Proposed transfer of Scottish Equitable plc s annuity business

Transcription

1 Annuity Transfer Team, Edinburgh Park, Edinburgh EH12 9SE Our ref: RLP1 019S110D Mr Andrew Sample Sample Street Sample Town Sample County SA1 1AS Phone: UK Freephone +44 (0) from overseas Web: aegon.co.uk/rlptransfer March 2017 Dear Policyholder Policy number: Pol_1 Proposed transfer of Scottish Equitable plc s annuity business AGN11_S_D10446_010317_SAMPLE_RLP_453220\000001\1\1of8\ Here s some important information about your annuity policy, please read it carefully. There s more information online at aegon.co.uk/rlptransfer. As part of a strategic review of our business, Aegon, the parent company of Scottish Equitable plc has decided to exit the annuity market. Annuities haven't been a key market for Aegon since 2010 and its decision to leave the annuity market entirely will allow Aegon to focus on the continued growth of its pre-retirement product offering. As a result of this review Scottish Equitable plc has agreed to sell and transfer a significant part of its annuity business, including your policy above to Rothesay Life plc (Rothesay). Rothesay was established in 2007 and is a UK regulated insurance company making pension payments of over 1.3 billion a year from over 26 billion of insurance contracts. Rothesay has become one of the leading specialist providers of insurance solutions in the UK market for annuities. Rothesay is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA. You can find out more by visiting rothesaylife.com/aboutus. The proposed transfer requires High Court approval and Scottish Equitable plc has applied to the High Court to formally transfer certain policies, including your policy above, from Scottish Equitable plc to Rothesay. The information in this letter relates to the proposed transfer of the policies to Rothesay. At the time of the agreement to sell and transfer the annuity business to Rothesay, Scottish Equitable plc reinsured the annuity business with Rothesay. Further details of this reinsurance arrangement is included in the Questions and Answers below. The application to the Court was made on 17 February 2017 and we re now notifying our affected policyholders that we re proposing to transfer their policy to Rothesay. You have the right to object to these proposals if you feel you may be disadvantaged. Details of how to do so are provided below. Summary of the proposals It's proposed to transfer your annuity to a new provider, Rothesay Life plc on 30 June If, having read the information in this letter you have any questions or concerns, or wish to object please contact us using any of the contact details above. The timing and amount of your annuity payments will not be affected by the transfer. Any contractual guarantees you have will continue and the terms and conditions of your policy won't change as a result of the transfer. The proposals have been reviewed by an Independent Expert and his conclusions are summarised in this letter. There's more detailed information about the transfer in this letter and on our website at aegon.co.uk/rlptransfer. 1

2 AGN11_S_D10446_010317_SAMPLE_RLP_453220\000001\2\2of8\ If you have more than one annuity policy transferring to Rothesay, or a with-profits policy, you ll receive more than one letter. Please read all letters carefully as not all policies are impacted in the same way. If anyone else has an interest in your policy, for example if it's jointly owned, or if there are joint or contingent beneficiaries (e.g. a spouse) for an annuity, or if your policy has been assigned, please share this letter and the accompanying Questions and Answers with them and make them aware of their right to raise an objection. How the proposed transfer will affect you The transfer won t affect the terms and conditions of your annuity policy. There will be no changes to your benefit levels, payment timings or frequency and the basis of any escalations that apply to your policy will stay the same. You won t need to make any changes or take any action in relation to your policy as a result of the transfer. If the transfer is approved: Rothesay will become the provider of your annuity policy and be responsible for making any payments due under the terms of your policy. Payments will continue to be made as before, including the timing and the amount of the payments due. Your policy will retain the same policy number, as above. Rothesay will become responsible for the servicing of your policy from the date of the transfer and they'll write to you with new contact details which you should use for all future correspondence or queries. If you do have any questions about any of the information in this letter, or your policy generally, you can still contact us until the transfer date. You ll see references to Rothesay on any correspondence, including payments, you ll get after the transfer date which is expected to be on 30 June Further information is provided in the Questions and Answers at the end of this letter. How you are protected The proposed transfer process protects policyholders in a number of ways to make sure that they re not materially adversely affected. The protections include: the appointment of an Independent Expert who reports on the effects of the transfer on policyholders a summary of his conclusions is included later in this letter; ongoing review by our regulators, the FCA and the PRA, until the proposed transfer date; advance notification of the proposed transfer to affected policyholders (this letter); your right to object to the proposed transfer if you consider that you may be disadvantaged by the carrying out of the transfer; and High Court approval the transfer proposals will be heard at the High Court of Justice, Chancery Division, the Rolls Building, Fetter Lane, London EC4A 1NL on 12 June The Court will consider the views of policyholders, the Independent Expert and the regulators before reaching a decision on whether to approve the proposed transfer. In addition to the above protections, the Chief Actuary and the With-Profits Actuary of Scottish Equitable plc, together with the Chief Actuary of Rothesay have each written their own reports on the effects of the proposed transfer on the companies and on policyholders. You can access their full reports by visiting our website at aegon.co.uk/rlptransfer. Details of the proposed transfer are contained in a legal document called the Scheme and we've summarised key information about the Scheme in this letter and in the Questions and Answers below. A more detailed summary of the Scheme, including details of the transferring liabilities, continuity of proceedings and the approvals needed should the Scheme need to be modified in the future, can be found on our website noted above. It also contains a copy of the full Scheme as well as other information relating to the Scheme. If the Scheme is approved by the Court, Rothesay will become the insurer in relation to your above policy and will become responsible for all administration and benefit payments in respect of the transferred policy from the transfer date. Scottish Equitable plc will no longer perform any role in relation to the transferred policy. 2

3 AGN11_S_D10446_010317_SAMPLE_RLP_453220\000001\3\3of8\ Rothesay will become data controller (the person who determines the purpose for which any personal data is processed) in place of Scottish Equitable plc in relation to the transferred business and consents and information given to Scottish Equitable plc will be deemed to have been given to Rothesay. The Scheme gives effect to the proposed transfer of all transferring policies, together with all rights and powers in relation to the transferring business. If the Court approves the Scheme, the transferring business of Scottish Equitable plc will transfer to Rothesay. It s expected that the proposed transfer will become effective at 00:01 BST on 30 June 2017 (the proposed transfer date). If this date changes, we'll let policyholders know by updating the information on our website at aegon.co.uk/rlptransfer. Independent Expert s Report As mentioned above, an Independent Expert has been appointed to report on the effects of the transfer on policyholders. The following is a summary of the conclusions from his report in relation to transferring policies: I have been instructed by Scottish Equitable plc and Rothesay to report on the terms of the proposed transfer as outlined above. The transfer will be effected by means of the Scheme. I am a Fellow of the Institute and Faculty of Actuaries in the UK and a partner of Milliman LLP. I confirm that I do not have any direct or indirect interest in Scottish Equitable plc, Rothesay or any other related firms that could compromise my independence. I am satisfied that the implementation of the Scheme: Will not alter the amount of benefits payable under the transferring Scottish Equitable plc policies, and will not materially affect the security of those benefits; and Will not materially affect the standards of service received by the transferring Scottish Equitable plc policies, or the governance applicable to their policies. A transfer of long-term business from Zurich Assurance Limited to Rothesay is also proposed to take place in June 2017 under a separate scheme (the Zurich Scheme). My conclusions above will be the same whether or not the Zurich Scheme is sanctioned. The Independent Expert s full report, as well as a detailed summary of the full report, is available at aegon.co.uk/rlptransfer. It shows in much more detail how the Independent Expert has reached his conclusions. You can also request a copy by calling our helpline on UK Freephone or from overseas, by from annuitytransfer@aegon.co.uk or by writing to us at Aegon, Annuity Transfer Team, Edinburgh EH12 9SE. Do I need to do anything? Please make sure you understand what the proposals mean for you by reading this letter and the Questions and Answers below. You can also find more information online at aegon.co.uk/rlptransfer. If you have any queries or concerns about the proposals you can contact us on our dedicated helpline UK Freephone or from overseas; us at annuitytransfer@aegon.co.uk; or write to us at: Aegon, Annuity Transfer Team, Edinburgh Park, Edinburgh EH12 9SE. If writing to us, it would help if you could provide your full name, policy number and the reference noted at the top of this letter. Copies of all the documents we publish online can also be viewed at the above address, or requested by phone or free of charge. If you re satisfied with the proposed transfer you don t need to do anything else. If the proposed transfer is approved, we'll publish confirmation on our website noted above after the transfer date. Rothesay will also write to you after the transfer has completed to let you know. 3

4 Objections? If, having read the information available, you feel you may be disadvantaged by the proposed transfer, you have the right to object. If you wish to object, it would be helpful if you could let us know. You can contact us using any of the above contact details. It would help the process if you could explain the reasons for your objection when you contact us. We ll acknowledge and reply in writing to all objections we receive. We'll also submit copies of all policyholder objections to the Court which will consider them and the Scheme on 12 June You can, if you wish, choose to present your views to Court yourself. You can also choose to be represented at Court if you prefer. As a result of the legal requirements relating to the transfer of insurance business carried on, in, or from, within Jersey and policies issued to residents of the Bailiwick of Guernsey and/or written under Guernsey law, there will be similar schemes to transfer such business in those jurisdictions. Please write to us, call us or refer to our website for more information if you think you may hold a policy affected by the scheme in Jersey or the Bailiwick of Guernsey and haven't otherwise received a separate notification about your Jersey or Bailiwick of Guernsey policy by 31 March If you re satisfied that you understand the transfer proposals and don't have any concerns or objections then you don t need to do anything further. If you need a copy of this letter in braille, audio or large print, please contact the helpline on UK Freephone or from overseas. Yours sincerely Stephen McGee Chief Financial Officer Scottish Equitable plc AGN11_S_D10446_010317_SAMPLE_RLP_453220\000001\4\4of8\ Aegon is a brand name of Scottish Equitable plc. Scottish Equitable plc, registered office: Edinburgh Park, Edinburgh EH12 9SE. Registered in Scotland (No ). Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number An Aegon company. 4

5 AGN11_S_D10446_010317_SAMPLE_RLP_453220\000001\5\5of8\ Questions and Answers 1. Who is Aegon? Aegon has been the brand name of Scottish Equitable plc since Aegon is a multinational life insurance, pensions and investment company and is the ultimate parent company of Scottish Equitable plc. 2. What does the transfer mean for me? Your policy is currently provided by Scottish Equitable plc. If the transfer is approved, your policy will transfer to Rothesay and they will become your policy provider. There will be no change to your policy terms and conditions or product features. The changes you will see are the name and brand of Rothesay in any documents sent on to you after the transfer date and new contact details for policy enquiries. The transfer will have no effect on: the way your policy works; any payments you receive under the terms of your policy; and the terms and conditions of your policy. Information about how existing proceedings by or against Scottish Equitable plc will be dealt with after the transfer is set out in the detailed Scheme summary and the full Scheme on the website, along with information about how Scottish Equitable plc and Rothesay will deal with certain liabilities which are excluded from the transfer. 3. Who is Rothesay Life plc? Rothesay Life plc (Rothesay) was established in 2007 and is a UK regulated insurance company making pension payments of over 1.3 billion a year from over 26 billion of insurance contracts. Rothesay has become one of the leading providers of insurance solutions in the UK market for annuities. Rothesay is authorised by the PRA and regulated by the FCA and the PRA. It's required to provide high levels of financial security to all of its policyholders. Rothesay does this by holding surplus funds to allow it to withstand extreme financial events without needing extra funding or support from others. It aims to provide long-term security through robust risk and capital management. Learn more about them at rothesaylife.com/aboutus. The Independent Expert has noted in his report that; Rothesay currently manages significant volumes of non-profit annuity business, and I consider that the Rothesay Board is experienced in the management and governance of non-profit annuity business. 4. Why is Scottish Equitable plc doing this? As part of a strategic review of our business, Aegon, the parent company of Scottish Equitable plc has decided to exit the annuity market as annuities haven't been a key market for Aegon since 2010 and its decision to leave the annuity market entirely will allow Aegon to focus on the continued growth of its pre-retirement product offering. As a result of this review Scottish Equitable plc has agreed to sell and transfer a significant part of its annuity business, including your policy above to Rothesay Life plc. You have the right to object to these proposals if you feel you may be disadvantaged. Details of how to do so are provided in Question 17, below. We also intend to transfer the remaining annuity business to Legal and General Assurance Society Limited under an unrelated and separate scheme shortly after the Rothesay Scheme. If you have more than one annuity policy and you haven't received a notification about your other annuity policy transferring to Rothesay by 31 March 2017, you may receive a letter from us later in the year about the proposed transfer of Scottish Equitable plc s remaining annuity policies to Legal and General Assurance Society Limited. If you have any concerns, please contact us using any of the details above. The Independent Expert has also considered the impact of the Legal and General Assurance Society Limited transfer and has confirmed in his report that his conclusions will be the same whether or not that scheme is sanctioned. 5

6 AGN11_S_D10446_010317_SAMPLE_RLP_453220\000001\6\6of8\ 5. What is the effect of the transfer on me and my policy? There s no change to your policy benefits or terms and conditions. The timing and frequency of your regular annuity payments will be unaffected by these changes. Rothesay Life plc will honour any contractual guarantees that you may have on your annuity policy. 6. Will I receive any payment as a result of the transfer? No, this isn t a stock market flotation or release of surplus funds such as a re-attribution. No new shares will be issued to existing shareholders or made available for general sale. 7. Is my policy safe? / Will I lose any benefits? If the transfer is approved, the level of security for your policy benefits will depend on the financial strength of Rothesay Life plc. The Independent Expert is satisfied that there will be no material adverse effect on the security of your benefits as a result of the transfer. There will not be any change to the terms and conditions of your policy or the benefits you receive. 8. Why is there a reinsurance arrangement? When Scottish Equitable plc agreed the terms of the sale of the transferring business with Rothesay Life plc, a reinsurance arrangement was put in place to achieve the economic benefits and transfer the liabilities and risk before the formal transfer of the business. Should the proposed transfer not be approved by the Court this reinsurance arrangement will remain in place. The transfer makes permanent the economic benefit and risk reassignment without the need for the reinsurance arrangement. 9. Do I have a vote on the transfer? As the transfer is subject to Court approval, it s not open to a vote of policyholders or interested parties. As set out in your letter, if you feel you may be disadvantaged by the transfer you have the right to object to the transfer taking place and for this objection to be heard before the Court. Should the Court approve the transfer, the transferring business will transfer to Rothesay Life plc. 10. I no longer have a policy with Scottish Equitable plc so why are you writing to me? We ve made every effort to ensure we only write to customers who have active policies. If your policy is no longer in force then our proposals will no longer apply to you. 11. Is this a merger? It s not a 'merger' of companies, but a transfer of business from Scottish Equitable plc to Rothesay Life plc. 12. Why is there a Court hearing? The UK insurance business transfer process is governed by Part VII of the Financial Services and Markets Act The transfer can only be approved by the Court. The Court will consider the opinion of the Independent Expert, the regulators and views of policyholders before reaching its decision. 13. I m not a policyholder so why are you writing to me? We re writing to all our affected customers, as required by the Court, to inform them of our proposals and to outline the process we re following. The definition of a customer includes policyholders, trustees, assignees, and attorneys under a Power of Attorney, of a policy. 6

7 AGN11_S_D10446_010317_SAMPLE_RLP_453220\000001\7\7of8\ 14. Do Scottish Equitable plc still sell annuities? No Scottish Equitable plc no longer sell annuities. 15. How do I find out more about this proposal? You can read the full and summary version of the Scheme document, the full and summary version of the Independent Expert s report and the reports of the Chief Actuary and With-Profits Actuary of Scottish Equitable plc and access the report of the Chief Actuary of Rothesay at aegon.co.uk/rlptransfer. You can also request copies of all the documents by calling our dedicated helpline on UK Freephone or from overseas; us at annuitytransfer@aegon.co.uk; or write to us at Aegon, Annuity Transfer Team, Edinburgh Park, Edinburgh EH12 9SE. If writing to us, it would help if you could provide your full name, policy number and the reference noted at the top of this letter. 16. What is the Scheme? The Scheme is the legal document that, if approved, gives effect to the proposed transfer. The Scheme requires the approval of the Court. As it's a detailed technical document, we have summarised certain key features in this letter but there's also a more complete summary that's available online. If the Scheme requires amending or changing in the future the changes would require consultation with the FCA and PRA, review by an Independent Expert and Court approval. However, there are certain circumstances such as a change to the date of the transfer where further Court approval wouldn't be required. It's not expected that the date of the transfer will need to change. The Scheme transfers the transferring policies and related assets and certain liabilities. Any proceedings by or against Scottish Equitable plc in relation to the transferred business (including any future proceedings not yet begun) will be continued by or against Rothesay after the date of the transfer. Rothesay will be entitled to any and all defences, claims, counterclaims, rights of set-off and any other rights that Scottish Equitable plc would have had. However, certain assets and liabilities related to the transferred business are excluded from the transfer and will not transfer to Rothesay under the Scheme. Scottish Equitable plc will indemnify Rothesay in respect of any such excluded assets or excluded liabilities. Any mis-selling liabilities which crystallise on or prior to 1 April 2031 will remain liabilities of Scottish Equitable plc (and the parties have agreed certain risk sharing and claims handling arrangements in relation to these liabilities). Mis-selling liabilities which crystallise after 1 April 2031 will transfer pursuant to the Scheme and will become liabilities of Rothesay. 17. Do I need to do anything? If, having read the information available, you re satisfied with the transfer proposals you don t need to do anything further and no additional action is required on your part in relation to payments due from, or premiums payable to, Rothesay (for example, you don't need to inform your bank). If you have more than one annuity policy transferring to Rothesay, or a with-profits policy, you ll receive more than one letter. Please read all letters carefully as not all policies are impacted in the same way. If anyone else has an interest in your policy, for example if it's jointly owned, or if there are joint or contingent beneficiaries (e.g. a spouse) for an annuity, or if your policy has been assigned, please share this letter and the accompanying Questions and Answers with them and make them aware of their right to raise an objection. If you feel you may be disadvantaged by the proposed transfer, you have the right to object. If you wish to object, it would be helpful if you could let us know. You can contact us using any of the above contact details. It would help the process if you could explain the reasons for your objection when you contact us. We ll acknowledge and reply in writing to all objections we receive. We'll also submit copies of all policyholder objections to the Court which will consider them and the Scheme on 12 June

8 As a result of the legal requirements relating to the transfer of insurance business carried on in or from within Jersey and policies issued to residents of the Bailiwick of Guernsey and/or written under Guernsey law, there will be similar schemes to transfer such business in those jurisdictions. Please write to us, call us or refer to our website for more information if you think you may hold a policy affected by the scheme in Jersey or the Bailiwick of Guernsey and haven't otherwise received a separate notification about your Jersey or Bailiwick of Guernsey policy by 31 March You can if you wish choose to present your views to Court yourself. You can also choose to be represented at Court if you prefer. If you re satisfied that you understand the transfer proposals and don't have any concerns or objections then you don t need to do anything further. If you require a copy of this letter in braille, audio or large print, please contact the helpline on UK Freephone or from overseas. AGN11_S_D10446_010317_SAMPLE_RLP_453220\000001\8\8of8\ Aegon is a brand name of Scottish Equitable plc. Scottish Equitable plc, registered office: Edinburgh Park, Edinburgh EH12 9SE. Registered in Scotland (No ). Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number An Aegon company Aegon UK plc DIR /16 8

9 Annuity Transfer Team, Edinburgh Park, Edinburgh EH12 9SE Our ref: RLP1 019S110D Mr Andrew Sample Sample Street Sample Town Sample County SA1 1AS Phone: UK Freephone +44 (0) from overseas Web: aegon.co.uk/rlptransfer March 2017 Dear Policyholder Policy number: Pol_1 Proposed transfer of Scottish Equitable plc s annuity business AGN11_S_D10446_010317_SAMPLE_RLP_453220\000002\9\1of8\ Here s some important information about your annuity policy, please read it carefully. There s more information online at aegon.co.uk/rlptransfer. As part of a strategic review of our business, Aegon, the parent company of Scottish Equitable plc has decided to exit the annuity market. Annuities haven't been a key market for Aegon since 2010 and its decision to leave the annuity market entirely will allow Aegon to focus on the continued growth of its pre-retirement product offering. As a result of this review Scottish Equitable plc has agreed to sell and transfer a significant part of its annuity business, including your policy above to Rothesay Life plc (Rothesay). Rothesay was established in 2007 and is a UK regulated insurance company making pension payments of over 1.3 billion a year from over 26 billion of insurance contracts. Rothesay has become one of the leading specialist providers of insurance solutions in the UK market for annuities. Rothesay is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA. You can find out more by visiting rothesaylife.com/aboutus. The proposed transfer requires High Court approval and Scottish Equitable plc has applied to the High Court to formally transfer certain policies, including your policy above, from Scottish Equitable plc to Rothesay. The information in this letter relates to the proposed transfer of the policies to Rothesay. At the time of the agreement to sell and transfer the annuity business to Rothesay, Scottish Equitable plc reinsured the annuity business with Rothesay. Further details of this reinsurance arrangement is included in the Questions and Answers below. The application to the Court was made on 17 February 2017 and we re now notifying our affected policyholders that we re proposing to transfer their policy to Rothesay. You have the right to object to these proposals if you feel you may be disadvantaged. Details of how to do so are provided below. Summary of the proposals It's proposed to transfer your annuity to a new provider, Rothesay Life plc on 30 June If, having read the information in this letter you have any questions or concerns, or wish to object please contact us using any of the contact details above. The timing and amount of your annuity payments will not be affected by the transfer. Any contractual guarantees you have will continue and the terms and conditions of your policy won't change as a result of the transfer. The proposals have been reviewed by an Independent Expert and his conclusions are summarised in this letter. There's more detailed information about the transfer in this letter and on our website at aegon.co.uk/rlptransfer. 1

10 AGN11_S_D10446_010317_SAMPLE_RLP_453220\000002\10\2of8\ If you have more than one annuity policy transferring to Rothesay, or a with-profits policy, you ll receive more than one letter. Please read all letters carefully as not all policies are impacted in the same way. If anyone else has an interest in your policy, for example if it's jointly owned, or if there are joint or contingent beneficiaries (e.g. a spouse) for an annuity, or if your policy has been assigned, please share this letter and the accompanying Questions and Answers with them and make them aware of their right to raise an objection. How the proposed transfer will affect you The transfer won t affect the terms and conditions of your annuity policy. There will be no changes to your benefit levels, payment timings or frequency and the basis of any escalations that apply to your policy will stay the same. You won t need to make any changes or take any action in relation to your policy as a result of the transfer. If the transfer is approved: Rothesay will become the provider of your annuity policy and be responsible for making any payments due under the terms of your policy. Payments will continue to be made as before, including the timing and the amount of the payments due. Your policy will retain the same policy number, as above. Rothesay will become responsible for the servicing of your policy from the date of the transfer and they'll write to you with new contact details which you should use for all future correspondence or queries. If you do have any questions about any of the information in this letter, or your policy generally, you can still contact us until the transfer date. You ll see references to Rothesay on any correspondence, including payments, you ll get after the transfer date which is expected to be on 30 June Further information is provided in the Questions and Answers at the end of this letter. How you are protected The proposed transfer process protects policyholders in a number of ways to make sure that they re not materially adversely affected. The protections include: the appointment of an Independent Expert who reports on the effects of the transfer on policyholders a summary of his conclusions is included later in this letter; ongoing review by our regulators, the FCA and the PRA, until the proposed transfer date; advance notification of the proposed transfer to affected policyholders (this letter); your right to object to the proposed transfer if you consider that you may be disadvantaged by the carrying out of the transfer; and High Court approval the transfer proposals will be heard at the High Court of Justice, Chancery Division, the Rolls Building, Fetter Lane, London EC4A 1NL on 12 June The Court will consider the views of policyholders, the Independent Expert and the regulators before reaching a decision on whether to approve the proposed transfer. In addition to the above protections, the Chief Actuary and the With-Profits Actuary of Scottish Equitable plc, together with the Chief Actuary of Rothesay have each written their own reports on the effects of the proposed transfer on the companies and on policyholders. You can access their full reports by visiting our website at aegon.co.uk/rlptransfer. Details of the proposed transfer are contained in a legal document called the Scheme and we've summarised key information about the Scheme in this letter and in the Questions and Answers below. A more detailed summary of the Scheme, including details of the transferring liabilities, continuity of proceedings and the approvals needed should the Scheme need to be modified in the future, can be found on our website noted above. It also contains a copy of the full Scheme as well as other information relating to the Scheme. If the Scheme is approved by the Court, Rothesay will become the insurer in relation to your above policy and will become responsible for all administration and benefit payments in respect of the transferred policy from the transfer date. Scottish Equitable plc will no longer perform any role in relation to the transferred policy. 2

11 AGN11_S_D10446_010317_SAMPLE_RLP_453220\000002\11\3of8\ Rothesay will become data controller (the person who determines the purpose for which any personal data is processed) in place of Scottish Equitable plc in relation to the transferred business and consents and information given to Scottish Equitable plc will be deemed to have been given to Rothesay. The Scheme gives effect to the proposed transfer of all transferring policies, together with all rights and powers in relation to the transferring business. If the Court approves the Scheme, the transferring business of Scottish Equitable plc will transfer to Rothesay. It s expected that the proposed transfer will become effective at 00:01 BST on 30 June 2017 (the proposed transfer date). If this date changes, we'll let policyholders know by updating the information on our website at aegon.co.uk/rlptransfer. Independent Expert s Report As mentioned above, an Independent Expert has been appointed to report on the effects of the transfer on policyholders. The following is a summary of the conclusions from his report in relation to transferring policies: I have been instructed by Scottish Equitable plc and Rothesay to report on the terms of the proposed transfer as outlined above. The transfer will be effected by means of the Scheme. I am a Fellow of the Institute and Faculty of Actuaries in the UK and a partner of Milliman LLP. I confirm that I do not have any direct or indirect interest in Scottish Equitable plc, Rothesay or any other related firms that could compromise my independence. I am satisfied that the implementation of the Scheme: Will not alter the amount of benefits payable under the transferring Scottish Equitable plc policies, and will not materially affect the security of those benefits; and Will not materially affect the standards of service received by the transferring Scottish Equitable plc policies, or the governance applicable to their policies. A transfer of long-term business from Zurich Assurance Limited to Rothesay is also proposed to take place in June 2017 under a separate scheme (the Zurich Scheme). My conclusions above will be the same whether or not the Zurich Scheme is sanctioned. The Independent Expert s full report, as well as a detailed summary of the full report, is available at aegon.co.uk/rlptransfer. It shows in much more detail how the Independent Expert has reached his conclusions. You can also request a copy by calling our helpline on UK Freephone or from overseas, by from annuitytransfer@aegon.co.uk or by writing to us at Aegon, Annuity Transfer Team, Edinburgh EH12 9SE. Do I need to do anything? Please make sure you understand what the proposals mean for you by reading this letter and the Questions and Answers below. You can also find more information online at aegon.co.uk/rlptransfer. If you have any queries or concerns about the proposals you can contact us on our dedicated helpline UK Freephone or from overseas; us at annuitytransfer@aegon.co.uk; or write to us at: Aegon, Annuity Transfer Team, Edinburgh Park, Edinburgh EH12 9SE. If writing to us, it would help if you could provide your full name, policy number and the reference noted at the top of this letter. Copies of all the documents we publish online can also be viewed at the above address, or requested by phone or free of charge. If you re satisfied with the proposed transfer you don t need to do anything else. If the proposed transfer is approved, we'll publish confirmation on our website noted above after the transfer date. Rothesay will also write to you after the transfer has completed to let you know. 3

12 Objections? If, having read the information available, you feel you may be disadvantaged by the proposed transfer, you have the right to object. If you wish to object, it would be helpful if you could let us know. You can contact us using any of the above contact details. It would help the process if you could explain the reasons for your objection when you contact us. We ll acknowledge and reply in writing to all objections we receive. We'll also submit copies of all policyholder objections to the Court which will consider them and the Scheme on 12 June You can, if you wish, choose to present your views to Court yourself. You can also choose to be represented at Court if you prefer. As a result of the legal requirements relating to the transfer of insurance business carried on, in, or from, within Jersey and policies issued to residents of the Bailiwick of Guernsey and/or written under Guernsey law, there will be similar schemes to transfer such business in those jurisdictions. Please write to us, call us or refer to our website for more information if you think you may hold a policy affected by the scheme in Jersey or the Bailiwick of Guernsey and haven't otherwise received a separate notification about your Jersey or Bailiwick of Guernsey policy by 31 March If you re satisfied that you understand the transfer proposals and don't have any concerns or objections then you don t need to do anything further. If you need a copy of this letter in braille, audio or large print, please contact the helpline on UK Freephone or from overseas. Yours sincerely Stephen McGee Chief Financial Officer Scottish Equitable plc AGN11_S_D10446_010317_SAMPLE_RLP_453220\000002\12\4of8\ Aegon is a brand name of Scottish Equitable plc. Scottish Equitable plc, registered office: Edinburgh Park, Edinburgh EH12 9SE. Registered in Scotland (No ). Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number An Aegon company. 4

13 AGN11_S_D10446_010317_SAMPLE_RLP_453220\000002\13\5of8\ Questions and Answers 1. Who is Aegon? Aegon has been the brand name of Scottish Equitable plc since Aegon is a multinational life insurance, pensions and investment company and is the ultimate parent company of Scottish Equitable plc. 2. What does the transfer mean for me? Your policy is currently provided by Scottish Equitable plc. If the transfer is approved, your policy will transfer to Rothesay and they will become your policy provider. There will be no change to your policy terms and conditions or product features. The changes you will see are the name and brand of Rothesay in any documents sent on to you after the transfer date and new contact details for policy enquiries. The transfer will have no effect on: the way your policy works; any payments you receive under the terms of your policy; and the terms and conditions of your policy. Information about how existing proceedings by or against Scottish Equitable plc will be dealt with after the transfer is set out in the detailed Scheme summary and the full Scheme on the website, along with information about how Scottish Equitable plc and Rothesay will deal with certain liabilities which are excluded from the transfer. 3. Who is Rothesay Life plc? Rothesay Life plc (Rothesay) was established in 2007 and is a UK regulated insurance company making pension payments of over 1.3 billion a year from over 26 billion of insurance contracts. Rothesay has become one of the leading providers of insurance solutions in the UK market for annuities. Rothesay is authorised by the PRA and regulated by the FCA and the PRA. It's required to provide high levels of financial security to all of its policyholders. Rothesay does this by holding surplus funds to allow it to withstand extreme financial events without needing extra funding or support from others. It aims to provide long-term security through robust risk and capital management. Learn more about them at rothesaylife.com/aboutus. The Independent Expert has noted in his report that; Rothesay currently manages significant volumes of non-profit annuity business, and I consider that the Rothesay Board is experienced in the management and governance of non-profit annuity business. 4. Why is Scottish Equitable plc doing this? As part of a strategic review of our business, Aegon, the parent company of Scottish Equitable plc has decided to exit the annuity market as annuities haven't been a key market for Aegon since 2010 and its decision to leave the annuity market entirely will allow Aegon to focus on the continued growth of its pre-retirement product offering. As a result of this review Scottish Equitable plc has agreed to sell and transfer a significant part of its annuity business, including your policy above to Rothesay Life plc. You have the right to object to these proposals if you feel you may be disadvantaged. Details of how to do so are provided in Question 17, below. We also intend to transfer the remaining annuity business to Legal and General Assurance Society Limited under an unrelated and separate scheme shortly after the Rothesay Scheme. If you have more than one annuity policy and you haven't received a notification about your other annuity policy transferring to Rothesay by 31 March 2017, you may receive a letter from us later in the year about the proposed transfer of Scottish Equitable plc s remaining annuity policies to Legal and General Assurance Society Limited. If you have any concerns, please contact us using any of the details above. The Independent Expert has also considered the impact of the Legal and General Assurance Society Limited transfer and has confirmed in his report that his conclusions will be the same whether or not that scheme is sanctioned. 5

14 AGN11_S_D10446_010317_SAMPLE_RLP_453220\000002\14\6of8\ 5. What is the effect of the transfer on me and my policy? There s no change to your policy benefits or terms and conditions. The timing and frequency of your regular annuity payments will be unaffected by these changes. Rothesay Life plc will honour any contractual guarantees that you may have on your annuity policy. 6. Will I receive any payment as a result of the transfer? No, this isn t a stock market flotation or release of surplus funds such as a re-attribution. No new shares will be issued to existing shareholders or made available for general sale. 7. Is my policy safe? / Will I lose any benefits? If the transfer is approved, the level of security for your policy benefits will depend on the financial strength of Rothesay Life plc. The Independent Expert is satisfied that there will be no material adverse effect on the security of your benefits as a result of the transfer. There will not be any change to the terms and conditions of your policy or the benefits you receive. 8. Why is there a reinsurance arrangement? When Scottish Equitable plc agreed the terms of the sale of the transferring business with Rothesay Life plc, a reinsurance arrangement was put in place to achieve the economic benefits and transfer the liabilities and risk before the formal transfer of the business. Should the proposed transfer not be approved by the Court this reinsurance arrangement will remain in place. The transfer makes permanent the economic benefit and risk reassignment without the need for the reinsurance arrangement. 9. Do I have a vote on the transfer? As the transfer is subject to Court approval, it s not open to a vote of policyholders or interested parties. As set out in your letter, if you feel you may be disadvantaged by the transfer you have the right to object to the transfer taking place and for this objection to be heard before the Court. Should the Court approve the transfer, the transferring business will transfer to Rothesay Life plc. 10. I no longer have a policy with Scottish Equitable plc so why are you writing to me? We ve made every effort to ensure we only write to customers who have active policies. If your policy is no longer in force then our proposals will no longer apply to you. 11. Is this a merger? It s not a 'merger' of companies, but a transfer of business from Scottish Equitable plc to Rothesay Life plc. 12. Why is there a Court hearing? The UK insurance business transfer process is governed by Part VII of the Financial Services and Markets Act The transfer can only be approved by the Court. The Court will consider the opinion of the Independent Expert, the regulators and views of policyholders before reaching its decision. 13. I m not a policyholder so why are you writing to me? We re writing to all our affected customers, as required by the Court, to inform them of our proposals and to outline the process we re following. The definition of a customer includes policyholders, trustees, assignees, and attorneys under a Power of Attorney, of a policy. 6

15 AGN11_S_D10446_010317_SAMPLE_RLP_453220\000002\15\7of8\ 14. Do Scottish Equitable plc still sell annuities? No Scottish Equitable plc no longer sell annuities. 15. How do I find out more about this proposal? You can read the full and summary version of the Scheme document, the full and summary version of the Independent Expert s report and the reports of the Chief Actuary and With-Profits Actuary of Scottish Equitable plc and access the report of the Chief Actuary of Rothesay at aegon.co.uk/rlptransfer. You can also request copies of all the documents by calling our dedicated helpline on UK Freephone or from overseas; us at annuitytransfer@aegon.co.uk; or write to us at Aegon, Annuity Transfer Team, Edinburgh Park, Edinburgh EH12 9SE. If writing to us, it would help if you could provide your full name, policy number and the reference noted at the top of this letter. 16. What is the Scheme? The Scheme is the legal document that, if approved, gives effect to the proposed transfer. The Scheme requires the approval of the Court. As it's a detailed technical document, we have summarised certain key features in this letter but there's also a more complete summary that's available online. If the Scheme requires amending or changing in the future the changes would require consultation with the FCA and PRA, review by an Independent Expert and Court approval. However, there are certain circumstances such as a change to the date of the transfer where further Court approval wouldn't be required. It's not expected that the date of the transfer will need to change. The Scheme transfers the transferring policies and related assets and certain liabilities. Any proceedings by or against Scottish Equitable plc in relation to the transferred business (including any future proceedings not yet begun) will be continued by or against Rothesay after the date of the transfer. Rothesay will be entitled to any and all defences, claims, counterclaims, rights of set-off and any other rights that Scottish Equitable plc would have had. However, certain assets and liabilities related to the transferred business are excluded from the transfer and will not transfer to Rothesay under the Scheme. Scottish Equitable plc will indemnify Rothesay in respect of any such excluded assets or excluded liabilities. Any mis-selling liabilities which crystallise on or prior to 1 April 2031 will remain liabilities of Scottish Equitable plc (and the parties have agreed certain risk sharing and claims handling arrangements in relation to these liabilities). Mis-selling liabilities which crystallise after 1 April 2031 will transfer pursuant to the Scheme and will become liabilities of Rothesay. 17. Do I need to do anything? If, having read the information available, you re satisfied with the transfer proposals you don t need to do anything further and no additional action is required on your part in relation to payments due from, or premiums payable to, Rothesay (for example, you don't need to inform your bank). If you have more than one annuity policy transferring to Rothesay, or a with-profits policy, you ll receive more than one letter. Please read all letters carefully as not all policies are impacted in the same way. If anyone else has an interest in your policy, for example if it's jointly owned, or if there are joint or contingent beneficiaries (e.g. a spouse) for an annuity, or if your policy has been assigned, please share this letter and the accompanying Questions and Answers with them and make them aware of their right to raise an objection. If you feel you may be disadvantaged by the proposed transfer, you have the right to object. If you wish to object, it would be helpful if you could let us know. You can contact us using any of the above contact details. It would help the process if you could explain the reasons for your objection when you contact us. We ll acknowledge and reply in writing to all objections we receive. We'll also submit copies of all policyholder objections to the Court which will consider them and the Scheme on 12 June

16 As a result of the legal requirements relating to the transfer of insurance business carried on in or from within Jersey and policies issued to residents of the Bailiwick of Guernsey and/or written under Guernsey law, there will be similar schemes to transfer such business in those jurisdictions. Please write to us, call us or refer to our website for more information if you think you may hold a policy affected by the scheme in Jersey or the Bailiwick of Guernsey and haven't otherwise received a separate notification about your Jersey or Bailiwick of Guernsey policy by 31 March You can if you wish choose to present your views to Court yourself. You can also choose to be represented at Court if you prefer. If you re satisfied that you understand the transfer proposals and don't have any concerns or objections then you don t need to do anything further. If you require a copy of this letter in braille, audio or large print, please contact the helpline on UK Freephone or from overseas. AGN11_S_D10446_010317_SAMPLE_RLP_453220\000002\16\8of8\ Aegon is a brand name of Scottish Equitable plc. Scottish Equitable plc, registered office: Edinburgh Park, Edinburgh EH12 9SE. Registered in Scotland (No ). Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number An Aegon company Aegon UK plc DIR /16 8