The North West Life Assurance Company of Canada - Page 9

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            Commissioners (NAIC), a voluntary association of State insurance                           
            commissioners.  NAIC publishes standard detailed forms upon which                          
            each type of insurance company reports its annual financial                                
            condition.                                                                                 
                  NAIC form 1A must be filed annually by petitioner with the                           
            State of Washington.  NAIC form 1A requires information regarding                          
            whether a U.S. branch has sufficient admissible assets (all                                
            assets of its U.S. branch other than the separate-accounts                                 
            business) over liabilities, including the statutory deposit.  The                          
            inside cover of NAIC form 1A states:                                                       
                  This Annual statement differs in some respects from                                  
                  that for a United States Company and should not be                                   
                  interpreted in the same manner.  The most important                                  
                  fact conveyed by the statement is whether the Company                                
                  has a sufficient amount of admissible assets to meet                                 
                  all known liabilities of its United States business                                  
                  including statutory deposit.  For this reason, the                                   
                  Annual statement balance sheet does not show the amount                              
                  of unassigned funds, or surplus, which are accrued from                              
                  earnings of the United States business, but rather                                   
                  total United States admissible assets and total United                               
                  States liabilities and statutory deposit.                                            


                  NAIC form 1 must be filed by domestic insurance companies                            
            with their respective State regulatory agencies.  Differences                              
            between NAIC form 1A and NAIC form 1 include:                                              
            1.    NAIC form 1A lists assets and liabilities with the assets                            
                  not necessarily equaling liabilities, capital, and surplus,                          
                  whereas NAIC form 1 includes a balance sheet;                                        
            2.    NAIC form 1A lists income and expenses, but it does not                              
                  include realized capital gains and losses;                                           





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Last modified: May 25, 2011