in force contracts that contain non-guaranteed elements? Yes [ X ] No [ ] If so, attach a statement that contains the determination procedures, answers to the interrogatories and an actuarial opinion as described in the instructions. 4. Has the reporting entity any assessment or stipulated premium contracts in force? Yes [ ] No [ X ] If so, state: 4. Amount of insurance? $ 0 4. Amount of reserve? $ 0 4. Basis of reserve: 4.4 Basis of regular assessments: 4.5 Basis of special assessments: 4.6 Assessments collected during the year $ 0 5. If the contract loan interest rate guaranteed in any one or more of its currently issued contracts is less than 5%, not in advance, state the contract loan rate guarantees on any such contracts. 6. Does the reporting entity hold reserves for any annuity contracts that are less than the reserves that would be held on a standard basis? Yes [ X ] No [ ] 6. If so, state the amount of reserve on such contracts on the basis actually held: $,646,54 6. That would have been held (on an exact or approximate basis) using the actual ages of the annuitants; the interest rate(s) used in 6.; and the same mortality basis used by the reporting entity for the valuation of comparable annuity benefits issued to standard lives. If the reporting entity has no comparable annuity benefits for standard lives to be valued, the mortality basis shall be the table most recently approved by the state of domicile for valuing individual annuity benefits: $ 8,60,688 Attach statement of methods employed in their valuation. 7. Does the reporting entity have any Synthetic GIC contracts or agreements in effect as of December of the current year? Yes [ ] No [ X ] 7. If yes, state the total dollar amount of assets covered by these contracts or agreements $ 0 7. Specify the basis (fair value, amortized cost, etc.) for determining the amount: 7. State the amount of reserves established for this business: $ Identify where the reserves are reported in the blank: 8. Does the reporting entity have any Contingent Deferred Annuity contracts or agreements in effect as of December of the current year? Yes [ ] No [ X ] 8. If yes, state the total dollar amount of account value covered by these contracts or agreements: $ 0 8. State the amount of reserves established for this business: $ 0 8. Identify where the reserves are reported in the blank: 9. Does the reporting entity have any Guaranteed Lifetime Income Benefit contracts, agreements or riders in effect as of December of the current year? Yes [ ] No [ X ] 9. If yes, state the total dollar amount of any account value associated with these contracts, agreements or riders: $ 0 9. State the amount of reserves established for this business: $ 0 9. Identify where the reserves are reported in the blank: EXHIBIT 5A - CHANGES IN BASES OF VALUATION DURING THE YEAR Valuation Basis 4 Description of Valuation Class Changed From Changed To Increase in Actuarial Reserve Due to Change Total (Column 4, only) NONE

17 4 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT 6 - AGGREGATE RESERVES FOR ACCIDENT AND HEALTH CONTRACTS 4 Other Individual Contracts Credit Accident Total Group Accident and Health and Health (Group and Individual) Collectively Renewable Non-Cancelable Guaranteed Renewable Non-Renewable for Stated Reasons Only Other Accident Only ACTIVE LIFE RESERVE. Unearned premium reserves,587,475 8,54 0,46 50,500,49,075,454 4,65. Additional contract reserves (a) 86,,86 4, ,05 85,470,4 9,0 705,586. Additional actuarial reserves-asset/liability analysis 0 4. Reserve for future contingent benefits 0 5. Reserve for rate credits 0 6. Aggregate write-ins for reserves Totals (Gross) 87,798,76,5 0 0,5 9,707 86,970,6,4, ,75 8. Reinsurance ceded,94,475 67,68, ,07 9. Totals (Net) 86,404,86,5 0 0,5 9,707 86,4,004,4 0 4,678 CLAIM RESERVE 0. Present value of amounts not yet due on claims,,4,46,98 804,05 8,48,74 68,80 46,576. Additional actuarial reserves-asset/liability analysis 0. Reserve for future contingent benefits 0. Aggregate write-ins for reserves Totals (Gross),,4,46, ,05 0 8,48,74 68, , Reinsurance ceded,968,9,40,988 94,67 46, Totals (Net) 9,4, 5, ,05 0 8,054,75 68, TOTAL (Net) 5,647,497 9, ,67 9,707 4,97,79 9,05 0 4, TABULAR FUND INTEREST 4,760, , ,709,9 0,87 9 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 6 from overflow page TOTALS (Lines 060 thru 060 plus 0698) (Line 6 above) Summary of remaining write-ins for Line from overflow page TOTALS (Lines 0 thru 0 plus 98) (Line above) (a) Attach statement as to valuation standard used in calculating this reserve, specifying reserve bases, interest rates and methods. 9 All Other

18 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY Statement of Valuation Standards for Exhibit 6 Reserves December, 07 A. Maximum Interest Rates:. Issues prior to 980: 4.0%. Issues of 980 through 98: 4.5%. Issues of 98 through 986: 6.0% 4. Issues of 987 through 99: 5.5% 5. Issues of 99 through 994: 5.0% 6. Issues of 995 through 0: 4.5% 7. Issues 0 and later:.5% B. Mortality Tables:. Long-Term Care: 98 GAM. Other Benefits: 958 CSO and 980 CSO C. Morbidity Tables:. Long-Term Care including ROP: Company Experience Claim Cost Tables. Hospital, Medical, DI & Surgical Benefits: 974 Medical Expense Tables. Accidental Death Benefits: 959 ADB Table 4. Other Benefits: 985 NAIC Cancer Table and other standardized tables or Company Experience Claim Cost Tables D. Voluntary Lapse Rate:. Long-Term Care including ROP: a. Issued Prior to 0/99: 8% level b. Issued 0/99 through 997: 5% grading to 5% c. Issued in 998: 8% grading to % d. Issued later than 998: 6.4% grading to.4%. ATL Cancer, Disability, Hospital, Medical: 0% for 5 years, then 9% thereafter. Other Benefits: Not Applicable Termination rates are capped as follows:. Issues prior to 0/99: a. Total Termination Rates: Min ( 00% of pricing termination rate, 8% ). Issues 0/99 through 998: a. Total Termination Rates: Min ( 80% of pricing termination rate, 8% ). Issues 999 and later: a. Voluntary Lapse Rates: Min ( 00% of pricing lapse rates, 8% ) E. Valuation Method. Issues Prior to 0//99: a. Long-Term Care: Two Year Preliminary Term with prospective unlocking beginning Jan, 007 b. ATL Long-Term Care ROP: Net Level c. All Other Business: Two Year Preliminary Term. Issues on or after 0//99: a. Long-Term Care and Transport ROP: One Year Preliminary Term b. ATL Long-Term Care ROP: Net Level c. All Other Business: Net Level, One or Two Year Preliminary Term, as appropriate to the line being valued. Reserves are computed as mid-terminal reserves plus unearned net premiums except for some non-ltc business. 4.

19 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT 7 - DEPOSIT TYPE CONTRACTS Total Guaranteed Interest Contracts Annuities Certain 4 Supplemental Contracts 5 Dividend Accumulations or Refunds 6 Premium and Other Deposit Funds. Balance at the beginning of the year before reinsurance 4,57,968 7,49,687,506 69,04,685 4,56,9,678,899. Deposits received during the year 0,560, ,579,77,50,65 (69,87). Investment earnings credited to the account 5,867,5,449,75 9,7, ,4 688,75 4. Other net change in reserves (967,80) 0 8, (969,05) 0 5. Fees and other charges assessed Surrender charges Net surrender or withdrawal payments 6,4,440 40,699,06,85 8,566,859,50,8,546, Other net transfers to or (from) Separate Accounts Balance at the end of current year before reinsurance (Lines ) 95,66,460 (),05 6,76,560,74,075 0,65, Reinsurance balance at the beginning of the year (6,550,0) 0 (,506) (,97,964),08,08 (5,67,778). Net change in reinsurance assumed 8, ,07 (4,979). Net change in reinsurance ceded (757,4) 0 (,454) (5,67) 0 (70,). Reinsurance balance at the end of the year (Lines 0+-) (5,784,768) 0 (,05) (,89,7),07,45 (4,95,54) 4. Net balance at the end of current year after reinsurance (Lines 9 + ) 89,878,69 () 0 59,84, 4,795,0 5,699,40

20 . Due and unpaid:. In course of settlement: ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT 8 - CLAIMS FOR LIFE AND ACCIDENT AND HEALTH CONTRACTS PART - Liability End of Current Year Ordinary 6 Group Accident and Health Total Industrial Life Life Insurance Individual Annuities Supplementary Contracts Credit Life (Group and Individual) Life Insurance Annuities Group Credit (Group and Individual). Direct Reinsurance assumed Reinsurance ceded Net Resisted. Direct Reinsurance assumed Reinsurance ceded Net 0 0 (b) 0 (b) 0 0 (b) 0 (b) Other 6. Other. Direct 7,967, ,86,4 64, , 0,05,874. Reinsurance assumed,40 0 7, , ,46. Reinsurance ceded 8,7, ,667,66 46, ,77.4 Net 55,97,6 0 (b) 54,79,859 (b) 7,99 0 (b) 0 (b) 0 0 (b) 6,7 (b) 0 (b),46,74. Incurred but unreported:. Direct 49,75,0 0 9,97, ,66 0 9,575,75. Reinsurance assumed 44, ,87 0,745. Reinsurance ceded 6,440, ,058, ,9.4 Net 4,74,65 0 (b),9,644 (b) 0 0 (b) 0 (b) 0 0 (b) 06,44 (b) 0 (b) 9,54,58 4. TOTALS 4. Direct,78,698 0,58,0 64, , ,78, Reinsurance assumed 547,90 0 7, ,7 0 66,99 4. Reinsurance ceded 4,558,649 0,75,9 46, , Net 99,707,95 (a) 0 (a) 88,705,50 7, (a) 0 0,75 0 0,66,8 (a) Including matured endowments (but not guaranteed annual pure endowments) unpaid amounting to $ 0 in Column, $ 0 in Column and $ 0 in Column 7. (b) Include only portion of disability and accident and health claim liabilities applicable to assumed "accrued" benefits. Reserves (including reinsurance assumed and net of reinsurance ceded) for unaccrued benefits for Ordinary Life Insurance $ 7,6,49 Individual Annuities $ 0, Credit Life (Group and Individual) $ 0, and Group Life $ 0, are included in Page, Line, (See Exhibit 5, Section on Disability Disabled Lives); and for Group Accident and Health $ 5,90 Credit (Group and Individual) Accident and Health $ 0, and Other Accident and Health $ 9,7,8 are included in Page, Line (See Exhibit 6, Claim Reserve).

21 7 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT 8 - CLAIMS FOR LIFE AND ACCIDENT AND HEALTH CONTRACTS PART - Incurred During the Year Ordinary 6 Group Accident and Health Total Industrial Life (a) Life Insurance (b) Individual Annuities Supplementary Contracts Credit Life (Group and Individual) Life Insurance (c) Annuities Group Credit (Group and Individual). Settlements During the Year:. Direct 55,775, ,640, 0,870,69,8,0 0,76,464,964,8 9,9 0 8,08,060. Reinsurance assumed 4,4, 0,68,859 4, ,8 0 60,566. Reinsurance ceded 84,88, ,74,576 5,576,4, , ,685,65.4 Net (d) 75,7, 0 6,066,56 5,75,74,48,45 0,76,464,964, Liability December, current year from Part :. Direct,78,698 0,58,0 64, , ,78,599. Reinsurance assumed 547,90 0 7, ,7 0 66,99. Reinsurance ceded 4,558,649 0,75,9 46, ,09.4 Net 99,707, ,705,50 7, ,75 0 0,66,8. Amounts recoverable from reinsurers December, current year 4,8,09 0 4,80, , Liability December, prior year: 4. Direct 54,56, ,478,888,9, , , ,, Reinsurance assumed,89,706 0,88, , ,98 4. Reinsurance ceded 0,08,4 0 6,45,79,4, , , Net 7,84,0 0 6,,9 5, , ,49 0 0,0,50 5. Amounts recoverable from reinsurers December, prior year 5,64, ,6, , Incurred Benefits 6. Direct 4,9, ,59,447 8,04,84,8,0 0,70,604,964,8 8,47 0 8,55,4 6. Reinsurance assumed,95, ,58 4, (0,98) 0 588, Reinsurance ceded 88,07, ,500,44,708,08,757 0 (75,47) 0 50, ,689, Net 8,776, ,97,588 5,77,95,48,45 0,446,077,964,8 (4,8) 0 450,75 (a) Including matured endowments (but not guaranteed annual pure endowments) amounting to $ 0 in Line., $ 0 in Line.4. $ 0 in Line 6., and $ 0 in Line 6.4. (b) Including matured endowments (but not guaranteed annual pure endowments) amounting to $,5,7 in Line., $ 697,766 in Line.4. $,5,7 in Line 6., and $ 697,766 in Line 6.4. (c) Including matured endowments (but not guaranteed annual pure endowments) amounting to $ 8,406 in Line., $ 8,406 in Line.4. $ 8,406 in Line 6., and $ 8,406 in Line 6.4. (d) Includes $,6,5 premiums waived under total and permanent disability benefits. Other

22 ANNUAL STATEMENT FOR THE YEAR 07 OF THE WILCO LIFE INSURANCE COMPANY EXHIBIT OF NON-ADMITTED ASSETS Current Year Total Nonadmitted Assets Prior Year Total Nonadmitted Assets Change in Total Nonadmitted Assets (Col. - Col. ). Bonds (Schedule D) 0. Stocks (Schedule D):. Preferred stocks 0. Common stocks 0. Mortgage loans on real estate (Schedule B):. First liens 0. Other than first liens 0 4. Real estate (Schedule A): 4. Properties occupied by the company 0 4. Properties held for the production of income 0 4. Properties held for sale 0 5. Cash (Schedule E - Part ), cash equivalents (Schedule E - Part ) and short-term investments (Schedule DA) 0 6. Contract loans 68,7 6,86 (4,) 7. Derivatives (Schedule DB) 0 8. Other invested assets (Schedule BA) 0 9. Receivables for securities 0 0. Securities lending reinvested collateral assets (Schedule DL) 0. Aggregate write-ins for invested assets Subtotals, cash and invested assets (Lines to ) 68,7 6,86 (4,). Title plants (for Title insurers only) 0 4. Investment income due and accrued Premiums and considerations: 5. Uncollected premiums and agents' balances in the course of collection 6,090 0,69 4,79 5. Deferred premiums, agents' balances and installments booked but deferred and not yet due 0 5. Accrued retrospective premiums and contracts subject to redetermination Reinsurance: 6. Amounts recoverable from reinsurers,609,,0,467 (587,766) 6. Funds held by or deposited with reinsured companies Other amounts receivable under reinsurance contracts Amounts receivable relating to uninsured plans Current federal and foreign income tax recoverable and interest thereon Net deferred tax asset 97,66,89 6,598,97 64,98, Guaranty funds receivable or on deposit Electronic data processing equipment and software Furniture and equipment, including health care delivery assets Net adjustment in assets and liabilities due to foreign exchange rates Receivables from parent, subsidiaries and affiliates Health care and other amounts receivable, , ,9 5. Aggregate write-ins for other than invested assets,647,59 0 (,647,59) 6. Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines to 5) 0,58,67 64,7,09 6,9,68 7. From Separate Accounts, Segregated Accounts and Protected Cell Accounts 0 8. Total (Lines 6 and 7) 0,58,67 64,7,09 6,9, DETAILS OF WRITE-INS 98. Summary of remaining write-ins for Line from overflow page Totals (Lines 0 thru 0 plus 98)(Line above) Expenses Paid in Advance,647,59 0 (,647,59) Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 thru 50 plus 598)(Line 5 above),647,59 0 (,647,59) 8

23 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS Note # Description Page # Summary of Significant Accounting Policies and Going Concern 9. Accounting Changes and Corrections of Errors 9. Business Combinations and Goodwill 9. 4 Discontinued Operations 9. 5 Investments Joint Ventures, Partnerships and Limited Liability Companies Investment Income Derivative Instruments Income Taxes Information Concerning Parent, Subsidiaries and Affiliates 9.0 Debt 9. Retirement Plans, Deferred Compensation, Postemployment Benefits and Compensated Absences And Other Postretirement Benefit Plans 9. Capital and Surplus, Shareholders Dividend Restrictions and Quasi-Reorganizations 9. 4 Liabilities, Contingencies and Assessments 9. 5 Leases Information About Financial Instruments With Off-Balance Sheet Risk and Financial Instruments With Concentrations of Credit Risk Sale, Transfer and Servicing of Financial Assets and Extinguishments of Liabilities Gain or Loss to the Reporting Entity from Uninsured Plans and the Uninsured Portion of Partially Insured Plans Direct Premium Written/Produced by Managing General Agents/Third Party Administrators Fair Value Measurements 9.6 Other Items 9.8 Events Subsequent 9.0 Reinsurance Retrospectively Rated Contracts & Contracts Subject to Redetermination 9. 5 Change in Incurred Losses and Loss Adjustment Expenses 9. 6 Intercompany Pooling Arrangements 9. 7 Structured Settlements 9. 8 Health Care Receivables 9. 9 Participating Policies 9. 0 Premium Deficiency Reserves 9. Reserves for Life Contracts and Annuity Contracts 9. Analysis of Annuity Actuarial Reserves and Deposit-Type Liabilities by Withdrawal Characteristics 9. Premium and Annuity Considerations Deferred and Uncollected Separate Accounts Loss/Claim Adjustment Expenses 9.4 9

24 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN A. Accounting Practices The financial statements of Wilco Life Insurance Company (the Company) are presented on the basis of accounting practices prescribed or permitted by the Indiana Commissioner of Insurance (Commissioner). The Commissioner recognizes only statutory accounting practices prescribed or permitted by the State of Indiana for determining and reporting the financial condition and results of operations of an insurance company and for determining its solvency under the Indiana Insurance Law. The National Association of Insurance Commissioners (NAIC) Accounting Practices and Procedures Manual (NAIC SAP), has been adopted as a component of prescribed or permitted practices by the Commissioner. The Company does not have any differences from NAIC SAP. The Company has not requested the Commissioner s approval of any permitted statutory accounting practices. However, the State of Indiana may adopt certain prescribed accounting practices that differ from those found in NAIC SAP. Under NAIC SAP, minimum reserves on universal life policies issued after January, 00 are calculated using a valuation interest rate equal to the maximum valuation rate under the Standard Valuation Law. As required by Indiana, the Company calculates reserves on these policies using the lesser of that rate or the guaranteed accumulation rate specified in the policy. If the Company had established reserves under NAIC SAP, surplus would have been increased by $,9,678 and $,00,64 as of December, 07 or December, 06, respectively. Additionally, net income for the year ended December, 07 and the year ended December, 06 would have decreased by $89,965 and $90,57, respectively. Calculating reserves under NAIC SAP would not have caused the Company s risk-based capital to trigger a regulatory event. A reconciliation of the Company s net income and capital and surplus between NAIC SAP and practices prescribed and permitted by the State of Indiana is shown below: B. Use of Estimates in the Preparation of the Financial Statements The preparation of financial statements in conformity with NAIC SAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. It also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. 9.

25 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS C. Accounting Policy Life premiums are recognized as income over the premium-paying period of the related policies. Annuity considerations with mortality and morbidity risk are recognized as revenue when received. Premiums received from annuity policies with no mortality or morbidity risk are recorded using deposit accounting. Health premiums are earned ratably over the terms of the related insurance and reinsurance contracts or policies. Expenses incurred in connection with acquiring new insurance business, including acquisition costs such as sales commissions, are charged to operations as incurred. In addition, the Company follows these accounting policies: () Short-term investments are stated at amortized cost. () Bonds not backed by other loans are stated at amortized cost in accordance with the valuation prescribed by the Commissioner and the NAIC. For other-than-temporary impairments, the cost basis of the bond is written down to fair market value as a new cost basis and the amount of the write down is accounted for as a realized loss. () Common stocks are valued at fair value except that investments in the common stock of wholly owned subsidiaries and affiliates are carried on the equity basis, adjusted to reflect application of statutory principles. (4) Preferred stocks are stated at cost, in accordance with the valuation prescribed by the Commissioner and the NAIC. (5) Mortgage loans on real estate are stated at the aggregate unpaid balance, excluding accrued interest. (6) Loan-backed securities are stated at either amortized cost or the lower of amortized cost or fair market value. Significant changes in estimated cash flows are accounted for using the retrospective method. (7) The Company did not hold any investments in subsidiary, controlled and affiliated (SCA) entities. (8) The Company has minor ownership investments in joint ventures, partnerships and limited liability companies, which are classified as other invested assets on the balance sheet. The Company values these interests based on its proportionate share of the underlying audited GAAP equity of the investee or, if audited GAAP basis financial statements are not available for the investee, may be recorded based on the underlying audited U.S tax basis equity, in accordance with SSAP No Joint Ventures, Partnerships and Limited Liability Companies. The investment is recorded at cost, plus subsequent capital contributions, and adjusted for the Company's share of the investee's audited GAAP basis earnings or losses and other equity adjustments, less distributions received. Distributions are recognized in net investment income to the extent they are not in excess of the undistributed accumulated earnings attributed to the investee. Distributions in excess of the undistributed accumulated earnings reduce the Company's basis in the investment. (9) All derivatives are stated at fair value. (0) The Company does not utilize anticipated net investment income as a factor in the premium deficiency reserve calculation. () Unpaid losses and loss adjustment expenses include an amount determined from individual case estimates and loss reports and an amount, based on past experience, for the losses incurred but not reported. Such liabilities are necessarily based on assumptions and estimates and while management believes the amount is adequate, the ultimate liability may be in excess of or less than the amount provided. The methods for making such estimates and for establishing the resulting liability are continually reviewed and any adjustments are reflected in the period determined. () The Company has not modified its capitalization policy from the prior period. () The Company has no pharmaceutical rebate receivables. D. Going Concern In accordance with SSAP No., Accounting Policies, Risks & Uncertainties, and Other Disclosures, management has evaluated the Company s ability to continue as a going concern and has identified no issues which would impede the Company s ability to continue as a going concern. 9.

26 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS. ACCOUNTING CHANGES AND CORRECTIONS OF ERRORS The Company did not have any accounting changes or corrections of errors in 07 or 06.. BUSINESS COMBINATIONS AND GOODWILL A. Statutory purchase During 07 or 06, the Company did not participate in a statutory purchase. B. Statutory Merger During 07 or 06, the Company did not participate in a statutory merger. C. Assumption reinsurance agreement During 07 or 06, the Company did not participate in an assumption reinsurance agreement. D. Impairment loss During 07 or 06, the Company did not recognize an impairment loss. 4. DISCONTINUED OPERATIONS The Company does not have any discontinued operations. 9.

27 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS 5. INVESTMENTS A. Mortgage Loans including Mezzanine Real Estate Loans 5.A. Mortgage Loans including Mezzanine Real Estate Loans () No new commercial loans were made in 07. Fire insurance is required on all properties covered by mortgage loans at least equal to the excess of the loan over the maximum loan which would be permitted by law on the land without the buildings. () The maximum percentage of any one loan to the value of security at the time of the loan, exclusive of insured, guaranteed or purchase money mortgages, was: 7.4% () Taxes, assessments and any amounts advanced and not included in the $... 0 $... 0 mortgage loan total: (4) Age Analysis of Mortgage Loans: Commercial Insured All Other Mezzanine Total a. Current Year. Recorded Investment (All) (a) Current $... 0 $...,64,695 $... 0 $...,64,695 (b) 0-59 Days Past Due (c) Days Past Due (d) Days Past Due (e) 80+ Days Past Due Accruing Interest Days Past Due $... 0 $... 0 $... 0 $ Accruing Interest 80+ Days Past Due $... 0 $... 0 $... 0 $ Interest Reduced $... 0 $... 0 $... 0 $... 0 b. Prior Year. Recorded Investment (All) (a) Current $... 0 $... 50,459,890 $... 0 $... 50,459,890 (b) 0-59 Days Past Due (c) Days Past Due (d) Days Past Due (e) 80+ Days Past Due Accruing Interest Days Past Due $... 0 $... 0 $... 0 $ Accruing Interest 80+ Days Past Due $... 0 $... 0 $... 0 $ Interest Reduced $... 0 $... 0 $... 0 $... 0 (5) Investment in Impaired Loans With or Without Allowance for Credit Losses: a. Current Year. With Allowance for Credit Losses $... 0 $... 0 $... 0 $ No Allowance for Credit Losses b. Prior Year. With Allowance for Credit Losses $... 0 $... 0 $... 0 $ No Allowance for Credit Losses (6) Investment in Impaired Loans - Average Recorded Investment, Interest Income Recognized, Recorded Investment on Nonaccrual Status and Amount of Interest Income Recognized Using a Cash-Basis Method of Accounting: a. Current Year. Average Recorded Investment $... 0 $... 0 $... 0 $ Interest Income Recognized Recorded Investments on Nonaccrual Status Amount of Interest Income Recognized Using a Cash-Basis Method of Accounting b. Prior Year. Average Recorded Investment $... 0 $... 0 $... 0 $ Interest Income Recognized Recorded Investments on Nonaccrual Status Amount of Interest Income Recognized Using a Cash-Basis Method of Accounting (7) Allowance for credit losses: $... 0 $... 0 (8) Interest income on impaired loans is reported as collected when cash is received. 9.4

28 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS B. The Company did not have restructured debt in which the Company is a creditor in 07 or 06. C. The Company did not have investments in reverse mortgages in 07 or 06. D. Loan-Backed Securities () For fixed-rate agency mortgage-backed securities, Clearwater Analytics calculates prepayment speeds utilizing Mortgage Industry Advisory Corporation (MIAC) Mortgage Industry Medians (MIMs). MIMs are derived from a semi-monthly dealer-consensus survey of long-term prepayment projections. For other mortgage-backed, loan-backed, and structured securities, Clearwater utilizes prepayment assumptions from Moody s Analytics. Moody s applies a flat economic credit model and utilizes a vector of multiple monthly speeds as opposed to a single speed for more robust projections. In instances where Moody s projections are not available, Clearwater uses data from Reuters, which utilizes the median prepayment speed from contributors models. () The Company has no securities with a recognized other-than-temporary impairment as a result of the Company s intent to sell the security or due to the inability or intent to retain the security for a sufficient period of time to recover the amortized cost basis. () The Company has no securities with an other-than-temporary impairment, recognized in the current reporting period, on the basis that the present value of future cash flows expected to be collected is less than the amortized cost basis. (4) All impaired securities (fair value is less than cost or amortized cost) for which an other-than temporary impairment has not been recognized in earnings as a realized loss are summarized below by the length of time that individual securities have been in a continuous loss position: a. The aggregate amount of unrealized losses:. Less than Months $ ,76. Months or Longer...,90,46 b. The aggregate related fair value of securities with unrealized losses:. Less than Months $... 74,9,7. Months or Longer... 50,46,7 (5) All securities are reviewed, at least quarterly, to determine if an other-than-temporary impairment should be recognized and, if so, the reason for the impairment. The Company closely monitors all assets that are trading at an unrealized loss of at least 0% or $00,000, as well as all assets that have been in an unrealized loss position for six months or more. For loan-backed securities, the categories of information considered when reaching conclusions as to whether impairments are not other-than-temporary may include the following: projected cash flows; pre-payment speeds; delinquency, default and severity rates; average borrower credit ratings; loan to value ratios; debt service coverage ratios; quality of the underlying collateral; cumulative losses in the underlying collateral pool; credit enhancement for the tranche owned and contractual allocation of losses to the tranche under varying circumstances; geographical distribution of collateral and expectations regarding general economic conditions, including home price appreciation and the effect of government programs on future cash flows. E. The Company did not have any open repurchase agreements or securities lending transactions in 07 or 06. F. The Company did not have any repurchase agreements transactions accounted for as secured borrowings in 07 or 06. G. The Company did not have any reverse repurchase agreements transactions accounted for as secured borrowings in 07 or 06. H. The Company did not have any repurchase agreements transactions accounted for as a sale in 07 or 06. I. The Company did not have any reverse repurchase agreements transactions accounted for as a sale in 07 or 06. J. The Company did not have investments in real estate in 07 or 06. K. The Company did not have any investments in low-income housing tax credits (LIHTC) in 07 or

29 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS L. Restricted Assets () Restricted Assets (a) Column 5 divided by Asset Page, Column, Line 8 (b) Column 9 divided by Asset Page, Column, Line 8 () The Company did not have any assets pledged as collateral not captured in other categories in 07 or 06. () Details of Other Restricted Assets (a) Column 5 divided by Asset Page, Column, Line 8 (b) Column 9 divided by Asset Page, Column, Line 8 (4) The Company does not have any collateral received and reflected as assets in 07 or 06. M. The Company did not have Working Capital Finance Investments in 07 or 06. N. The Company had no offsetting assets and liabilities reported net with a valid right to offset in accordance with SSAP No. 64, Offsetting and Netting of Assets and Liabilities in 07 or 06. O. The Company did not have any Structured Notes in 07 or

30 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS P. 5* securities Investment Number of 5* Securities Aggregate BACV Aggregate Fair Value Current Year Prior Year Current Year Prior Year Current Year Prior Year () Bonds - AC $... 4,499,748 $... 4,49,59 $... 4,55,00 $... 4,500,000 () LB&SS - AC () Preferred Stock - AC (4) Preferred Stock - FV (5) Total (+++4) $... 4,499,748 $... 4,49,59 $... 4,55,00 $... 4,500,000 Q. The Company did not have any short sales of securities in 07 or 06. R. Prepayments and Acceleration General Account Separate Account. Number of CUSIPs Aggregate Amount of Investment Income , JOINT VENTURES, PARTNERSHIPS AND LIMITED LIABILITY COMPANIES A. The Company had no investments in Joint Ventures, Partnerships or Limited Liability Companies that exceed 0% of its admitted assets. B. The Company did not recognize any impairment write downs for its investments in Joint Ventures, Partnerships or Limited Liability Companies during the statement periods. 7. INVESTMENT INCOME A. All amounts of due and accrued investment income is included in Unassigned Surplus except for amounts that are over 90 days past due, which is nonadmitted. All due and accrued investment income deemed uncollectible is written off in the period it is determined to be uncollectible. B. The Company had no investment income due and accrued that was non-admitted as of December, 07 and DERIVATIVE INSTRUMENTS Standard & Poor s (S&P) 500 Index Call Options A. The credit risk of call options is the risk that the seller of the option will not pay the in-the-money value of the option, if any, when exercised. The Company limits this risk by monitoring its counterparty exposure, utilizing multiple counterparties and purchasing options from dealers we believe to be creditworthy. The Company includes option exposures with its securities holdings in determining compliance with the single issuer limitations in its investment guidelines. Since the option holder is not required to exercise a call option, the market risk is limited to the market value of the option. No funds or collateral are required of the purchaser of a call option other than the initial cost of the option. B. The Company has in force equity-indexed universal life products that provide a flexible guaranteed minimum rate of return and a higher potential return linked to the performance of the S&P 500 Index. One-year call options are purchased in order to hedge potential increases to policyholder benefits resulting from increases in the S&P 500 Index to which the policy s return is linked. The Company s hedges are categorized as fair value hedges. C. The S&P 500 Index call options have met the criteria of a highly effective hedge and are therefore valued and reported using hedge accounting. Under hedge accounting, the options are recorded at cost and marked to market, with the change in market value reported as a component of net investment income. At the time the option expires or is exercised, any difference between the cash received and the cost is recognized as investment income. The Company monitors the hedge effectiveness of the S&P 500 index call options on a daily basis. 9.7

31 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS 9. INCOME TAXES A. The components of the net deferred tax asset/(liability) at the end of current period are as follows: As of End of Current Period //06 Change () () () (4) (5) (6) (7) (8) Ordinary Capital (Col. + ) Total Ordinary Capital (Col ) Total (Col. - 4) Ordinary (Col. - 5) Capital (9) (Col ) Total (a) Gross Deferred Tax Assets ,95,86...,08, ,07,86.. 8,9,5... 9,9,4.. 9,68,754.. (65,84,6)...(8,6,667)..(7,60,89) (b) Statutory Valuation Allowance Adjustment , , , , (c) Adjusted Gross Deferred Tax Assets (a - b) ,86,90...,08, ,69, ,67,9... 9,9,4.. 90,990,7.. (65,84,6)...(8,6,667)..(7,60,89) (d) Deferred Tax Assets Nonadmitted ,66, ,66,89.. 5,79, ,9,4.. 6,598,97.. (55,66,406)...(9,9,4)..(64,98,648) (e) Subtotal Net Admitted Deferred Tax Asset (c - d) ,670,64...,08, ,75, ,9, ,9,44...(9,70,80)...,08,575...(8,68,45) (f) Deferred Tax Liabilities......,906, ,906, ,8, ,8,065...(,94,685) (,94,685) (g) Net Admitted Deferred Tax Asset/(Net Deferred Tax Liability) (e - f) ,764,4...,08, ,846,809...,560, ,560,69...(6,796,5)...,08,575...(5,7,560) The amount by tax character, and the change in such, of admitting adjusted gross DTAs as the result of the application of SSAP 0, Income Taxes A Replacement of SSAP 0R and SSAP0 is as follows: As of End of Current Period //06 Change () Ordinary () Capital () (Col. + ) Total (4) Ordinary (5) Capital (6) (Col ) Total (7) (Col. - 4) Ordinary (8) (Col. - 5) Capital (9) (Col ) Total Admission Calculation Components SSAP No. 0 (a) Federal Income Taxes Paid In Prior Years Recoverable Through Loss Carrybacks ,606,564...,606, (,606,564)... (,606,564) (b) Adjusted Gross Deferred Tax Assets Expected To Be Realized (Excluding The Amount Of Deferred Tax Assets From (a) above) After Application of the Threshold Limitation. (The Lesser of (b) and (b) Below) ,846, ,846, ,49, ,49,94... (,0,485) (,0,485). Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date ,748, ,748, ,4, ,4,947.. (7,674,0) (7,674,0). Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold XXX XXX ,846, XXX......XXX ,49,94... XXX XXX (,0,485) (c) Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From (a) and (b) above) Offset by Gross Deferred Tax Liabilities ,906, ,906, ,8, ,8, (,94,685) (,94,685) (d) Deferred Tax Assets Admitted as the result of application of SSAP No. 0. Total ((a) + (b) + (c)) ,75, ,75, ,980,59...,606, ,586,9... (6,7,70)... (,606,564)... (8,8,74) The ratio used to determine the amount of adjusted gross DTAs, expected to be realized and the amount of adjusted capital and surplus used to determine the percentage threshold limitation under SSAP 0 are as follows: A. Ratio Percentage Used To Determine Recovery Period And Threshold Limitation Amount B. Amount Of Adjusted Capital And Surplus Used To Determine Recovery Period And Threshold Limitation In (b) Above.... $...,,059 $...4,8,66 Impact of Tax Planning Strategies: As of End of Current Period //06 Change () Ordinary () Capital () Ordinary (4) Capital (5) (Col. - ) Ordinary (6) (Col. - 4) Capital (a) Determination of adjusted gross deferred tax assets and net admitted deferred tax assets, by tax character as a percentage.. Adjusted Gross DTAs amount from Note 9A(c) ,86,90...,08, ,67,9... 9,9,4... (65,84,6)... (8,6,667). Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies Net Admitted Adjusted Gross DTAs amount from Note 9A(e) ,670,64...,08, ,9, (9,70,80)...,08, Percentage of net admitted adjusted gross DTAs by tax character admitted because of the impact of tax planning strategies b. Do the Company s tax-planning strategies include the use of reinsurance?... Yes [ ] No [ X ] 9.8

32 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS B. The Company had no deferred tax liabilities that were not recognized. C. Current income taxes incurred consist of the following major components: () As of End of Current Period () () (Col. - ) Change. Current Income Tax //06 (a) Federal ,65, (7,47,5)... 5,0,75 (b) Foreign (c) Subtotal ,65, (7,47,5)... 5,0,75 (d) Federal income tax on net capital gains......,550,0... 8,666,049...,884,5 (e) Utilization of capital loss carry-forwards (f) Other (g) Federal and foreign income taxes incurred ,65,80... (8,75,86)... 7,96,988. Deferred Tax Assets: (a) Ordinary: () Discounting of unpaid losses () Unearned premium reserve () Policyholder reserves ,66,7... 5,77,74...(46,56,47) (4) Investments (5) Deferred acquisition costs ,695,4...,7,75...(4,4,94) (6) Policyholder dividends accrual , ,... (9,4) (7) Fixed Assets (8) Compensation and benefits accrual......,84,94...,5,599...,695 (9) Pension accrual (0) Receivables - nonadmitted () Net operating loss carry-forward ,04,08...,7,6... (7,076,) () Tax credit carry-forward ,75,6... 7,75, () Other (including items <5% of total ordinary tax assets) ,8,86...,95,0...,7,795 (99) Subtotal ,95, ,9,5...(65,84,6) (b) Statutory valuation allowance adjustment , , (c) Nonadmitted ,66, ,79,695...(55,66,406) (d) Admitted ordinary deferred tax assets (a99 - b - c) ,670, ,9,44... (9,70,80) (e) Capital: () Investments......,08, ,9,4... (8,6,667) () Net capital loss carry-forward () Real estate (4) Other (including items <5% of total ordinary tax assets) (99) Subtotal......,08, ,9,4... (8,6,667) (f) Statutory valuation allowance adjustment (g) Nonadmitted ,9,4... (9,9,4) (h) Admitted capital deferred tax assets (e99 - f - g)......,08, ,08,575 (i) Admitted deferred tax assets (d + h) ,75, ,9,44... (8,68,45). Deferred Tax Liabilities: (a) Ordinary: () Investments ,45...,647, (,5,40) () Fixed assets () Deferred and uncollected premium......,509, ,8,... (,67,84) (4) Policyholder reserves (5) Other (including items <5% of total ordinary tax liabilities) (99) Subtotal......,906, ,8, (,94,686) (b) Capital: () Investments () Real estate () Other (including items <5% of total capital tax liabilities) (99) Subtotal (c) Deferred tax liabilities (a99 + b99)......,906, ,8, (,94,686) 4. Net deferred tax assets/liabilities (i - c) ,846,809...,560,68... (5,7,559) D. The provision for federal income taxes incurred is different than that which would be obtained by applying the statutory federal income tax rate to income before taxes. On December, 07, the Tax Cuts and Jobs Act was signed into legislation which establishes new laws that will affect 08, including, but not limited to reduction in the federal income tax rate for corporations from 5% to %. We are required to recognize the effect on deferred tax assets and liabilities of a change in tax rates in the period the tax rate change was enacted. Accordingly, the enacted reduction in the U.S. Federal corporate income tax rate, resulted in a one-time charge of $7,99,068 for the year ended December, 07. This, and other significant items causing these differences are as follows: 9.9

33 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS //07 Effective Tax Rate Provision computed at statutory rate $ 4,9, % Permanent differences (6,8,97) -4.6% PY true-up,680,965.94% 07 TAX Reform change in DTA 7,99, % Total federal income tax expense $ 8,68, % Federal income taxes incurred $ 9,65, % Change in net deferred income tax 6,0,88 48.% Total federal income tax expense $ 8,68, % E. Operating loss and tax credit carryforward () At December, 07, the Company had no capital loss carryforwards to offset future capital gains subject to tax. At December, 07, the Company had $8,767,060 of net operating loss carryforwards which begin to expire in 08, all of which are subject to Internal Revenue Service (IRS) Section 8 limitations. At December, 07, the Company had $7,8, of federal LIHTC which begin to expire in 0, all of which are subject to IRS Section 8 limitations. A partial valuation allowance is in place against a portion of these credits as they are expected to expire unused. At December, 07, the Company had $57,004 of foreign tax credits which will begin to expire in 08. A valuation allowance is in place against these credits as they are expected to expire unused. () The Tax Cuts & Jobs Act of 07 eliminated the operating loss carryback for Life Insurance companies for losses realized after 07. Prior year taxes are not available for recoupment in the event of future net losses. () The aggregate amount of deposits reported as admitted assets under Section 660 of the IRS Code were $0 as of December, 07. F. The Company, along with its life insurance affiliates, files a consolidated Federal income tax return with its parent, Wilton Reassurance Company. Companies included in the consolidated return are as follows: Wilton Reassurance Company Wilton Reassurance Life Company of New York Texas Life Insurance Company Wilcac Life Insurance Company Wilco Life Insurance Company Redding Reassurance Company The method of allocation among the companies is subject to written agreements approved by each company s Board of Directors. Allocation is based upon the separate return calculations with the credit for net losses granted when utilized on a separate company basis or in consolidation. Intercompany tax balances are settled quarterly. 0. INFORMATION CONCERNING PARENT, SUBSIDIARIES AND AFFILIATES A. The Company is a wholly-owned subsidiary of Wilton Reassurance Company (parent) which, in turn, is a whollyowned subsidiary of Wilton Re U.S. Holdings, Inc., a Delaware corporation (Wilton Re U.S.). All but a de minimis portion of the economic interests and 00% of the voting interests of Wilton Re U.S. are held or controlled by Wilton Re U.S. Holdings Trust, an Ontario trust (the Wilton Re Trust). In turn, all economic interests associated with the Wilton Re Trust accrue to Wilton Re Ltd., a non-insurance holding company registered in Nova Scotia, Canada. Wilton Re Ltd. is deemed the ultimate parent corporation in the Company s holding company system. B-C. On June 5, 07, the Company declared an extraordinary dividend of $50,000,000 payable to its parent. The Commissioner approved the extraordinary dividend on July, 07. The dividend was paid in cash on July 5,

34 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS On June 5, 06, the Company declared an extraordinary dividend of $50,000,000 payable to its parent. The Commissioner approved the extraordinary dividend on July, 06. The dividend was paid in cash on July 9, 06. D. At December, 07 and 06, the Company reported $,7,48 and $,8, respectively, due to parents, subsidiaries and affiliates related to administrative services performed by its affiliates on behalf of the Company. The Company expects to generally settle these costs within ninety days of year end. E. The Company did not have any guarantees or undertakings for the benefit of an affiliate or related party that would result in a material contingent exposure of the reporting entity's or any related party's assets or liabilities. F. The Company is party to a Services Agreement with its affiliate, Wilton Re Services, Inc. (WRSI), pursuant to which WRSI provides certain accounting, actuarial and administrative services. Under the services agreement with WRSI, the Company incurs charges related to employee compensation which includes a Long-Term Incentive Program (LTIP). A vesting period of three to five years applies after which final unit values are determined based on actual performance. The Company has been allocated a share of the expense with the LTIP payable carried as a component of general expense due or accrued. Once the vesting period is complete and the LTIP awards are paid, the Company s LTIP payable will be settled with WRSI At December, 07 and 06, the portion of the Company s General Expenses Due or Accrued attributable to the LTIP payable was $5,9,086 and $,40,90 respectively. G. All outstanding shares of the Company are owned by Wilton Reassurance Company. H. The Company does not own shares of any upstream intermediate or ultimate parent, either directly or indirectly via a downstream subsidiary, controlled or affiliated company. I. The Company does not own an investment in any affiliated entity that exceeded 0% of admitted assets. J. The Company did not recognize any impairment write-down for any investment in subsidiary, controlled, or affiliated companies during the statement period. K. The Company has no foreign insurance subsidiaries. L. The Company has no investment in a downstream noninsurance holding company. M. The Company does has any SCA investments. N. The Company has no investment in insurance SCAs.. DEBT A. The Company did not have any capital notes as of December, 07 or December, 06. B. Federal Home Loan Bank (FHLB) Agreements () Federal Home Loan Bank of Indianapolis (FHLBI) In the first quarter of 007, the Company became a member of the FHLBI. As a member of the FHLBI, the Company has the ability to borrow on a collateralized basis from the FHLBI. The Company may use these advances, which take the form of insurance contracts structured as funding agreements, to earn incremental income and as an additional source of liquidity for its operations. The maximum borrowing capacity under this agreement is subject to several limitations including board approval, total company assets less all borrowings, qualifying residential housing finance assets held by the Company and the ability to post eligible collateral. In addition, the Company must hold a specified amount of capital stock as a requirement of membership in the FHLBI and additional activity-based capital stock must be purchased based on a specified percentage of outstanding borrowings. The Company has no outstanding advances as of December, 07. At December, 07 the FHLBI reported the Company s maximum borrowing capacity as $500,000,000 based on the Company s board resolution, but limited to $4,07, based on the capital stock currently held and $5,678,06 based on qualifying residential housing finance assets. The amount of eligible collateral owned by the Company varies and the Company has the ability to purchase additional collateral if required. Federal Home Loan Bank of Dallas (FHLBD) The Company is no longer a member of the FHLBD. The Company has no outstanding advances as of December,

35 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS () FHLB Capital Stock The Aggregate totals of the FHLBI capital stock as of December, 07 or December, 06 are as follows: Membership Stock eligibility for redemption as of December, 07 is as follows: Current Year Total Not Eligible for Redemption Less Than 6 Months 6 Months to Less Than Year to Less Than Years to 5 Years Membership Stock Class B $... 8,948,00 $... 8,948,00 $... - $... - $... - $... - () Collateral Pledged to FHLB Aggregate Fair Carrying Total Value Value Borrowings Collateral Pledged - General Account - December, 07 $... - $... - $... - Collateral Pledged - General Account - December, ,55, ,94, ,4,00 Amount of Borrowed at Fair Carrying Time of Maximum Value Value Collateral Maximum Collateral Pledged - General Account - Current Year $... 68,640,055 $... 58,945,4 $... 7,4,00 Maximum Collateral Pledged - General Account - Prior Year... 0,97, ,400, ,447,0 (4) Borrowing from FHLB The amounts borrowed as of December, 07 or December, 06 are as follows: The maximum amounts borrowed in 07 are as follows: 9.

36 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS The FHLB prepayment obligations as of December, 07 are as follows: Does the Company have prepayment obligations under the following arrangements (YES/NO)? () Debt NO () Funding Agreements YES () Other N/A. RETIREMENT PLANS, DEFERRED COMPENSATION, POSTEMPLOYMENT BENEFITS AND COMPENSATED ABSENCES AND OTHER POSTRETIREMENT BENEFIT PLANS A-D. Defined Benefit Plan The Company provides certain health care and life insurance benefits under a postretirement plan for certain former employees. The unfunded plan is closed to new participants. The liability was $4,650 and $4,7 at December, 07 and 06, respectively, and was included in general expenses due and accrued. The Company recorded expenses of $5,06 and $4,855 on the plan in 07 and 06, respectively. E. Defined Contribution Plans The Company provides payments under a deferred compensation plan to two former employees. The plan is closed and is in payout status. The liability was $9,80 and $09,479 at December, 07 and 06, respectively, and was included in general expenses due and accrued. The Company recorded expenses of $0,69 and $,09 on the plan in 07 and 06, respectively. F-I. The Company had no employees at December, 07 or December, 06.. CAPITAL AND SURPLUS, SHAREHOLDERS' DIVIDEND RESTRICTIONS AND QUASI-REORGANIZATIONS () The Company has 5,50,000 shares authorized with 4,78, shares issued and outstanding and a par value of $.00 per share. () The Company has no preferred stock outstanding. () The maximum amount of dividends which can be paid by State of Indiana life insurance companies to shareholders without 0-day prior notice to the Commissioner is the greater of statutory net gain from operations before realized capital gains or losses for the preceding year or 0% of statutory surplus as regards policyholders at the end of the preceding year. The Company s statutory surplus as regards policyholders as of December, 07 was $09,649,84. The Company s statutory net gain from operations before realized capital gains or losses for 07 was $,55,49. Absent prior regulatory notice and approval, dividends may be paid by the Company only from earned surplus. The Company had an unassigned funds (surplus) as of December, 07 of ($0,4,09). (4) On June 5, 07, the Company declared an extraordinary dividend of $50,000,000 payable to its parent. The Commissioner approved the extraordinary dividend on July, 07. As directed by the Department, the Company recorded $0,8,84 as dividends to shareholders, with the remaining $9,76,59 as return of capital and it was paid in cash on July 5, 07. On June 5, 06, the Company declared an extraordinary dividend of $50,000,000 payable to its parent. The Commissioner approved the extraordinary dividend on July, 06. The Company recorded the entire extraordinary dividends as return of capital. The dividend was paid in cash on July 9, 06 (5) Within the limitations of () above, there are no restrictions placed on the portion of Company profits that may be paid as ordinary dividends to shareholders. (6) There were no restrictions placed on the Company s unassigned funds (surplus), including for whom the surplus is being held. (7) During 07 or 06, the Company had no advances to surplus. (8) During 07 or 06, the Company held no stock for special purposes. (9) The Company had no special surplus funds at or December, 07 or December, 06. (0) The portion of unassigned funds (surplus) represented or reduced by cumulative unrealized gains and (losses) at December, 07 and 06, respectively, was $05,507 and $(,950,77), respectively. 9.

37 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS () The Company does not have any surplus debentures outstanding. () The Company did not have restatements due to quasi-reorganizations in 07 or 06. () The effective date(s) of all quasi-reorganizations in the prior 0 years is/are July, CONTINGENCIES A. Contingent Commitments () The Company has given Black Diamond Capital Partners I, L.P., a limited partnership organized to make equity investments, a standby equity commitment of $750,000. The Company had funded $78,97 of the commitment as of December, 07. The Company has given Centerfield Capital Partners II, L.P., a limited partnership organized to make equity investments, a standby equity commitment of $,000,000. The Company had funded $98,854 of the commitment as of December, 07. The Company has given Cyprium Investors III, L.P., a limited partnership organized to make equity investments, a standby equity commitment of $,000,000. The Company had funded $,80,844 of the commitment as of December, 07. The Company has given New York Life Investment Management Mezzanine Partners II, L.P., a limited partnership organized to make equity investments, a standby equity commitment of $,000,000. The Company had funded $,709,986 of the commitment as of December, 07. Total SSAP 97 outstanding unfunded commitments as of December, 07 were $56,054. The Company is not aware of any material contingent commitments as of December, 07. (-) The Company has no contingent guarantees as of December, 07. B. Assessments () The Company has established a liability for guaranty fund assessments on several insolvencies in the amount of $667,965. This amount represents estimated obligations to state guaranty funds to provide for covered claims and other insurance obligations of insolvent insurers, net of the estimated offset to future premium taxes. The period over which the assessments are anticipated to be funded varies by insolvency and is difficult to predict. () The Company s estimated probable recoveries of prior payments through premium tax credits totals $48,96 and is recorded as an asset. The period over which the credits are realized varies by state but typically ranges from five to ten years. C. Gain Contingencies There were no material gain contingencies recognized by the Company during 07 or 06. D. Claims Related Extra Contractual Obligation (ECO) and Bad Faith Losses Stemming From Lawsuits The Company did not incur material losses related to extra contractual obligation lawsuits in 07. E. Joint and Several Liabilities The Company had no joint and several liabilities at December, 07 or December,

38 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS F. All Other Contingencies () In October, 0, a purported nationwide class action was filed in the United States District Court for the Central District of California, William Jeffrey Burnett and Joe H. Camp v. Conseco Life Insurance Company, CNO Financial Group, Inc., CDOC, Inc. and CNO Services, LLC, Case No. EDCV-075VAPSPX. The plaintiffs commenced this action on behalf of various Lifetrend life insurance policyholders who, since October 008, have surrendered or lapsed their policies. Shortly after filing, the case was consolidated into a multidistrict litigation proceeding already pending in the Northern District of California. On November 0, 0, the Company and the other defendants filed a motion to dismiss the complaint. On November 8, 0, the court granted the dismissal, with leave to amend, of CNO Financial Group, Inc., CDOC, Inc. and CNO Services, LLC, and denied the motion to dismiss of the Company. The plaintiffs filed an amended complaint in October 04 and the Company filed a renewed motion to dismiss the amended pleading. On April 9, 05, the district court granted the Company s revised motion to dismiss and issued a judgment dismissing the plaintiffs case in full without leave to amend. On April 7, 05, the plaintiffs filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit from the district court s order and judgment dismissing plaintiffs case. The Ninth Circuit heard oral argument on the appeal on April 7, 07. In May 07, the Ninth Circuit issued an opinion reversing the district court s prior dismissal of plaintiffs complaint. Thereafter, the Company filed successful motions for suggestion of remand and to transfer venue from the 9th Circuit to the 7th Circuit. The proceeding was remanded from the Northern District of California to the Central District of California by the Judicial Panel on Multidistrict Litigation in September 07, and the case was then transferred from the Central District of California to the Southern District of Indiana in January 08. The Company believes it has meritorious defenses to plaintiffs claims and will pursue those defenses vigorously. () At December, 07 and 06, the Company had no admitted amounts for assets covered by SSAP No. 6, Uncollected Premium Balances, Bills Receivable for Premiums, and Amounts Due from Agents and Brokers, No. 47, Uninsured Plans and No. 66, Retrospectively Rated Contracts. () Various lawsuits against the Company have arisen in the course of the Company s business. Contingent liabilities arising from litigation, income taxes and other matters not mentioned above are not considered material in relation to the financial position of the Company. The Company has no assets that it considers to be impaired. 5. LEASES () Lessee Operating Leases The Company was not involved in material operating lease obligations as of December, 07 or December, 06. () Lessor Leasing Arrangements Leasing activities were not part of the Company s business activities in 07 or INFORMATION ABOUT FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND FINANCIAL INSTRUMENTS WITH CONCENTRATION OF CREDIT RISK () The table below summarizes the face amount (notional amount for swaps and futures and option premium for options) of the Company s financial instruments with off-balance sheet risk as of December, 07 and 06. See Schedule DB of this financial statement for additional detail. () The Company has in force equity-indexed universal life products that provide a guaranteed base rate of return and a higher potential return linked to the performance of the S&P 500 index. One-year call options are purchased in an effort to hedge potential increases to policyholder benefits resulting from increases in the S&P 500 Index to which the policy s return is linked. The Company s hedges are categorized as fair value hedges. During 07, the S&P 500 index call options have met the criteria of a highly effective hedge and are therefore valued and reported using hedge accounting. () The Company is exposed to credit-related losses in the event of nonperformance by counterparties to financial instruments, but it does not expect any counterparties to fail to meet their obligations given their high credit ratings. If the counterparties for the derivatives that the Company holds fail to meet their obligations, the Company may have to recognize a loss. The Company limits its exposure to such a loss by diversifying 9.5

39 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS among several counterparties generally believed to be strong and creditworthy. The credit exposure of derivatives is represented by the fair value of contracts with a positive fair value at the reporting date. 7. SALE, TRANSFER AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENT OF LIABILITIES A. Transfers of Receivables Reported as Sales The Company did not report transfers of premium receivables as sales in 07 or 06. B. Transfer and Servicing of Financial Assets The Company did not undertake any transfer and servicing of financial assets in accordance with SSAP No. 0, Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, in 07 or 06. C. Wash Sales In the course of managing the Company s investment portfolio, securities may be sold and reacquired within 0 days of the sale date in order to enhance the Company s yield on its investment portfolio. Such transactions involving securities with an NAIC designation of or below or unrated securities are referred to are referred to as wash sales. The Company had no wash sales involving unrated securities or securities with an NAIC designation of or below during 07 or GAIN OR LOSS TO THE REPORTING ENTITY FROM UNINSURED A&H PLANS AND THE UNINSURED PORTION OF PARTIALLY INSURED PLANS The Company did not act as an administrator of any uninsured or partially insured accident and health insurance plans. 9. DIRECT PREMIUM WRITTEN/PRODUCED BY MANAGING GENERAL AGENTS/THIRD PARTY ADMINISTRATORS The Company had no direct written premium written through a managing general agent or third party administrator. 0. FAIR VALUE MEASUREMENTS A. Assets and Liabilities measured and reported at Fair Value The Company s financial assets measured and reported at fair value have been classified, for disclosure purposes, based on a hierarchy defined by authoritative guidance. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets (Level ) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level ). An asset s classification is based on the lowest level input that is significant to its measurement. For example, a Level fair value measurement may include inputs that are both observable (Levels and ) and unobservable (Level ). The levels of the fair value hierarchy are as follows: Level includes assets valued using inputs that are quoted prices in active markets for identical assets. Level includes assets valued using inputs that are quoted prices for similar assets in an active market, quoted prices for identical or similar assets in a market that is not active, observable inputs, or observable inputs that can be corroborated by market data. Level assets include those financial instruments that are valued by independent pricing services using models or other valuation methodologies. These models are primarily industry-standard models that consider various inputs such as interest rate, credit spread, reported trades, broker/dealer quotes, issuer spreads and other inputs that are observable or derived from observable information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace. Level includes assets valued using unobservable inputs that are used in model-based valuations that contain management assumptions. Level assets include those financial instruments whose fair value is estimated based on non-binding broker prices or internally developed models or methodologies utilizing significant inputs not based on, or corroborated by, readily available market information. At each reporting date, the Company classifies assets into the three input levels based on the lowest level of input that is significant to the measurement of fair value for each asset reported at fair value. This classification is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction and overall market conditions. The Company s assessment of the significance of a particular input to the fair value measurement and the ultimate classification of each asset requires judgement. 9.6

40 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS The following tables provide detail on the Company s assets and liabilities measured and reported at fair value: () Fair Value Measurements at December, 07 Description Level Level Level Total Assets at fair value: Common stock Industrial and miscellaneous $... - $... 8,948,00 $... - $... 8,948,00 Derivative assets Options ,707, ,707,454 Other Invested Assets ,48,87...,48,87 Total Assets at fair value $... - $...,655,754 $...,48,87 $...,9,67 Total Liabilities at fair value $... - $... - $... - $... - () The table below presents reconciliation for all assets measured at fair value using significant unobservable inputs (Level ) for the year ended December, 07. Total gains Total gains Transfers Transfers and (losses) and (losses) Balance at into out of included in included in Balance at //07 Level Level Net Income Surplus Purchases Issuances Sales //07 a. Assets Other Invested Assets $...,6,840 $ ,085 $... (,600,4) $... 0 $... (6,4) $...,400,6 $... 0 $... (65,00) $...,48,87 Total $...,6,840 $ ,085 $... (,600,4) $... 0 $... (6,4) $...,400,6 $... 0 $... (65,00) $...,48,87 () As of December, 07, the reported fair value of the Company s investment in Level common stock consisted of: $8,948,00 of FHLBI common stock - the stock may only be issued, redeemed and repurchased by the FHLBI at a price equal to its par value. As of December, 07, the reported fair value of the Company s investment in Level options was $,707,454. The Company measured the fair value of options based on the consideration of several inputs including closing exchange or over-the-counter market price quotations; time value and volatility factors underlying options; market interest rates; and non-performance risk. As of December, 07, the reported fair value of the Company s investment in Level other invested assets was $,48,87. Other invested assets consists of several private investment funds organized as partnerships and L.L.C. interests. Private investment funds are carried based on the Company s ownership percentage in the underlying investments Net Asset Value. The Net Asset Value is determined based on the market value of the assets. Net Asset Value falls within Level of the fair value hierarchy. The Company owns a limited number of corporate bonds, preferred stocks and hybrid securities that are in or near default and as such are rated 6 by the NAIC. These securities are required to be reported at the lower of fair value or amortized cost. The fair values of these publicly-traded securities are based on quoted market prices from widely used pricing sources such as Interactive Data Corp (IDC) or Reuters/EJV, and also may be obtained from independent third party dealers. These securities would fall within Level of the fair value hierarchy. (4) Fair value information on derivative assets is disclosed in items -4 above. B. Fair Value of Financial Instruments The Company determines fair value for its investments using various valuation methodologies in accordance with those permitted by the Purposes and Procedures Manual of the NAIC Securities Valuation Office. Fair values are based on quoted market prices when available. When market prices are not available, fair value is generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality (matrix pricing). In instances where there is little or no market activity for the same or similar instruments, the Company estimates fair value using methods, models and assumptions that management believes market participants would use to determine a current transaction price. These valuation techniques involve some level of management estimation and judgment, which becomes significant with 9.7

41 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS increasingly complex instruments or pricing models. Where appropriate, adjustments are included to reflect the risk inherent in a particular methodology, model or input used. As the Company is responsible for the determination of fair value, monthly quantitative and qualitative analysis on the prices received from third parties are performed to determine whether the prices are reasonable estimates of fair value. The Company s analysis includes: (i) a review of the methodology used by third party pricing services; (ii) a comparison of pricing services valuation to other pricing services valuations for the same security; (iii) a review of month to month price fluctuations; (iv) a review to ensure valuations are not unreasonably stale; and (v) back testing to compare actual purchase and sale transactions with valuations received from third parties. As a result of such procedures, the Company may conclude the prices received from third parties are not reflective of current market conditions. In those instances, the Company may request additional pricing quotes or apply internally developed valuations. However, the number of instances is insignificant and the aggregate change in value of such investments is not materially different from the original prices received. C. As of December, 07, the aggregate fair value of all financial instruments and the level within the fair value hierarchy in which the fair value measurements in their entirety fall were as follows: Type of Financial Aggregate Admitted Instrument Fair Value Assets Level Level Level Assets: Bonds $...,68,508,96 $.,49,70,08 $,856,0 $.,5,78,8 $. 6,47,98 Preferred Stocks... 66,577, ,60, ,577, Common Stocks... 8,948, ,948, ,948, Commercial Mortgage Loans... 4,9,5...,64, ,9,5 Cash & Short-term Investments... 85,808, ,807, ,808, Other Invested Assets... 50,05, ,4, ,05,604 Derivatives...,707,454...,707, ,707, Liabilities: Deposit Type Contracts $... 89,878,59 $... 89,878,59 $... 0 $... 0 $... 89,878,59 D. Not applicable.. OTHER ITEMS A. Unusual or Infrequent Items The Company had no unusual or infrequent items for the year ended December, 07 or December, 06. B. Troubled Debt Restructuring: Debtors The Company had no troubled debt restructuring during 07 or 06. C. Other Disclosures In August 0, the Company was notified of an examination to be done on behalf of a number of states for the purpose of determining compliance with unclaimed property laws by the Company. Such examination has included inquiries related to the use of data available on the U.S. Social Security Administration's Death Master File to identify instances where benefits under life insurance policies, annuities and retained asset accounts are payable. The Company is continuing to provide information to the examiners in response to their requests. A total of 8 states and the District of Columbia are currently participating in this examination. D. Business Interruption Insurance Recoveries The Company did not have any business interruption insurance recoveries in 07 or 06. E. State Transferable Tax Credits The Company did not have state transferable tax credits at December, 07 or December, 06. F. Subprime Mortgage Related Risk Exposure () Classification of mortgage related securities is primarily based on information from outside data services. Certain characteristics are utilized to determine if a mortgage-backed security has sub-prime exposure. Typical characteristics of mortgage-backed securities with sub-prime exposure are: Low average FICO score (< 650). High weighted average coupon relative to other mortgage-backed securities of similar average loan age and issue date. High percentage of loans with prepayment penalties (> 50%). 9.8

42 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS Prospectus supplement indicates that underwriting standards are not traditional, particularly with respect to credit and risk. Specific items discussed may include loan-to-value ratios, bankruptcy and foreclosure histories, and debt-to-income ratios. Issuer is one of several established sub-prime lenders. High percentage of ARM loans are /8 or /7 hybrid loans. High weighted average margin for ARM loans (typically > 5%). Very high percentage of full documentation loans (> 75%). Very low percentage of non-owner occupied properties (<6%). Typical characteristics of mortgage-backed securities with Alt-A exposure are: Average to very good FICO (> 60). Weighted average coupon that is higher than Jumbo/MBS and lower than sub-prime (depends upon loan age and when issued). Loans with prepayment penalties are somewhat common (often > 5%, usually <50% of loans). Prospectus supplement for the related deal indicates that underwriting standards are not traditional but also does not indicate that the loans have high credit risk as described above for sub-prime loans. Many Alt-A deals have the language Alternative loan trust mentioned somewhere in either the title/name of the deal or in the summary section or are done on a special shelf registration. Issuer is a well-known national or regional Alt-A lender. Low percentage of full documentation loans (< 65%, often less than 0%). High percentage of No Documentation loans (as high as 0%, sometimes higher). High percentage of non-owner occupied properties (> 0%, sometimes as high as 75-00%). Management practices Credit discipline and ongoing surveillance underlie our asset manager s buy/hold/sell decisions for sub-prime and Alt-A securities. Our analyses include the following: Asset screens identify securities with specific and quantifiable risks. Hybrid quantitative and qualitative credit models analyze loan-level collateral composition, historical underwriter performance trends, the impact of macroeconomic factors, and issuer risks. Security cash flows are estimated by running credit/prepayment model outputs through cash flow waterfall and by stress testing the capital structure under various loss and prepayment scenarios. Third party credit, liquidity, and other idiosyncratic risks are assessed as part of a general relative value analysis. Surveillance and risk management is ongoing on a security level and includes monthly model calibrations. As of December, 07, the unrealized losses on the Company s subprime exposure are attributable to changes in asset values versus exposure to realized losses resulting from receiving less than anticipated cash flows or due to the potential sale of assets required to meet future cash flow requirements. () The Company had no direct exposure through investments in subprime mortgage loans at December, 07. () The Company had the following exposure to Subprime lending at December, 07: (4) The Company did not have any financial guaranty or mortgage guaranty underwriting exposure to sub-prime mortgage risk as of December, 07. G. Retained Assets () A Wilton Re Access Account, which is an interest-bearing draft account, is one of several payment options available to beneficiaries of the Company s life insurance policies. A Wilton Re Access Account is established in the beneficiaries name at settlement, which is recorded as a supplemental contract without life contingencies (Liabilities, Surplus and Other Funds, Line ) in this statement. Accounts are established within one business day of claim settlement and the beneficiary has immediate access to the full value of the 9.9

43 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS account. The Wilton Re Access Account will begin earning interest the day it is established. Interest is compounded daily on the balance at the end of each day and credited to the account monthly. The interest rate was.50% for the duration of 07. The Company offers a Wilton Re Access Account as one of several payment options available to beneficiaries of life insurance policies. A Wilton Re Access Account is established when requested by the beneficiary, or if no other option is requested, where allowed. A Wilton Re Access Account provides for unlimited draft writing privileges. Draft re-orders and routine account services are provided at no cost. Fees apply only for services such as copies of drafts or statements, returned drafts and stop payment orders for $, $0 and $, respectively, subject to change without notice. () Wilton Re Access Account balance information by aging category is presented below. () A progression of Wilton Re Access Account balances on individual contracts is presented below. H. Insurance-Linked Securities (ILS) Contracts The Company did not have any ILS contracts as of December, 07 or December, 06.. EVENTS SUBSEQUENT Subsequent events have been evaluated up to the issue date of this Financial Statement, February 8, 08.. REINSURANCE A. Ceded Reinsurance Report Section - General Interrogatories () Are any of the reinsurers, listed in Schedule S as non-affiliated, owned in excess of 0% or controlled, either directly or indirectly, by the Company or by any representative, officer, trustee, or director of the Company? Yes [ ] No [ x ] () Have any policies issued by the Company been reinsured with a company chartered in a country other than the United States [excluding U.S. Branches of such companies] which is owned in excess of 0% or controlled directly or indirectly by an insured beneficiary, a creditor or an insured or any other person not primarily engaged in the insurance business? 9.0

44 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY Yes [ ] No [ x ] NOTES TO FINANCIAL STATEMENTS Section - Ceded Reinsurance Report - Part A () Does the Company have any reinsurance agreements in effect under which the reinsurer may unilaterally cancel any reinsurance for reasons other than for nonpayment of premium or other similar credits? Yes [ ] No [ x ] a. If yes, what is the estimated amount of the aggregate reduction in surplus of a unilateral cancellation by the reinsurer as of the date of this statement, for those agreements in which cancellation results in a net obligation of the Company to the reinsurer, and for which such obligation is not presently accrued? $ 0 b. What is the total amount of reinsurance credits taken, whether as an asset or as a reduction of liability, for these agreements in this statement? $ 0 () Does the reporting entity have any reinsurance agreements in effect such that the amount of losses paid or accrued through the statement date may result in a payment to the reinsurer of amounts which, in aggregate and allowing for offset of mutual credits from other reinsurance agreements with the same reinsurer, exceed the total direct premium collected under the reinsured policies? Yes [ ] No [ x ] Section - Ceded Reinsurance Report - Part B () What is the estimated amount of the aggregate reduction in surplus, (for agreements other than those under which the reinsurer may unilaterally cancel for reasons other than for nonpayment of premium or other similar credits that are reflected in Section above) of termination of all reinsurance agreements, by either party, as of the date of this statement? $ 0 () Have any new agreements been executed or existing agreements amended since January, 07, to include policies or contracts which were in-force or which had existing reserves established by the Company as of the effective date of the agreement? Yes [ ] No [ x ] If yes, what is the amount of reinsurance credits (whether an asset or a reduction of liability) taken for such new agreements or amendments? $ B. Uncollectible Reinsurance The Company did not write off any uncollectible reinsurance during 07 or 06. C. Commutation of Ceded Reinsurance The Company did not commute any ceded reinsurance during the year of 07 or 06. D. Certified Reinsurer Downgraded or Status Subject to Revocation () During 07, the Company did not cede business to any certified reinsurer. () During 07, the Company was not a certified reinsurer. 4. RETROSPECTIVELY RATED CONTRACTS & CONTRACTS SUBJECT TO REDETERMINATION The Company has no retrospectively rated contracts or contracts subject to redemption as of December, 07 or December,

45 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS 5. CHANGE IN INCURRED LOSSES AND LOSS ADJUSTMENT EXPENSES Reserves as of December, 07, including ceded ModCo reserves, were $0. As of December, 07, nothing has been paid for incurred losses and loss adjustment expenses attributable to insured events of prior years. Reserves, including ceded ModCo reserves, remaining for prior years are $0. The neutral prior year development of $0 from December, 06 to December, 07 is primarily related to a ModCo agreement with a former affiliate, Washington National Insurance Company (Washington National) under which Washington National assumes 00% of health risk from the Company. As additional information becomes known on individual claims experience, the original estimates are adjusted accordingly. None of the Company s accident and health contracts are subject to retrospective rating or experience refunds. Prior year reserves, excluding ceded MODCO reserves (Footnote 5) $... 0 MODCO claim reserves and liabilities... (7,70,7) Claim reserves and liabilities, December, prior year (Sch. H, Part, line.) $...7,70,7 Current year reserves, excluding ceded MODCO reserves (Footnote 5) $... 0 MODCO claim reserves and liabilities... (5,76,54) Claim reserves and liabilities, December, prior year (Sch. H, Part, line.) $...5,76,54 Favorable (unfavorable) prior year development (Footnote 5) $... 0 Change in MODCO claim reserves and liabilities...,99,69 Sch. H test (Sch. H, Part, line.) $...,99,69 6. INTERCOMPANY POOLING ARRANGEMENT The Company was not part of an intercompany pooling arrangement during 07 or STRUCTURED SETTLEMENTS The Company did not have any structured settlements for which it was contingently liable as of December, HEALTH CARE RECEIVABLES The Company did not have health care receivables that required disclosure as of December, 07 or 06, or PARTICIPATING POLICIES As of December, 07, 0.0% of in force individual and group life policies were participating policies. The Company accounts for its policyholder dividends in accordance with SSAP No. 5 - Life Contracts. The Company paid dividends in the amount of $856,06 to policyholders in 07 and did not allocate any additional income to such policyholders. 0. PREMIUM DEFICIENCY RESERVES Premium deficiency reserves as of December, 06 were as follows:. RESERVES FOR LIFE CONTRACTS AND DEPOSIT-TYPE CONTRACTS () In general, the Company calculates reserves using interpolated terminals plus unearned modal net premium with the immediate payment of claims. In some limited circumstances, the Company reports values provided by other companies using mean reserves. As such, deferred premiums are minimized. Where mean reserves are used, the Company waives deduction of deferred and fractional premiums upon death of the insured. Regardless of which reserving methodology is used, the Company returns any portion of the final premium beyond the date of death and calculates a separate reserve for this amount. Any surrender values in excess of the legally computed reserves are not split out separately. Reserves for deposit-type funds are equal to deposits received and interest credited to the benefit of contract holders, less withdrawals that represent a return to the contract holder. Tabular interest on deposit-type funds is calculated as the product 9.

46 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS of such valuation rate of interest times the mean of the amount of funds subject to such valuation rate of interest held at the beginning and end of the year of valuation. Claim reserves, including IBNR claims, represent management's estimate of the ultimate liability associated with unpaid policy claims, based upon analysis of past experience. To the extent the ultimate liability differs from the amounts recorded, such differences are reflected in operations when additional information becomes known. () Extra premiums are charged for policies issued on substandard lives. These extra premiums are in addition to the gross premium for the true age. Reserves are determined by computing the regular reserves for the plan using the valuation mortality increased by any table ratings. Reserves for any flat extras are held at unearned premium. For any substandard annuity contracts for which it maintained appropriate documentation, the Company uses the standard mortality table rates with a constant addition at each valuation date that adjusts the standard mortality table rates equal to the original underwriting estimate. This process results in an extra mortality assumption that over time gradually declines, and substandard reserves eventually grade into standard reserves. () At December, 07 and 06, the Company had $505,0,974 million and $500,879,0 million respectively, of insurance in force in which the gross premiums were less than the net premiums according to the standard valuation set by the state of domicile. Reserves to cover the above insurance totaled the gross amount of $6,509,640 and $6,06,0 at yearend 07 and 06, respectively, and are reported as miscellaneous reserves in Exhibit 5. (4) The Tabular Interest has been determined by formula as described in the instructions, adjusted to reflect fractional years of interest for material reinsurance transactions. The Tabular Less Actual Reserve Released calculation and the Tabular Cost have been determined by formula as described in the instructions. (5) For the determination of Tabular Interest on funds not involving life contingencies for each valuation rate of interest, the tabular interest is calculated as the product of such valuation rate of interest times the mean of the amount of funds subject to such valuation rate of interest held at the beginning and end of the year of valuation, adjusted for any significant reinsurance assumptions or cessions occurring during the year. (6) Other reserve changes in 07 are summarized below:. ANALYSIS OF ANNUITY ACTUARIAL RESERVES AND DEPOSIT LIABILITIES BY WITHDRAWAL CHARACTERISTICS 9.

47 STATEMENT OF THE WILCO LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS. PREMIUM AND ANNUITY CONSIDERATIONS DEFERRED AND UNCOLLECTED Deferred and uncollected life insurance premiums and annuity considerations as of December, 07, were as follows: 4. SEPARATE ACCOUNTS The Company had no separate accounts as of December, 07 or December, LOSS/CLAIM ADJUSTMENT EXPENSES A. The balance in the liability for unpaid accident and health claim adjustment expenses as of December, 07 and 06 were $,9,66 and $,090,79, respectively. B-C. The Company incurred $0 and paid $0 of claim adjustment expenses in the current year of which $0 of the paid amount was attributable to insured or covered events of prior years. The Company did not change the provision for insured events of prior years. D. The Company does not estimate anticipated salvage and subrogation in its determination of the liability for unpaid claims/losses. 9.4