Member Information Statement Part 1

Part 1 Includes:

Notices of the Statutory Members’ special meeting and the public hearing.

A description of our plan to demutualize and go public.

A copy of the Plan of Conversion.

Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Dear Anthem Insurance Statutory Member: You are cordially invited to attend the special meeting of the Statutory Members of Anthem Insurance Companies, Inc. (“Anthem Insurance”) to be held on October 29, 2001, beginning at 10:00 a.m. Eastern Standard Time at our principal office, 120 Monument Circle, Indianapolis, Indiana. Statutory Members are being asked to approve our Plan of Conversion, which includes Anthem Insurance’s conversion from a mutual insurance company to a stock insurance company, and the Amended and Restated Articles of Incorporation of Anthem Insurance.

“Statutory Members” are certain customers of Anthem Insurance who have voting and other ownership rights in Anthem Insurance under our Articles of Incorporation, By-Laws and records because they hold an insurance policy, certificate, health care benefits contract or certificate of membership (including a certificate of membership issued under a guaranty policy) issued by Anthem Insurance that is in force.

“Eligible Statutory Members” are persons who were Statutory Members of Anthem Insurance on June 18, 2001, who continue to be Statutory Members on the effective date of the Plan and who have had continuous health care benefits coverage with the same company (either Anthem Insurance or its Blue Cross and Blue Shield subsidiaries in Kentucky, Ohio or Connecticut) during the period between those two dates without a break in coverage of more than one day. Under the Plan of Conversion, Eligible Statutory Members will receive shares of common stock of Anthem Insurance’s newly formed parent holding company, Anthem, Inc. (“Anthem, Inc.”)or cash in exchange for their membership interests in Anthem Insurance.

THE BOARD OF DIRECTORS OF ANTHEM INSURANCE HAS UNANIMOUSLY APPROVED THE PLAN OF CONVERSION AND RECOMMENDS THAT STATUTORY MEMBERS VOTE “FOR” THE PLAN OF CONVERSION.

On the effective date of the Plan of Conversion, Anthem, Inc. will conduct an initial public offering of its common stock. We will conduct the initial public offering in order to raise capital for our future growth, expansion and competition in the health benefits industry, and to enable us to pay cash to Eligible Statutory Members who do not receive common stock. Anthem, Inc. common stock has been approved for listing on the New York Stock Exchange, subject to official notice of issuance, under the symbol “ATH”.

THERE WILL BE NO INCREASE IN YOUR POLICY PREMIUMS OR CHANGE TO YOUR HEALTH CARE BENEFITS AS A RESULT OF THE CONVERSION.

The enclosed material contains the notice of the special meeting, the notice of a public hearing on the Plan of Conversion, the Notice of Application for U.S. Department of Labor Prohibited Transaction Exemption and Parts 1 and 2 of the Member Information Statement. Part 1 of the Member Information Statement includes information about the proposal to be voted upon by Statutory Members, including detailed information about our conversion from a mutual insurance company to a stock insurance company. Part 2 of the Member Information Statement includes business and financial information about Anthem Insurance and Anthem, Inc. You are encouraged to read this entire document carefully.

We hope that you will be able to attend the special meeting of Statutory Members. However, whether or not you plan to attend in person, please complete, sign, date and return the enclosed Proxy Card (Card 1) promptly to ensure that your vote will be represented at the meeting. If you do attend the meeting and wish to vote personally, you may revoke your proxy any time before it is exercised. Please also complete, sign and return your Taxpayer Identification Card (Card 2) and, if you prefer to receive stock in the conversion, your Stock Election Card (Card 3). Please remember that, if you were not a Statutory Member on June 18, 2001 or do not continue to be a Statutory Member on the effective date of the conversion, with continuous health care benefits coverage from the same company between those two dates, you will not be eligible to receive consideration under the Plan of Conversion.

Thank you for your ongoing support and continued interest in Anthem Insurance.

Very truly yours,

L. Ben Lytle Larry C. Glasscock Chairman President and Chief Executive Officer ANTHEM INSURANCE COMPANIES, INC. 120 Monument Circle Indianapolis, Indiana 46204

Notice of Special Meeting and Vote on the Plan of Conversion of Anthem Insurance Companies, Inc.

To the Statutory Members of Anthem Insurance Companies, Inc., an Indiana mutual insurance company (“Anthem Insurance”):

You are hereby notified of a special meeting of the Statutory Members of Anthem Insurance. “Statutory Members” are certain customers of Anthem Insurance who have voting and other ownership rights in Anthem Insurance under its Articles of Incorporation, By-Laws and records. You are a Statutory Member if you hold an insurance policy, certificate, health care benefits contract or certificate of membership (including a certificate of membership issued under a guaranty policy) issued by Anthem Insurance that is in force. The purpose of the special meeting is to consider and vote on the Plan of Conversion (the “Plan”) and the Amended and Restated Articles of Incorporation of Anthem Insurance (the “Amended Articles”). Under the Plan and the Amended Articles, Anthem Insurance will convert from a mutual insurance company to a stock insurance company pursuant to the Indiana demutualization law, Indiana Code Section 27-15-1-1 et seq. The special meeting will be held on the following date and at the following time and place:

October 29, 2001 10:00 a.m. Eastern Standard Time Anthem Insurance Companies, Inc. 120 Monument Circle Indianapolis, Indiana 46204

The proposal to adopt the Plan and the Amended Articles is described in the Member Information Statement accompanying this notice. A copy of the Plan, including a copy of the Amended Articles and summaries of the other exhibits to the Plan, are included in the Member Information Statement. This information is also available on our website at www.Anthem.com.

On June 18, 2001, the Board of Directors of Anthem Insurance unanimously approved the Plan and the Amended Articles. The Board recommends that Statutory Members vote “FOR’’ the Plan and the Amended Articles.

Ten percent of the Statutory Members eligible to vote constitutes a quorum for taking a vote at the special meeting. Once a quorum is present, the affirmative vote of at least two-thirds of all votes cast at the special meeting, in person or by proxy, is required to approve the Plan and the Amended Articles. Each Statutory Member will be entitled to cast only one vote on the proposal, regardless of the size, type or number of policies held by that Statutory Member. You are eligible to vote on the Plan and the Amended Articles if you were a Statutory Member on June 18, 2001.

You may cast your vote in person at the special meeting or by a duly appointed proxy agent. A Proxy Card for this purpose is enclosed. Instructions for voting on the proposal accompany this notice. Your Proxy Card should be marked with a vote either “FOR” or “AGAINST” the Plan. Unsigned Proxy Cards and Proxy Cards with a vote both “FOR” and “AGAINST” the Plan will not count as votes cast. Proxy cards which are signed but which do not show a vote either “FOR” or “AGAINST” the Plan will be voted “FOR” the Plan.

This is a very important transaction for Anthem Insurance and its Statutory Members. If the proposal is approved and the Plan becomes effective, all membership interests in Anthem Insurance will be extinguished and Eligible Statutory Members will be paid in the form of stock or cash. There will be no increase in your policy premiums or change to your health care benefits as a result of the conversion.

Please complete, date, sign and return the enclosed Proxy Card, whether or not you plan to attend the special meeting. You may revoke your proxy by returning a later dated proxy or by attending the special meeting and voting in person.

Mailed Proxy Cards must be received by the final vote at the special meeting, or any adjournment thereof. Please use the enclosed, pre-addressed envelope to mail your Proxy Card. The envelope is postage-paid if mailed within the United States. To request a new Proxy Card, please call our Demutualization Information Center toll- free at 1-866-299-9628, between the hours of 8:00 a.m. and 5:00 p.m. Eastern Standard Time.

Indianapolis, Indiana August 17, 2001

By Order of the Board of Directors,

Nancy L. Purcell, Corporate Secretary ANTHEM INSURANCE COMPANIES, INC. 120 Monument Circle Indianapolis, Indiana 46204

Notice of Public Hearing on the Plan of Conversion of Anthem Insurance Companies, Inc.

You are hereby notified that the Indiana Insurance Commissioner will hold a public hearing on the Plan of Conversion (the “Plan”) and the Amended and Restated Articles of Incorporation of Anthem Insurance Companies, Inc., an Indiana mutual insurance company (“Anthem Insurance”), whereby Anthem Insurance will convert from a mutual insurance company to a stock insurance company. The public hearing will commence on the following date and at the following time and place:

October 2, 2001 10:00 a.m. Eastern Standard Time The Indiana Government Conference Center Auditorium 402 West Washington Street Indianapolis, Indiana 46204

On June 18, 2001, the Board of Directors of Anthem Insurance unanimously approved the Plan and the Amended and Restated Articles of Incorporation and adopted a resolution recommending the Plan and the Amended and Restated Articles of Incorporation to Anthem Insurance’s Statutory Members. “Statutory Members” are certain customers of Anthem Insurance who have voting and other ownership rights in Anthem Insurance under Anthem Insurance’s Articles of Incorporation, By-Laws and records because they hold an insurance policy, certificate, health care benefits contract or certificate of membership (including a certificate of membership issued under a guaranty policy) issued by Anthem Insurance that is in force. Statutory Members as of June 18, 2001 are eligible to vote on the Plan and the Amended and Restated Articles of Incorporation.

The public record portion of Anthem Insurance’s Application for Approval of the Plan filed with the Indiana Insurance Commissioner may be examined at the offices of the Indiana Department of Insurance, 311 West Washington Street, Suite 300, Indianapolis, Indiana 46204, between 9:00 a.m. and 4:00 p.m., Monday through Friday, except days on which the Department is closed for business. General information about the Plan, including a copy of the Plan, is available by visiting Anthem Insurance’s website at www.Anthem.com.

The Indiana Insurance Commissioner has scheduled this public hearing on the Plan and the Amended and Restated Articles of Incorporation in order to receive comments and information to aid the Indiana Insurance Commissioner in considering and approving or disapproving Anthem Insurance’s Application for Approval of the Plan and the Amended and Restated Articles of Incorporation. The effectiveness of the Plan and the Amended and Restated Articles of Incorporation is subject to the Indiana Insurance Commissioner’s approval and the approval of Anthem Insurance’s Statutory Members.

The Indiana demutualization law requires the Indiana Insurance Commissioner to approve the Plan if she finds that (1) the amount and form of consideration to be given to the Eligible Statutory Members under the Plan is fair in the aggregate and to each member class, (2) the Plan and the Amended and Restated Articles of Incorporation comply with the Indiana demutualization law and other applicable laws, are fair, reasonable and equitable to the Eligible Statutory Members and will not prejudice the interests of Anthem Insurance’s other Statutory Members or policyholders and (3) the total consideration provided to Eligible Statutory Members upon the extinguishing of their membership interests is equal to or greater than the surplus of Anthem Insurance. The Indiana demutualization law requires the Indiana Insurance Commissioner to approve or disapprove the Plan within 30 days after the conclusion of the public hearing on the Plan. Any person wishing to make comments and/or submit information to the Indiana Insurance Commissioner regarding the Plan and the Amended and Restated Articles of Incorporation may submit written statements before or at the public hearing and may appear and testify at the public hearing.

While all those who wish to testify may do so, the Indiana Insurance Commissioner may, in order to accommodate all interested persons, limit the amount of time that any individual or group may speak. Accordingly, interested persons wishing to testify should bring copies of their presentation to the public hearing and be prepared to summarize their position in their testimony. In addition, if an interested person is unable or does not wish to attend the public hearing, he or she may submit a written statement to the Indiana Insurance Commissioner. In order for any such written statement to be included in the public hearing record, it must be received prior to the close of the public hearing.

Any person wishing to testify at the public hearing should register with Greg Thomas, Chief Deputy Commissioner of the Indiana Department of Insurance, by writing to him at the Indiana Department of Insurance, 311 West Washington Street, Suite 300, Indianapolis, Indiana 46204, or calling him at (317) 232-0143 between the hours of 9:00 a.m. and 4:00 p.m. Eastern Standard Time, on or prior to September 27, 2001, 5 days before the public hearing. Submission of written statements should also be sent to Greg Thomas at the above address by September 27, 2001, 5 days before the public hearing.

The location for the public hearing is reasonably accessible to persons with a mobility impairment.

August 17, 2001 ANTHEM INSURANCE COMPANIES, INC.

NOTICE OF APPLICATION FOR PROHIBITED TRANSACTION EXEMPTION

This notice affects Statutory Members who hold policies or certificates associated with welfare benefit plans subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). Generally, you are affected if (1) you are an employer (other than a government or church) or an employee organization that maintains an Anthem Insurance policy for the purpose of providing welfare benefits to employees, or (2) you are an employee who holds a certificate issued under a group insurance policy or health care benefits contract maintained by an employer (other than a government or church) or employee organization for the purpose of providing welfare benefits to employees.

Required Notice to Interested Persons You are hereby notified that the United States Department of Labor is considering granting an exemption from the prohibited transaction restrictions of ERISA and the Internal Revenue Code of 1986. Absent an exemption, these restrictions could otherwise apply to and prohibit a plan’s receipt of compensation in exchange for membership rights extinguished in a demutualization. The exemption under consideration is explained in greater detail in a Notice of Proposed Exemption (“Notice”) that was published in the Federal Register on August 3, 2001. If you are a person who may be affected by this exemption, you have the right to comment on the proposed exemption by October 1, 2001.

Comments should be addressed to: Office of Exemption Determinations Pension and Welfare Benefits Administration Room N-5649 U.S. Department of Labor 200 Constitution Avenue NW Washington, D.C. 20210 Attention: Application No. D-10979

The Department of Labor will make no final decision on the proposed exemption until it reviews all comments received in response to the Notice.

Obtaining Copies of the Notice and Making Comments You have the right to comment on the Department of Labor’s proposed exemption by October 1, 2001. You have until October 1, 2001 to submit your comments to the Department of Labor. A copy of the Notice has been posted on Anthem’s website at www.Anthem.com. If you wish to be sent a copy of the Notice, call our Demutualization Information Center toll-free at 1-866-299-9628. If you contact us and request a copy of the Notice, we will promptly provide you with a copy.

MEMBER INFORMATION STATEMENT PART 1 TABLE OF CONTENTS Page

Introduction ...... 1 Summary ...... 2 Our Organization Before and After the Conversion ...... 8 Comparison of the Rights of Anthem Insurance’s Statutory Members and Shareholders of Anthem, Inc. . . 9 The Special Meeting ...... 14 Date, Time, Place and Purpose ...... 14 Eligibility to Vote ...... 14 How to Vote ...... 14 Factors to Consider When Voting ...... 15 The Plan of Conversion ...... 16 Reasons for the Conversion ...... 16 Background of the Conversion ...... 16 Statutory Members ...... 17 Exchange of Membership Interests ...... 18 Holders of Policies and In Force Dates ...... 20 Consideration ...... 21 The Commission-Free Odd Lot Program ...... 24 Large Holder Sale Program Procedures and Restrictions ...... 24 The Initial Public Offering ...... 24 Other Capital Raising Transactions ...... 25 Restriction on Stock to Directors, Executive Officers and Senior Management Executives ...... 25 Stock Incentive Plan ...... 25 Option Grants to Employees ...... 26 Employee Stock Purchase Plan ...... 26 Conditions to Effectiveness of the Plan ...... 26 Amendment or Withdrawal of the Plan; Corrections ...... 27 Effectiveness of the Plan ...... 28 Tax Consequences to Eligible Statutory Members ...... 28 Tax Effect on Anthem ...... 30 Certain ERISA Considerations ...... 31 Appeal Period ...... 34

i Page

Opinions of Our Advisors ...... 35 Tax Opinion ...... 35 Opinions of Our Financial Advisor ...... 35 Actuarial Opinion ...... 36 Appendices ...... A-i Appendix 1—Anthem Insurance Companies, Inc. Plan of Conversion to a Stock Insurance Company A-1 Exhibit A-1—Summary of the Amended and Restated Articles of Incorporation of Anthem Insurance Companies, Inc...... A-21 Exhibit A-2—Amended and Restated Articles of Incorporation of Anthem Insurance Companies, Inc...... A-23 Exhibit B— Summary of the Amended and Restated By-Laws of Anthem Insurance Companies, Inc...... A-29 Exhibit C— Summary of the Articles of Incorporation of Anthem, Inc...... A-32 Exhibit D— Summary of By-Laws of Anthem, Inc...... A-35 Exhibit E— Summary of Large Holder Sale Program Procedures and Restrictions ...... A-39 Exhibit F— Summary of Actuarial Contribution Memorandum ...... A-40 Appendix 2—Tax Opinion of Ernst & Young LLP ...... A-42 Appendix 3—Goldman, Sachs & Co. Opinions ...... A-45 Appendix 4—Actuarial Opinion of Daniel J. McCarthy, FSA, MAAA; Dale S. Hagstrom, FSA, MAAA; and Robert H. Dobson, FSA, MAAA ...... A-57

The date of Part 1 of this Member Information Statement is August 17, 2001.

ii INTRODUCTION

Anthem Insurance Companies, Inc. (“Anthem Insurance”) is a health benefits company organized as a mutual insurance company under Indiana law. This Member Information Statement is being provided to the “Statutory Members” of Anthem Insurance to request their approval of our Plan of Conversion (the “Plan”) and the Amended and Restated Articles of Incorporation of Anthem Insurance. Under the Plan, Anthem Insurance will convert from a mutual insurance company to a stock insurance company and will become a wholly owned subsidiary of a newly formed stock holding company, Anthem, Inc. (“Anthem, Inc.”). “Eligible Statutory Members” will receive consideration equal in value to the fair value of Anthem Insurance at the time of the conversion in the form of Anthem, Inc. common stock or cash, in exchange for their membership interests in Anthem Insurance. The conversion of a mutual insurance company to a stock insurance company is often referred to as a ‘‘demutualization’’.

“Statutory Members” are certain customers of Anthem Insurance who have voting and other ownership rights in Anthem Insurance under our Articles of Incorporation, By-Laws and records because they hold an insurance policy, certificate, health benefits contract or certificate of membership (including a certificate of membership issued under a guaranty policy) issued by Anthem Insurance (each being referred to as a “Policy”) that is in force. You are entitled to vote on the Plan if you were a Statutory Member on June 18, 2001, the date our Board of Directors approved the Plan and adopted a resolution recommending the Plan and the Amended and Restated Articles of Incorporation to our Statutory Members.

“Eligible Statutory Members” are persons (i) who were Statutory Members on June 18, 2001, (ii) who continue to be Statutory Members on the effective date of the Plan and (iii) who have had continuous health care benefits coverage with the same company (either Anthem Insurance or its Blue Cross and Blue Shield subsidiaries in Kentucky, Ohio or Connecticut) during the period between those two dates without a break in coverage of more than one day.

Part 1 of this Member Information Statement summarizes the Plan, describes the conversion of Anthem Insurance from a mutual insurance company to a stock insurance company and describes the consideration that will be paid to Eligible Statutory Members in exchange for their membership interests. Part 2 of this Member Information Statement contains information about Anthem Insurance and its business (including financial statements), Anthem, Inc. and its business, certain considerations relevant to the ownership of the common stock of Anthem, Inc. and other matters. We urge Statutory Members to read Parts 1 and 2 of the Member Information Statement carefully.

A copy of the Plan, the Amended and Restated Articles of Incorporation and certain other exhibits to the Plan are included in Part 1 of this Member Information Statement. The public record portion of Anthem Insurance’s Application for Approval of the Plan may be examined at the Indiana Department of Insurance, 311 West Washington Street, Suite 300, Indianapolis, Indiana 46204, between 9:00 a.m. and 4:00 p.m., Eastern Standard Time, Monday through Friday, except days on which the Department is closed for business.

Please visit our website at www.Anthem.com or call our Demutualization Information Center at 1-866-299-9628 (toll-free) between the hours of 8:00 a.m. and 5:00 p.m. Eastern Standard Time if you have any questions about any of the accompanying materials.

1 SUMMARY

This summary highlights information contained elsewhere in this Member Information Statement. As a result, it does not contain all of the information that you should consider before casting your vote on the Plan of Conversion. You should read the entire Member Information Statement carefully, including the “Risk Factors” section and the consolidated financial statements and the notes to those statements. References to the term “Anthem Insurance” refer to Anthem Insurance Companies, Inc., an Indiana insurance company. References to the term “Anthem” refer to Anthem Insurance and its direct and indirect subsidiaries before the conversion, and to Anthem, Inc., a newly-formed Indiana holding company, and its direct and indirect subsidiaries, including Anthem Insurance, after the conversion, as the context requires. References to the terms “we,” “our,” or “us,” refer to Anthem, before and after the conversion.

Anthem Our Company We are one of the nation’s largest health benefits companies, serving over seven million customers primarily in Indiana, Kentucky, Ohio, Connecticut, New Hampshire, Maine, Colorado and Nevada. We hold the leading market position in seven of these eight states and own the exclusive right to market our products and services using the Blue Cross® Blue Shield®, or BCBS, names and marks in all eight states under license agreements with the Blue Cross Blue Shield Association, or BCBSA, an association of independent BCBS plans. We seek to be a leader in our industry by offering a broad selection of flexible and competitively priced health benefits products. Also, we recently announced our agreement to purchase Blue Cross and Blue Shield of Kansas, Inc. This acquisition will not result in the addition of any new Statutory Members or affect our conversion in any way. Business Strategy Our strategic objective is to be among the best and biggest in our industry with the size and scale to deliver the best product value with the best people. The Conversion Description of the Conversion The ‘‘Conversion’’ is the process by which Anthem Insurance will convert from a mutual insurance company to a stock insurance company. If the Conversion becomes effective, Eligible Statutory Members will receive consideration in the form of Anthem, Inc. common stock or cash in exchange for the extinguishing of their membership interests. As part of the Conversion and in connection with the Plan, Anthem Insurance will become a wholly owned subsidiary of Anthem, Inc., which will become a publicly traded stock company. Anthem Insurance will then have access to capital markets through Anthem, Inc.

2 An “Eligible Statutory Member” is a person or entity who was a Statutory Member of Anthem Insurance on June 18, 2001, who continues to be a Statutory Member of Anthem Insurance on the effective date of the Conversion (the “Effective Date”), and who has had continuous health care benefits coverage with the same company (either Anthem Insurance or its Blue Cross and Blue Shield subsidiaries in Kentucky, Ohio or Connecticut) during the period between those two dates without a break in coverage of more than one day. Reasons for the Conversion The principal reason for the Conversion is to increase our financial flexibility through improved access to capital. This will enhance our ability to expand existing business, develop new business opportunities, enhance our competitive position in the health benefits industry and continue to offer high quality products and services to our customers. In addition, the Conversion allows us to distribute the fair value of Anthem Insurance to our Eligible Statutory Members in the form of common stock or cash, which would not be possible if we remained a mutual insurance company. Major Features of the Conversion ‰ On the Effective Date, Eligible Statutory Members will become entitled to receive the fair value of Anthem Insurance at the time of the Conversion in the form of Anthem, Inc. common stock or cash, in exchange for their membership interests. All membership interests in Anthem Insurance will be extinguished. ‰ All Eligible Statutory Members will be allocated a number of shares of Anthem, Inc. common stock. Your estimated allocation is shown on your Member Record Card (Card 4). This allocation is an estimate only, and the actual number of allocated shares could be more or less than the number shown. Eligible Statutory Members that are to receive consideration in the form of common stock, will receive notification of their ownership of such common stock. Eligible Statutory Members that are to receive consideration in the form of cash will receive a check in an amount equal to the number of shares of common stock allocated to them multiplied by the initial public offering price of such shares, or if the average closing price of Anthem, Inc. common stock for the first 20 consecutive days of trading is greater than 110% of the initial public offering price, an increased amount to reflect the increased value of the stock, up to an additional ten percent of the public offering price. We will use commercially reasonable efforts to send you either notification of your ownership of such common stock or your check not

3 later than six weeks after the Effective Date, unless a longer period is authorized by the Indiana Insurance Commissioner. For more information, see “The Plan of Conversion—Consideration.”

‰ There will be no increase in your policy premiums or change to your health care benefits as a result of the Conversion. ‰ On and after the Effective Date, Anthem Insurance will become a wholly owned subsidiary of Anthem, Inc., and will continue to be known as Anthem Insurance Companies, Inc. ‰ On the Effective Date, we will conduct an initial public offering of shares of Anthem, Inc. common stock. On the Effective Date or thereafter, we may also raise additional capital through other capital raising transactions. For more information, see “The Plan of Conversion—The Initial Public Offering” and “—Other Capital Raising Transactions.” ‰ Subject to the receipt of necessary regulatory approvals, on and after the Effective Date, we will cease issuing or renewing our guaranty policies that were issued in connection with and following our 1993 merger with Southeastern Mutual Insurance Company, our 1995 merger with Community Mutual Insurance Company and our 1997 merger with Blue Cross & Blue Shield of Connecticut, Inc. As part of these mergers, guaranty policies were issued by Anthem Insurance to the members of the underlying mutual companies and to certain customers of the successor insurers of those merged mutual companies in order to provide them with membership interests in Anthem Insurance. If the Conversion becomes effective, all membership interests in Anthem Insurance will be extinguished and Eligible Statutory Members will be paid in common stock or cash. At the same time that we cease to issue or renew guaranty policies for a subsidiary, we will issue a corporate guaranty to that subsidiary to replace the financial guarantee provided by the guaranty policies, the form of which will be subject to the approval or non-disapproval of the state insurance regulators of Indiana and Kentucky, Ohio or Connecticut, as applicable. ‰ We expect the Effective Date to be in the fourth quarter of 2001. Conditions to the Effectiveness of the Conversion Conditions for the Plan to be effective include: ‰ The Plan and the Amended and Restated Articles of Incorporation must be approved by at least two- thirds of the votes cast by all Statutory Members

4 voting in person or by proxy at the special meeting. In order for the vote at the special meeting to be valid, a quorum of 10% of Statutory Members eligible to vote must be present. ‰ The Plan and Anthem Insurance’s Amended and Restated Articles of Incorporation must be approved by the Indiana Insurance Commissioner. ‰ Other governmental approvals must also be obtained. ‰ We must receive an opinion of our tax advisor regarding the federal income tax consequences of the Plan in order for the Plan to be effective. The tax opinion will be based upon the accuracy of certain representations and undertakings by Anthem Insurance. For more information see “The Plan of Conversion—Tax Opinion.” ‰ The initial public offering of shares of Anthem, Inc. common stock must occur. Organizational Structure When the Conversion and the initial public offering of shares of Anthem, Inc. common stock are complete, Anthem Insurance will be a stock insurance company and Anthem, Inc. will be a publicly traded stock company that will own 100% of the stock of Anthem Insurance. The common stock of Anthem, Inc. has been approved for listing on the New York Stock Exchange, subject to official notice of issuance, under the symbol “ATH.” A summary of our corporate structure before and after the Conversion is shown on Charts A and B following this summary. Opinions of our Advisors Tax Opinion Under the Plan, we must receive an opinion of our tax advisor regarding the federal income tax consequences of the Plan in order for the Plan to be effective. The tax opinion will be based upon the accuracy of certain representations and undertakings by Anthem Insurance. As required by the Plan, we have received a tax opinion from Ernst & Young LLP, our tax advisor. The Plan will not become effective unless this opinion is reconfirmed as valid under the law and regulations in effect on the Effective Date. For more information see “The Plan of Conversion—Tax Opinion.” Opinions of Our Financial Advisor In connection with its approval and recommendation of the Plan, Anthem Insurance’s Board of Directors considered the opinions of our financial advisor, Goldman, Sachs & Co., dated June 18, 2001. A detailed description of these opinions can be found at “The Plan of Conversion—Opinions of Our Financial Advisor” in Part 1 of this Member Information Statement. The full text of these opinions are included in Part 1 of this Member Information Statement as

5 Appendix 3. We encourage you to read these opinions in their entirety, including the assumptions made, matters considered and limitations on the review undertaken by Goldman Sachs. These opinions must be reaffirmed as of the Effective Date. The opinions were solely for the information and assistance of Anthem Insurance’s Board of Directors and are not a recommendation to Anthem Insurance’s Statutory Members as to how to vote on the Plan.

Actuarial Opinion We retained Daniel J. McCarthy, FSA, MAAA, Dale S. Hagstrom, FSA, MAAA, and Robert H. Dobson, FSA, MAAA, independent consulting actuaries associated with Milliman USA, Inc., an independent actuarial consulting firm, to advise us in connection with the actuarial matters involved in the Plan and the payment of consideration to Eligible Statutory Members. The opinion of Messrs. McCarthy, Hagstrom and Dobson, dated June 18, 2001, states, in reliance upon the matters described in the opinion, that the principles, assumptions, methodologies and formulas provided in the Plan to allocate consideration among Eligible Statutory Members in exchange for the extinguishing of their membership interests are reasonable and appropriate and that the resulting allocation of consideration among Eligible Statutory Members is fair and equitable. A copy of the opinion is attached as Appendix 4 to Part 1 of this Member Information Statement. This opinion must be reaffirmed as of the Effective Date.

Comparison of Rights of Anthem Insurance’s ‰ Membership interests in Anthem Insurance generally Statutory Members and Rights of Shareholders of consist of the right to vote on matters submitted to a Anthem, Inc. vote of Statutory Members, including the election of directors of the mutual insurance company, and the right to participate in any distribution of cash, stock or other consideration in the event of a conversion of Anthem Insurance to a stock insurance company under the Indiana demutualization law or a dissolution of Anthem Insurance. If the Conversion becomes effective, all membership interests in Anthem Insurance will be extinguished and, in exchange, Eligible Statutory Members will receive common stock or cash. ‰ Eligible Statutory Members receiving shares of Anthem, Inc. common stock in the Conversion will become shareholders of Anthem, Inc, similar to investors who purchase shares in the public market. A shareholder of Anthem, Inc. will generally have the right to vote on matters submitted to a vote of shareholders, including the election of directors, and in the event of a dissolution, the right to receive the

6 remaining assets of the company after satisfaction of the claims of creditors and other liabilities. ‰ The right of Statutory Members to vote at annual or special meetings of Anthem Insurance will cease because Anthem Insurance will become a stock insurance company that is wholly owned by Anthem, Inc. ‰ There will be no increase in your policy premiums or change to your health care benefits as a result of the Conversion. ‰ For more information concerning the rights of shareholders of Anthem, Inc., see “Comparison of the Rights of Anthem Insurance’s Statutory Members and Shareholders of Anthem, Inc.” herein, and “Description of Capital Stock” in Part 2 of this Member Information Statement. Risk Factors In considering your vote, you should carefully consider the risks described in “Risk Factors” beginning on page 7 of Part 2 of this Member Information Statement. Recommendation of Anthem Insurance’s Board On June 18, 2001, Anthem Insurance’s Board of of Directors Directors unanimously approved the Plan, and Anthem Insurance’s Amended and Restated Articles of Incorporation. Anthem Insurance’s Board of Directors recommends that you vote “FOR” the Plan.

7 8 COMPARISON OF THE RIGHTS OF ANTHEM INSURANCE’S STATUTORY MEMBERS AND SHAREHOLDERS OF ANTHEM, INC.

At the effective time of the Conversion, Eligible Statutory Members who receive and retain Anthem, Inc. common stock will become shareholders of Anthem, Inc., with the rights and privileges of shareholders as determined by Anthem, Inc.’s Articles of Incorporation, By-Laws and the Indiana Business Corporation Law (“IBCL”). The following is a summary comparison of the rights of Statutory Members of Anthem Insurance and the rights of shareholders of Anthem, Inc. This summary is qualified in its entirety by the complete text of the Articles of Incorporation and By-Laws of Anthem Insurance and Anthem, Inc.

EVENTS ANTHEM INSURANCE MEMBERSHIP ANTHEM, INC. SHAREHOLDERS Rights In the Event of Under Indiana law, in the event a Under the IBCL, in the event a Dissolution mutual insurance company such as corporation such as Anthem, Inc. is Anthem Insurance is dissolved or dissolved, shareholders have a right converts to a stock insurance to receive the remaining assets of company, Statutory Members the corporation after satisfaction of have a right to receive cash, stock the claims of creditors and other or other consideration after liabilities. satisfaction of the claims of creditors and other liabilities.

Amendment of Articles of Amendments must be proposed by Amendments must be proposed by Incorporation the Board of Directors in the Board of Directors and accordance with Indiana law. generally require the affirmative Amendments, other than those vote, at a meeting of the which the Board of Directors may shareholders, of more shares in adopt without Statutory Member favor than those opposed, but approval, are submitted to a vote of specified amendments require the the Statutory Members at the affirmative vote of at least seventy- annual meeting or special meeting five percent (75%) of the votes of the Statutory Members. entitled to be cast by the holders of the outstanding shares of all classes of voting stock and, in certain instances, also of an independent majority of shareholders.

Amendment of By-Laws Only the Board of Directors may The Board of Directors has the amend the By-Laws. It may do so exclusive power to amend at any regular or special meeting of provisions of the By-Laws by the the Board by a vote of at least two- affirmative vote of a majority of thirds of the entire Board. the entire number of directors at the time, except as expressly provided by the IBCL.

9 EVENTS ANTHEM INSURANCE MEMBERSHIP ANTHEM, INC. SHAREHOLDERS Right to Call Special Meeting Special meetings may be called by Special meetings may be called the Board of Directors, the only by the Board of Directors, the Chairman of the Board or the Chief Chairman of the Board, the Chief Executive Officer, and must be Executive Officer or the President. called by the Board of Directors if the Secretary receives written demand for a special meeting from at least twenty-five percent of the Statutory Members entitled to vote on any issue proposed to be considered at the special meeting.

Classified Board of Directors The directors are divided into 3 The directors are divided into 3 classes. classes.

Removal of Directors A director may be removed only A director may be removed at a for cause, and only at a meeting of meeting of the shareholders or the Board of Directors or Statutory directors called for that purpose. Members called for that purpose. Removal by shareholders requires Removal by Statutory Members the affirmative vote of the holders requires the affirmative vote of the of outstanding shares representing Statutory Members representing at at least two-thirds of the votes least a majority of all the votes entitled to be cast at an election of entitled to be cast at an election of directors. Removal by directors directors. Removal by directors requires the affirmative vote of requires the affirmative vote of at both a majority of the entire least two-thirds of all directors. number of directors and a majority of the number of directors who qualify as “continuing” directors under the Articles of Incorporation.

Right to Present New Business Members have the right to present Shareholders are allowed to present and Director Nominations new business and make a new business (at any annual nomination for directors at a meeting and at a special meeting to meeting of Statutory Members. the extent that the meeting was called for a specified purpose) and nominate directors.

10 EVENTS ANTHEM INSURANCE MEMBERSHIP ANTHEM, INC. SHAREHOLDERS Advance Notice of New Business Notice of a Statutory Member’s Notice of a shareholder’s intent to and Director Nominations intent to present new business present new business or nominate a before the meeting or to nominate a director at an annual meeting must director must be delivered to the be delivered to Anthem, Inc. at Secretary at least 30 days prior to least 90 and not more than 120 the date of the meeting at which the days prior to the first anniversary new business is to be brought or the of the prior year’s annual meeting directors are to be elected, and with date, or if at a special meeting, not respect to special meetings, within earlier than the 120th day prior to ten business days after the date on the special meeting and not later which notice of the special meeting than the close of business on the is first mailed to Statutory later of the 90th day prior to the Members. special meeting or the tenth day following the day on which the public announcement of the date of the special meeting is made.

Limitation on Director Liability Under Indiana law and Anthem Under Anthem, Inc.’s Articles of Insurance’s Articles of Incorporation and the IBCL, a Incorporation, a director is not director is not liable for any action liable for any action taken as a taken as a director or any failure to director or any failure to take take action unless the director has action unless: (1) the director has failed to perform his/her duties as a failed to perform his/her duties as a director (1) in good faith, (2) with director in good faith, with the care the care of an ordinarily prudent of an ordinarily prudent person in a person in a like position or (3) fails like position or fails to perform his/ to perform his/her duties in a her duties in a manner the director manner the director believes to be believes to be in the best interest of in the best interest of the the corporation or (2) the director corporation; and the director acts or acts in a manner which involves fails to act in a manner which willful misconduct or recklessness. involves willful misconduct or recklessness.

Indemnification Each director or officer of Anthem Each director or officer of Anthem, Insurance has the right to be Inc. has the right to be indemnified indemnified for all claims and for all claims and liabilities liabilities incurred by acting in his incurred by acting in his or her or her capacity as a director or capacity as a director or officer and officer and Anthem Insurance shall Anthem, Inc. shall reimburse each reimburse each director and officer director and officer for any legal for any legal expenses reasonably expenses reasonably incurred by incurred by such action, such action, specifically including specifically including any liabilities any liabilities imposed on a director imposed on a director or officer or officer under any of the under any of the provisions of the provisions of the Employee’s Employee’s Retirement Income Retirement Income Security Act of Security Act of 1974. 1974. All indemnification shall be Indemnification shall be provided to the fullest extent provided by the to the fullest extent provided by IBCL. Indiana insurance law.

11 EVENTS ANTHEM INSURANCE MEMBERSHIP ANTHEM, INC. SHAREHOLDERS Right to Information There are no provisions in the Under the IBCL and the By-Laws, Articles of Incorporation or By- upon five days’ advance written Laws, or under the Indiana notice, a shareholder is entitled to insurance law that provide inspect and copy any of the Statutory Members with a right to following records: information. ‰ the Articles of Incorporation, ‰ the By-Laws, ‰ Board resolutions creating classes or series of shares and fixing their relative rights, preferences and limitations, if such shares are outstanding, ‰ minutes of all shareholders’ meetings and records of all action taken without a meeting, for the past three years, ‰ all written communications to shareholders for the past three years, ‰ a list of the names and business addresses of Anthem, Inc.’s current directors and officers, and ‰ Anthem, Inc.’s most recent annual report, as delivered to the Secretary of State. A shareholder who makes a demand in good faith and for a proper purpose; with reasonable particularity of his or her purpose; and where the desired records are directly connected with the stated purpose, shall be entitled to inspect and copy ‰ excerpts from minutes of any Board meeting, records of any actions of a Board committee taken while acting in place of the Board, minutes of any shareholder meeting and records of action taken by the shareholders or the Board without a meeting, to the extent not provided above, ‰ accounting records of Anthem, Inc., and ‰ the record of shareholders of Anthem, Inc.

12 EVENTS ANTHEM INSURANCE MEMBERSHIP ANTHEM, INC. SHAREHOLDERS Right to Information After fixing a record date for a (continued) meeting, Anthem, Inc. shall prepare a list of the names of all shareholders who are entitled to notice of a shareholders’ meeting. Such list shall be made available for inspection by any shareholder entitled to vote at the meeting beginning five business days before the date of the meeting and continuing through the meeting.

Voting Each Statutory Member is entitled The number of votes of a to one vote regardless of the size, shareholder is determined by the type or number of policies held. number of shares held by a Every Statutory Member is entitled shareholder (with one vote per to vote in person or by proxy. share). Every holder of shares of Anthem, Inc. common stock entitled to vote may vote in person or by proxy.

13 THE SPECIAL MEETING

Date, Time, Place and Purpose This Member Information Statement is being furnished to Statutory Members in connection with the solicitation of proxies by our Board of Directors for use at the special meeting of Statutory Members to be held at our principal executive office, 120 Monument Circle, Indianapolis, Indiana 46204 on October 29, 2001, beginning at 10:00 a.m. Eastern Standard Time, and at any adjournment thereof.

At the special meeting, Statutory Members will be asked to approve the Plan, which includes the conversion of Anthem Insurance from a mutual insurance company to a stock insurance company, and the Amended and Restated Articles of Incorporation. Our Board of Directors has unanimously determined that consummating the Plan is in the best interests of Anthem Insurance, our Eligible Statutory Members and our other Statutory Members and policyholders, is fair, reasonable and equitable to the Eligible Statutory Members and will not prejudice the interests of our other Statutory Members and policyholders. Accordingly, Anthem Insurance’s Board of Directors unanimously approved the Plan and recommends that Statutory Members vote “FOR” the Plan.

Eligibility to Vote You have the right to vote on the Plan if you were a Statutory Member on June 18, 2001. “Statutory Members” are certain customers of Anthem Insurance who have voting and other ownership rights in Anthem Insurance under our Articles of Incorporation, By-Laws and records because they hold a Policy issued by Anthem Insurance that is in force. The Statutory Member(s) identified on the Proxy Card (Card 1) is (are) eligible to vote on the Plan.

If you are eligible to vote, you are entitled to one vote regardless of the size, type or number of Policies you hold. Two or more persons who qualify as Statutory Members under a single Policy will be deemed one Statutory Member for purposes of voting, and collectively will be entitled to one vote.

How to Vote Voting by Proxy. If you wish to vote by proxy, you should complete and sign your Proxy Card (Card 1) and return it by mail to our Demutualization Information Center, Anthem Insurance Companies, Inc., c/o Equiserve Trust Company, P.O. Box 8909, Edison, New Jersey 08818-8909. Please also complete and return your Taxpayer Identification Card (Card 2) and, if you prefer to receive stock in the Conversion, your Stock Election Card (Card 3). A postage pre-paid envelope is enclosed for your use. Mailed Proxy Cards must be received by the final vote at the special meeting, or any adjournment thereof, in order to be counted. Your Proxy Card should be marked with a vote either “FOR” or “AGAINST” the Plan. Unsigned Proxy Cards and Proxy Cards showing a vote both “FOR” and “AGAINST” the Plan will not count and will not be regarded as votes cast. Proxy cards which are signed, but which do not show a vote either “FOR” or “AGAINST” the Plan will be voted “FOR” the Plan. To request a new Proxy Card, please call our Demutualization Information Center toll-free at 1-866-299-9628, between the hours of 8:00 a.m. and 5:00 p.m. Eastern Standard Time.

Voting in Person. Statutory Members who want to cast their vote in person may do so at the special meeting to be held at our principal executive office, 120 Monument Circle, Indianapolis, Indiana 46204, beginning at 10:00 a.m. Eastern Standard Time on October 29, 2001. You may revoke your mailed proxy by returning a later dated proxy or by attending the special meeting and voting in person.

14 Factors to Consider When Voting When deciding how to vote on the proposal to approve the Plan, some of the factors you may want to consider include: ‰ There will be no increase in your policy premiums or change to your health care benefits as a result of the Conversion. ‰ If the Plan becomes effective, all membership interests in Anthem Insurance will be extinguished and, in exchange, Eligible Statutory Members will receive consideration in the form of Anthem, Inc. common stock or cash. While we will use our best commercially reasonable efforts to distribute cash to a substantial number of Eligible Statutory Members who prefer cash, there will be a limit to the amount of cash that can be distributed, and it is likely that many Eligible Statutory Members who wish to receive cash may receive Anthem, Inc. common stock instead. ‰ After the initial public offering, Eligible Statutory Members who receive Anthem, Inc. common stock in the Conversion will have a liquid security that can be sold in the public market. However, notices regarding the final number of shares registered in the names of such Eligible Statutory Members are expected to be mailed not later than six weeks after the Effective Date and, as a practical matter, the shares cannot be sold until after that notice is received. ‰ Under the Plan, a small number of Eligible Statutory Members (certain large group customers) who receive and continue to hold 30,000 or more shares of Anthem, Inc. common stock in exchange for their membership interests will be restricted from selling, transferring, pledging, hypothecating or otherwise assigning their shares for 180 days following the Effective Date, except for transfers in accordance with the Large Holder Sale Program, any transfer that occurs by operation of law or transfers with the written consent of Anthem, Inc. For more information, see “The Plan of Conversion—Large Holder Sale Program Procedures and Restrictions.” ‰ Approval of the Plan will provide Anthem Insurance with greater financial flexibility with access to equity capital through Anthem, Inc. Anthem Insurance’s Board of Directors believes this will enhance our ability to grow our existing business through increased enrollment and acquisitions, develop new business opportunities and improve service to our customers. ‰ If you receive and retain Anthem, Inc. common stock in connection with the Conversion, the percentage of your ownership interest in Anthem, Inc. will be reduced, because Anthem, Inc. will issue additional shares in the initial public offering and from time to time in the future. ‰ There will be additional costs of doing business as a public company. As a mutual company, we currently do not bear these costs. These costs include costs associated with making periodic public reports, such as quarterly and annual reports that public companies are required to file with the Securities and Exchange Commission, and providing shareholder services, including paying transfer agent fees, printing and distributing annual reports, proxy statements and other routine mailings to shareholders. ‰ For a discussion of additional factors, see “Risk Factors” beginning on page 7 of Part 2 of this Member Information Statement.

ON JUNE 18, 2001, ANTHEM INSURANCE’S BOARD OF DIRECTORS UNANIMOUSLY APPROVED THE PLAN. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE PLAN.

15 THE PLAN OF CONVERSION

Reasons for the Conversion The principal reason for the proposed Conversion is to increase Anthem Insurance’s financial flexibility through improved access to capital. In addition, the Conversion will enable our Eligible Statutory Members to receive payment of consideration equal to the fair value of Anthem Insurance.

Background of the Conversion Over a period of many years, we have examined capital, strategic and structural alternatives to a mutual insurance company structure. Most recently, in the Spring of 2000, the Board of Directors had an extensive discussion and presentations concerning the current mutual corporate structure and potential risks to the company, including: (i) deterioration of competitive position; (ii) moderate potential for increased revenues in certain existing markets; (iii) certain limitations on the ability to grow by acquisition without access to capital or the ability to issue stock as an acquisition currency; (iv) limitations on access to capital, which is likely to be needed as a result of rapid changes in the health benefits environment relating to industry consolidation, technology, and increased regulation; and (v) disadvantages in attracting and retaining the best management personnel. Alternative structures to address these risks were also discussed at the meeting.

Alternatives that have been discussed by management and the Board of Directors have included: ‰ forming a downstream public holding company, including through a mutual insurance holding company restructuring (which would allow for some limited capital raising through the sale of the holding company stock, but may create potential conflicts between the ownership interests of policyholders and the ownership interests and expectations of stockholders); ‰ selling Anthem Insurance in a sponsored demutualization, where Anthem Insurance would demutualize and be acquired by another company (which would involve a loss of independence for the company and other risks to the continued improvement of service to, and other interests of, customers, as well as risks to the benefits that Anthem Insurance and its subsidiaries bring to the communities they serve); ‰ merging with another significant mutual insurer (which would require locating a suitable affiliation candidate, and which may also involve a loss of independence for the company and the other risks noted above, as well as merely postponing rather than resolving the needs for access to capital and financial flexibility); ‰ conducting a full demutualization and remaining independent (which would maximize access to capital and financial flexibility and would allow for the payment of the fair value of the company to Eligible Statutory Members); ‰ continuing as a mutual insurance company; and ‰ converting to a charitable not-for-profit organization (which might open the door for certain specific acquisition or affiliation transactions, but would not enhance access to capital and may violate the ownership interests of the Statutory Members of Anthem Insurance).

Based on its evaluations, Anthem Insurance has concluded that there are significant risks associated with continuing as a mutual insurance company and that a change in corporate form from a mutual insurance company will best serve the interests of Anthem Insurance and its Statutory Members and other customers. Moreover, based on its analysis of changes in the health benefits industry, Anthem Insurance has concluded that increasing the company’s financial flexibility through improved access to capital is critical to serving the best interests of Anthem Insurance and its Statutory Members and other customers.

The Conversion will improve Anthem Insurance’s access to capital because Anthem, Inc. will be able to obtain equity capital from sources that are available to a stock company, but not to a mutual insurance company.

16 Anthem Insurance, as a mutual insurance company, cannot issue or sell capital stock. Anthem, Inc., as a stock corporation organized under the Indiana Business Corporation Law, will be able to issue and sell stock to the public and will have other access to public and private capital markets that will give it far greater financial flexibility than is available to Anthem Insurance. The ability to raise capital in an initial public offering is an example of this enhanced financial flexibility. Our Board of Directors believes that increased financial flexibility and access to capital will allow Anthem, Inc. and its subsidiaries, including Anthem Insurance, to expand existing business, develop new business opportunities, enhance their competitive position in the health benefits industry, continue to improve service to their customers (including the Eligible Statutory Members and other Statutory Members and policyholders), and better assure our continued financial strength and stability. The ability to provide equity based incentive compensation plans and similar programs (such as the Stock Incentive Plan described below) in the same manner as many of Anthem Insurance’s competitors will enhance our ability to attract and retain qualified management and other personnel whose dedication and service will benefit our customers (including the Eligible Statutory Members and other Statutory Members and policyholders). Finally, through the Conversion, Anthem Insurance’s Eligible Statutory Members will receive the fair value of Anthem Insurance as of the Effective Date (before giving effect to new capital raised in the initial public offering or other capital raising transactions) in exchange for their otherwise illiquid membership interests. Thus, Eligible Statutory Members will realize real economic value from their membership interests that is not available to them so long as Anthem Insurance remains a mutual insurance company. At the same time that Eligible Statutory Members and our other Statutory Members and policyholders benefit from the Conversion, there will be no increase in policy premiums or change to your health care benefits as a result of the Conversion. Based on the foregoing and on other evaluations and study, Anthem Insurance and our Board of Directors have concluded that conversion from a mutual insurance company to a stock insurance company, together with the public stock offering by a newly created holding company, would be in the best interests of Anthem Insurance and its Statutory Members and other customers. On June 18, 2001, our Board of Directors unanimously approved the Plan of Conversion and recommended the Plan to Anthem Insurance’s Statutory Members. The Board recommends that you vote “FOR” the Plan.

Statutory Members Under the Indiana demutualization law, membership in a mutual insurance company is determined by the articles of incorporation, by-laws and records of the company. Anthem Insurance and its subsidiaries have over seven million customers. Only approximately one million of those customers are Statutory Members of Anthem Insurance under our Articles of Incorporation, By-Laws and records. Under the Indiana demutualization law, only Statutory Members of Anthem Insurance may vote on the Conversion and receive consideration when the Conversion becomes effective. If you received this Member Information Statement in the mail with the four card set as part of our member mailing that began on August 17, 2001, then our records indicate that you are a Statutory Member under the Policy(ies) listed on your Member Record Card (Card 4). In general, under our Articles of Incorporation, By-Laws and records, the following customers of Anthem are not Statutory Members: ‰ Customers of certain subsidiaries of Anthem Insurance are not Statutory Members. For example, customers of Anthem Health Plans of New Hampshire, Inc., Rocky Mountain Hospital and Medical Service, Inc. and Anthem Health Plans of Maine, Inc. are not Statutory Members. These three non-profit companies were acquired by Anthem Insurance for aggregate consideration of approximately $373 million and, unlike mutual companies, were not owned by their members or customers. The net proceeds paid by Anthem Insurance for these companies were used to establish charitable foundations.

17 ‰ Customers under self-funded, Administrative Services Only, or ASO, arrangements are generally not Statutory Members. ‰ Individual certificate holders under group Policies issued to groups by our Kentucky, Ohio and Connecticut subsidiaries prior to our mergers with those former mutual companies are not Statutory Members (the group policyholders are Statutory Members). For more information, see “The Plan of Conversion – Exchange of Membership Interests – Guaranty Policies.” ‰ Group policyholders in Indiana are not Statutory Members (the individual certificate holders under those group Policies generally are Statutory Members). ‰ Group policyholders that became customers of our Kentucky, Ohio and Connecticut subsidiaries after our mergers with those former mutual companies are not Statutory Members (the individual certificate holders under those group Policies are Statutory Members). For more information, see “The Plan of Conversion – Exchange of Membership Interests – Guaranty Policies.” ‰ Customers participating in the Federal Employee Program, or FEP, are not Statutory Members (except for FEP customers in Ohio who are covered under our Health Maintenance Plan). ‰ Medicaid customers are not Statutory Members. ‰ The trustee of certain trusts established for the administrative convenience of an Anthem company are not Statutory Members (the participants in those trusts are Statutory Members).

These are meant to be general guidelines only as to which of our customers are and are not Statutory Members. Any dispute as to the identity of the holder of a Policy or the right to vote or receive consideration will be determined in accordance with the provisions in the Plan of Conversion, the Indiana demutualization law or such other procedures as may be acceptable to the Indiana Insurance Commissioner.

Exchange of Membership Interests Holders of certain Policies issued by Anthem Insurance have certain rights as Statutory Members of Anthem Insurance. For purposes of demutualization these rights are called “membership interests.” Membership interests consist principally of the right to vote on matters submitted to a vote of Statutory Members (including the election of directors) and the right to participate in any distribution of cash, stock or other consideration in the event of (1) a conversion of Anthem Insurance to a stock insurance company under the Indiana demutualization law or (2) a dissolution of Anthem Insurance. If the Plan becomes effective, all membership interests in Anthem Insurance will be extinguished and Statutory Members will no longer have any voting or other ownership rights with respect to Anthem Insurance. In exchange for the extinguishing of their membership interests, Eligible Statutory Members will receive consideration in the form of Anthem, Inc. common stock or cash. For more information, see “—Consideration.”

Changes in Rights to Vote All matters submitted to a vote of Anthem, Inc.’s shareholders, including the election of directors, will be voted on by its shareholders, who will consist of Eligible Statutory Members who receive and retain Anthem, Inc. common stock under the Plan and investors who buy Anthem, Inc. common stock in the public market from time to time, including investors who buy Anthem, Inc. common stock in the initial public offering. After the Conversion, Anthem, Inc. will be a publicly traded holding company, and each shareholder of Anthem, Inc. will be entitled to one vote for each share of Anthem, Inc. common stock held by that shareholder.

Changes in Rights in Liquidation Liquidation is a legal concept that refers to a particular type of distribution of corporate assets that occurs after the termination of the corporate existence of a company. In the unlikely event that Anthem Insurance, if it were to remain a mutual company, were liquidated, Statutory Members would be entitled to share in the

18 distribution of any assets remaining after payment of Anthem Insurance’s contractual obligations under our outstanding insurance and health-related policies and contracts and our other non-insurance liabilities. After the Conversion, in the unlikely event that Anthem Insurance, as a stock company, were liquidated, any assets remaining after Anthem Insurance’s payment of its insurance and non-insurance liabilities would be distributed to Anthem, Inc. as the sole shareholder of Anthem Insurance.

After the Conversion, in the event of a dissolution of Anthem, Inc., shareholders of Anthem, Inc. would share in the distribution of any assets remaining after payment of Anthem, Inc.’s contractual and other liabilities. These shareholders would include Eligible Statutory Members who receive shares of common stock in the Conversion and continue to hold those shares. Eligible Statutory Members who receive cash in the Conversion would not be shareholders of Anthem, Inc. and would not share in any such distribution, unless they otherwise acquired or purchased Anthem, Inc. common stock.

Changes in Guaranty Policies Anthem Insurance issued guaranty policies in connection with our 1993 merger with Southeastern Mutual Insurance Company, our 1995 merger with Community Mutual Insurance Company and our 1997 merger with Blue Cross & Blue Shield of Connecticut, Inc. Those guaranty policies (and certificates of membership issued in connection with those guaranty policies) have been issued to protect and preserve the membership interests of the members of the acquired mutual companies and of certain customers of the successor insurers to those acquired mutual companies. In addition, under those guaranty policies Anthem Insurance directly guarantees the health care benefits provided under the related insurance or other contracts of (i) Anthem Health Plans of Kentucky, Inc. d/b/a Anthem Blue Cross and Blue Shield, a Kentucky corporation (“Anthem-Kentucky”), (ii) Community Insurance Company d/b/a Anthem Blue Cross and Blue Shield, an Ohio stock insurance company (“Anthem- Ohio”), and (iii) Anthem Health Plans, Inc. d/b/a Anthem Blue Cross Blue Shield, a Connecticut stock insurance company (“Anthem-Connecticut”).

If the Conversion becomes effective and Eligible Statutory Members are paid in common stock or cash in exchange for their membership interests, we will have completed our obligations with respect to membership interests arising out of the 1993, 1995 and 1997 mergers. Accordingly, if Statutory Members vote to approve the Plan and the Plan becomes effective, all membership interests arising under those guaranty policies will be extinguished along with all other membership interests in Anthem Insurance in exchange for consideration in the form of Anthem, Inc. common stock or cash. Eligible Statutory Members holding guaranty policies will receive the applicable value of their guaranty policy as part of their consideration.

Subject to the receipt of all necessary regulatory approvals, on and after the Effective Date, Anthem Insurance will cease issuing or renewing those guaranty policies. At the same time that we cease to issue or renew guaranty policies for a subsidiary, we will issue a corporate guaranty to that subsidiary to replace the financial guarantee previously provided by the guaranty policies. Generally, under the corporate guaranty, Anthem Insurance will guarantee payment of all sums due for health benefits under the health insurance policies and other health benefits contracts (subject to the terms and conditions of those policies and contracts) of Anthem-Kentucky, Anthem-Ohio, and Anthem-Connecticut, as applicable. In the event of the insolvency of Anthem Insurance, a corporate guaranty will have a lower priority in payment than the guaranty policies would have and will not entitle the former guaranty policy holder to any applicable guaranty fund coverage. The form of the corporate guaranty will be subject to the approval (or non-disapproval) of the state insurance regulator of Indiana, Kentucky, Ohio or Connecticut, as applicable. Once issued, those corporate guaranties may not be withdrawn or materially modified except pursuant to their terms and with the approval (or non-disapproval) of the state insurance regulator of Indiana, Kentucky, Ohio or Connecticut, as applicable. If any necessary regulatory approval is not received by the Effective Date, we will continue to issue the applicable guaranty policies with their financial guarantee provisions, but without provisions providing any membership interests, until the necessary regulatory approvals are received.

19 It is important to remember that the Conversion is a change from one form of corporate organization to another. It is not a liquidation. Anthem Insurance will remain in business under the same name after it converts to a stock insurance company. THERE WILL BE NO INCREASE IN YOUR POLICY PREMIUMS OR CHANGE TO YOUR HEALTH CARE BENEFITS AS A RESULT OF THE CONVERSION.

Holders of Policies and In Force Dates You have the right to vote on the Plan if you were a Statutory Member as of June 18, 2001, which is defined as the holder of a Policy that was in force on June 18, 2001. You will be eligible to receive consideration under the Plan as an Eligible Statutory Member if: ‰ You were a Statutory Member and the holder on June 18, 2001 of a Policy (including a guaranty policy) issued by Anthem Insurance that was in force on June 18, 2001 and on the Effective Date (which is currently expected to be in the fourth quarter of 2001); and ‰ You have had continuous health care benefits coverage with the same company (either Anthem Insurance or its Blue Cross and Blue Shield subsidiaries in Kentucky, Ohio or Connecticut) during the period between those two dates without a break in coverage of more than one day.

Determination of Holders The holder of any Policy for purposes of voting and receiving consideration under the Plan is determined by Anthem Insurance’s records. Your Member Record Card (Card 4) identifies your current Anthem Insurance Policy (or Policies) and the holder of that Policy. The following rules apply in determining the holder of a Policy: ‰ In general, the holder of a Policy that is an individual insurance policy or health care benefits contract will be the person specified in such Policy as the policy or contract holder, unless no policy or contract holder is so specified, in which case the holder of the Policy will be deemed to be the person in whose name the application for the Policy was made. ‰ The holder of a Policy that is a group insurance policy or group health care benefits contract will be the person or persons specified in such Policy as the policy or contract holder, unless no policy or contract holder is so specified, in which case the holder is the person (other than Anthem Insurance) on whose behalf the policy or contract was executed (this applies to holders of group insurance policies or health care benefits contracts issued in Kentucky, Ohio and Connecticut whose membership interests in Southeastern Mutual Insurance Company, Community Mutual Insurance Company or Blue Cross & Blue Shield of Connecticut, Inc., respectively, were preserved through the receipt of guaranty policies issued by Anthem Insurance and who have had continuous membership interests in Anthem Insurance since the merger of their respective insurance company into Anthem Insurance). ‰ The holder of a Policy that is a certificate of coverage or participation issued under a group insurance policy or health benefits contract issued to an administrative trust (certain trusts established by Community Mutual Insurance Company or its successor, Community Insurance Company, for administrative convenience) is (i) with respect to such a Policy issued prior to our 1995 merger with Community Mutual Insurance Company, the employer, association or individual to whom the certificate of coverage was issued under the Policy or (ii) with respect to such a Policy issued after our 1995 merger with Community Mutual Insurance Company, (A) in the case of a certificate of coverage issued to an employer or association, the participants to whom reimbursement benefits under the certificate of coverage are payable (or on whose behalf payments may be made to providers) or (B) in the case of a certificate of coverage issued to an individual, that individual. The trustee of any such trust shall not be a Statutory Member or holder of a Policy. ‰ The holder of a Policy that is a certificate of coverage issued under a group insurance agreement or health care benefits contract is the person specified in the certificate of coverage as the holder thereof, unless no

20 holder or certificate holder is so specified, in which case the holder is deemed to be the person to whom reimbursement benefits under the certificate of coverage are payable (or on whose behalf payment may be made to providers) (this applies to holders of all certificates under group insurance policies or health care benefits contracts issued in Indiana and to the holders of certificates under group insurance policies or health care benefits contracts in Kentucky, Ohio and Connecticut issued after the mergers of Southeastern Mutual Insurance Company, Community Mutual Insurance Company and Blue Cross & Blue Shield of Connecticut, Inc., respectively, into Anthem Insurance). ‰ If a person holds a Policy with one or more other persons, they will constitute a single holder with respect to the Policy, and any consideration allocated under the Plan will be distributed jointly to or on behalf of such persons. ‰ Except as otherwise described above, the identity of the holder of a Policy will be determined by Anthem Insurance without giving effect to any interest of any other person in the Policy. ‰ In any other situation, or if application of the above-stated rules is unclear, the holder of a Policy, as reflected on the records of Anthem Insurance and determined in good faith by Anthem Insurance, will be presumed to be the holder of the Policy for purposes of the Plan. Except for administrative errors, Anthem Insurance will not be required to examine or consider any other facts or circumstances. ‰ The mailing address of a holder for purposes of the Plan will be the holder’s last known address as shown on the records of Anthem Insurance. ‰ Any dispute as to the identity of the holder of a Policy or the right to vote or receive consideration will be determined in accordance with the above-stated procedures, the Indiana demutualization law or such other procedures as may be acceptable to the Indiana Insurance Commissioner.

In Force Whether or not a Policy is in force as of any date is determined by Anthem Insurance’s records. A Policy will be deemed to be in force on a given date if the effective date of the Policy occurs on or prior to that date, the required premium has been received by Anthem Insurance and the Policy has not expired or otherwise been surrendered or terminated. A Policy is deemed to remain in force during any applicable grace period for non- payment of premium as administered by Anthem Insurance.

With respect to a Policy that is a certificate of coverage or participation issued under a group insurance policy or health care benefits contract issued to an administrative trust, the Policy will be deemed to be in force as of any date if, as of such date, the holder has requested and been approved or deemed approved for participation in the administrative trust or coverage under the group policy is otherwise in effect, as shown on Anthem Insurance’s records.

Any dispute as to whether a Policy is in force will be determined in accordance with the above-stated procedures or such other procedures as may be acceptable to the Indiana Insurance Commissioner.

Consideration If the Plan becomes effective, Eligible Statutory Members will receive consideration in the form of Anthem, Inc. common stock or cash.

Eligible Statutory Members You will be an Eligible Statutory Member if you meet both of the following requirements: ‰ You were a Statutory Member and the holder on June 18, 2001, of a Policy issued by Anthem Insurance that was in force, and you continue to be a Statutory Member and the holder of an in force Policy on the Effective Date (which is currently expected to be in the fourth quarter of 2001); and

21 ‰ You have had continuous health care benefits coverage from the same company (either Anthem Insurance or one of its subsidiaries in Kentucky, Ohio or Connecticut) during the period between those two dates without a break in coverage of more than one day.

If you are a Statutory Member but you are not the holder of an in force Policy on the Effective Date or you have not had continuous health care benefits coverage from the same company without a break in coverage of more than one day during the period between June 18, 2001 and the Effective Date, you will not be eligible to receive any consideration.

Allocation of Shares The aggregate consideration to be distributed to Eligible Statutory Members in exchange for their membership interests will be equal to the value of 100 million shares of Anthem, Inc. common stock (subject to possible adjustment as provided in Section 12.9 of the Plan). If you are an Eligible Statutory Member, the amount of your individual consideration will be based on an allocation to you of a number of shares of Anthem, Inc. common stock. Each Eligible Statutory Member will be allocated a minimum of 21 shares of Anthem, Inc. common stock as a fixed component of consideration, plus a variable component of consideration equal to the portion, if any, of the aggregate variable component of the consideration allocated with respect to such Eligible Statutory Member. The method of allocation of the variable component of the consideration is specified in Section 7.3 of the Plan and in the Actuarial Contribution Memorandum. For more information, see Exhibit F to the Plan. The method of allocation, in general, determines the contributions made in the past and anticipated to be made in the future to Anthem Insurance’s statutory surplus for each Eligible Statutory Member relative to all other Eligible Statutory Members. The variable component allocated to each Eligible Statutory Member will be zero or a positive number. The number of shares allocated to each Eligible Statutory Member will be rounded to the nearest whole share. For more information about the allocation of shares among Eligible Statutory Members, see Article VII of the Plan, a copy of which is included in Part 1 of this Member Information Statement as Appendix 1.

Your Member Record Card (Card 4) identifies the current Policy or Policies on which your consideration will be based and the estimated number of shares of Anthem, Inc. common stock allocated to you if the Plan becomes effective and you are an Eligible Statutory Member. This number is only an estimate. The actual number of shares that will be allocated to you on the Effective Date may vary from the number shown. If you believe that the information shown on this card is incorrect, please call 1-866-299-9628 (toll free).

Form of Consideration Upon the Conversion, every Eligible Statutory Member will be entitled to the shares of Anthem, Inc. common stock allocated to them, except for Eligible Statutory Members who must receive cash because (i) the Eligible Statutory Member’s mailing address as shown on the records of Anthem Insurance is outside of the United States, (ii) the Eligible Statutory Member’s receipt of common stock would, in the opinion of our counsel, fail to comply with the securities registration or other requirements or exemptions of the applicable securities laws of that state, or (iii) the requirements of registering the common stock in an Eligible Statutory Member’s state of domicile would be excessively burdensome or expensive or would be likely to be subject to unreasonable delays.

Expression of Preference to Receive Common Stock or Cash You may express your preference to receive Anthem, Inc. common stock as your consideration by signing and returning your Stock Election Card (Card 3). If, however, you prefer to receive cash as your consideration, do not sign or return your Stock Election Card (Card 3). We will assume that Statutory Members who do not sign and return their Stock Election Card (Card 3) prefer cash as their consideration.

22 We will use our best commercially reasonable efforts to distribute cash to a substantial number of Eligible Statutory Members who prefer cash. Please note, however, that there will be a limited amount of cash available for distribution, and it is likely that many Eligible Statutory Members who prefer cash may receive common stock instead. After distributing cash to Eligible Statutory Members who must receive cash under the Plan, in the likely event that there is insufficient cash to distribute to all Eligible Statutory Members who prefer to receive cash, then cash will be distributed first to those Eligible Statutory Members with the fewest number of allocated shares, in increasing order, until all available cash is distributed. If cash is to be distributed to two or more Eligible Statutory Members with the same number of allocated shares and there is insufficient cash available to pay all such Eligible Statutory Members, the Eligible Statutory Member with the earliest date of coverage will receive cash first.

Once all of the available cash has been distributed to Eligible Statutory Members who are to receive cash under the Plan, all other Eligible Statutory Members will receive shares of Anthem, Inc. common stock.

In deciding whether to express a preference for stock, you should consider the relative benefits of owning Anthem, Inc. common stock or cash. The benefits of stock ownership generally include the possibility of an increase in the market value of Anthem, Inc. common stock. Anthem, Inc. common stock ownership also involves, however, the risks that the value of Anthem, Inc. common stock may decline and that additional stock issuances will reduce a shareholder’s percentage ownership interest in Anthem, Inc. The initial public offering price of our common stock will be based upon numerous factors and may not be indicative of the market price of our common stock after the initial public offering. For more information, see “Risk Factors” beginning on page 7 of Part 2 of this Member Information Statement.

For information regarding the different tax consequences that may apply to you if you receive common stock or cash, see “—Tax Consequences To Eligible Statutory Members” below.

Amount of Cash Payment If you are to receive cash under the Plan, the check to be mailed to you will be in an amount equal to the number of shares of Anthem, Inc. common stock that have been allocated to you, multiplied by (i) the price of Anthem, Inc. common stock offered to the public in the initial public offering or (ii) if the average of the closing prices of the common stock for the 20 consecutive trading days beginning with the Effective Date exceeds 110% of the initial public offering price, the sum of the initial public offering price plus the lesser of (A) the amount by which such average closing price exceeds 110% of the initial public offering price or (B) 10% of the initial public offering price. The amount of the check mailed to you will be net of any withholding tax required by law.

Payment of Consideration If you are to receive cash under the Plan, Anthem, Inc. will use commercially reasonable efforts to send you a check, net of any withholding tax required by law, not later than six weeks after the Effective Date (or a longer period approved by the Indiana Insurance Commissioner).

If you are to receive shares of Anthem, Inc. common stock, your shares will initially be issued to you in book-entry form (i.e., without stock certificates). Your ownership of Anthem, Inc. common stock will be entered on the records of Anthem, Inc. and we will mail you a notice showing the number of shares you own. You will thereafter be able to request a stock certificate representing your shares or, subject to certain limitations for a small number of Eligible Statutory Members (certain large group customers) that receive 30,000 or more shares, request to transfer the book-entry to your own brokerage account by writing to Equiserve Trust Company, P.O. Box 8909, Edison, New Jersey 08818-8909, which will be Anthem, Inc.’s stock transfer agent. The stock transfer agent will mail a certificate to you promptly following your request. For information regarding the tax consequences of owning and selling Anthem, Inc. common stock, see “—Tax Consequences to Eligible Statutory Members—General Discussion” and “—Eligible Statutory Members Receiving Anthem, Inc. Common Stock.”

23 The Commission-Free Odd Lot Program In order to benefit those Eligible Statutory Members who receive fewer than 100 shares of common stock, we will establish a commission-free program that will begin after 180 days following the Effective Date and before the first anniversary of the Effective Date. The commission-free program will continue for three months or for such longer period of time as the Board of Directors of Anthem, Inc. may determine to be appropriate and in the best interest of Anthem, Inc. and its shareholders. Under this program, each Eligible Statutory Member who receives and continues to hold 99 or fewer shares of common stock will be entitled to sell at prevailing market prices all, but not less than all, of the shares of common stock received by such shareholder, without paying brokerage commissions or administrative or similar expenses. As a part of the program, each Eligible Statutory Member who receives and continues to hold 99 or fewer shares of common stock will also be entitled to purchase at prevailing market prices additional shares to round-up their holdings to 100 shares, without paying brokerage commissions or other administrative or similar expenses. Anthem, Inc. will establish administrative procedures for the operation of this commission-free program. These administrative procedures may include procedures whereby shares of common stock are offered to Anthem, Inc. for repurchase at prevailing market prices when, during any particular day of the program, the number of shares requested to be sold exceeds the number of shares requested to be purchased pursuant to round-up requests.

This commission-free program will be conducted under an exception from the registration requirements of the Securities Act of 1933 and will otherwise comply with all applicable securities and other laws. With the consent of the Indiana Insurance Commissioner, upon a showing of good cause by Anthem, Inc., the terms, procedures and provisions of this program may be modified, revised or limited, or the program may be delayed or suspended. Any sale of shares under the commission-free program will be subject to applicable tax laws. You should consult your tax advisor to determine the tax consequences of this program in your particular circumstances.

Large Holder Sale Program Procedures and Restrictions Under the Plan, a small number of Eligible Statutory Members (certain large group customers) who receive and continue to hold 30,000 or more shares of Anthem, Inc. common stock in exchange for their membership interests will be restricted from selling, transferring, pledging, hypothecating or otherwise assigning their shares for 180 days following the Effective Date, except for transfers in accordance with the Large Holder Sale Program, any transfer that occurs by operation of law or transfers with the written consent of Anthem, Inc. For more information about the Large Holder Sale Program Procedures and Restrictions, see Exhibit E to the Plan.

After the expiration of such 180-day period, those large group Eligible Statutory Members will be free to sell their Anthem, Inc. common stock in the public market.

The Initial Public Offering The principal reason for the Conversion is to increase our financial flexibility through improved access to capital, which will enhance our ability to expand existing business, develop new business opportunities, enhance our competitive position in the health benefits industry and continue to improve service to our customers.

In order to raise capital in the public equity markets, Anthem, Inc. will, subject to compliance with securities laws and other requirements, sell shares of Anthem, Inc. common stock to the public at an initial public offering price of between $25 and $45. Anthem, Inc. plans to raise between $924 million and $1,067.4 million in equity capital from the public markets by selling Anthem, Inc. common stock in the initial public offering at an assumed initial public offering price of $35 per share. The equity capital raised in the initial public offering will be used for general business purposes on behalf of Anthem and payment of cash to Eligible Statutory Members in the Conversion. There will be a limit on the amount of cash available for distribution to Eligible Statutory Members, however, and it is likely that many Eligible Statutory Members who prefer to receive cash as their

24 consideration may receive shares of common stock instead. The Conversion will be subject to the Indiana Insurance Commissioner’s concurrence that the terms of the initial public offering are fair, reasonable and equitable to the Eligible Statutory Members. For more information, see “Summary—The Initial Public Offering” in Part 2 of this Member Information Statement.

Other Capital Raising Transactions In addition to the initial public offering, Anthem, Inc. may also raise capital or obtain funds substantially concurrently with the initial public offering through one or more of the following other capital raising transactions: ‰ a public offering or private placement of mandatorily convertible securities or trust preferred securities or similar instruments; ‰ a public offering or private placement of convertible or non-convertible preferred securities or similar instruments; and ‰ a public offering or private placement of debt securities, commercial paper issuances or bank or other borrowings.

The material terms of the securities to be offered in any proposed other capital raising transactions to be conducted substantially concurrently with the initial public offering will be provided to the Indiana Insurance Commissioner for review not less than 30 days prior to the earlier of the distribution of any preliminary prospectus or preliminary offering memorandum, or commencement of the roadshow, or similar activity relating to any other capital raising transaction. The Conversion will be subject to the Indiana Insurance Commissioner’s concurrence that the terms of any such other capital raising transactions are fair, reasonable and equitable to the Eligible Statutory Members.

Restriction on Stock to Directors, Executive Officers and Senior Management Executives Under the Plan, Anthem, Inc., Anthem Insurance and all of their subsidiaries will be prohibited from making any grant of common stock or options to purchase common stock to any director, executive officer or member of a specified group of senior management executives (approximately 50 in number) until the expiration of six months after the Effective Date. Thereafter, the exercise price per share of any options to purchase common stock granted to any such person will be not less than 100% of the fair market value of common stock on the date of the grant of such option.

Stock Incentive Plan We have a 2001 Stock Incentive Plan (the ‘‘Stock Plan’’), the purposes of which are to promote the interests of Anthem, Inc. and its shareholders and to further align the interests of our employees with our shareholders. Directors, executives and employees, as selected by the Compensation Committee, will participate in the Stock Plan. The Compensation Committee will administer the Stock Plan and will have complete discretion to determine whether to grant incentive awards, the types of incentive awards to grant and any requirements and restrictions relating to incentive awards. The Stock Plan is an omnibus plan, which allows for the grant of stock options, restricted stock, stock appreciation rights, performance stock and performance awards.

The Stock Plan reserves for issuance 5,000,000 shares of our common stock for incentive awards to employees and non-employee directors, plus an additional 2,000,000 shares solely for issuance under grants of stock options that may be made to substantially all of our employees (and for issuance under similar grants that may be made to new employees). If any grant is for any reason canceled, terminated or otherwise settled without the issuance of some of or all of the shares of common stock subject to the grant, such shares will be available for future grants. For a period of six months following the Effective Date, we may not make any grants under the Stock Plan to our directors or any executive who participates in our Long Term Incentive Plan. For more information, see “Management—Stock Incentive Plan” in Part 2 of this Member Information Statement.

25 Option Grants to Employees The Compensation Committee intends to grant, under the Stock Plan, stock options to purchase 100 shares of common stock to each of the approximately 15,000 employees of Anthem Insurance and its subsidiaries (other than the approximately 50 executives that are subject to the restrictions of Section 12.5 of the Plan), effective on the first day that Anthem, Inc. common stock trades on the New York Stock Exchange. See, “Restriction on Stock to Directors, Executive Officers and Senior Management Executives” above. Each of the options will have an exercise price equal to the price at which the common stock is offered to the public in the initial public offering and will generally become fully exercisable two years after their effective date. The Compensation Committee may, following the Conversion and the initial public offering, grant similar stock options to new employees of Anthem Insurance or its subsidiaries. The exercise price of any such options would be not less than 100% of the fair market value of the common stock on the date of grant. For more information, see “Management—Stock Incentive Plan” in Part 2 of this Member Information Statement.

Employee Stock Purchase Plan The Employee Stock Purchase Plan (the “Stock Purchase Plan”) is intended to comply with Internal Revenue Code §423 and to provide a means by which to encourage and assist employees in acquiring a stock ownership interest in Anthem, Inc. We anticipate implementing the Stock Purchase Plan by mid 2002. The Stock Purchase Plan is administered by the Compensation Committee, and the Compensation Committee will have complete discretion to interpret and administer the Stock Purchase Plan and the rights granted under it. All employees of Anthem are eligible to participate, as long as such employee’s customary employment is more than 20 hours per week, more than five months in a calendar year, and the employee dos not own stock totaling 5% or more of the voting power or value of Anthem, Inc. No employee will be permitted to purchase more than $25,000 worth of stock in any calendar year. The Stock Purchase Plan reserves for issuance and purchase by employees 3,000,000 shares of stock.

Employees become participants by electing payroll deductions from 1% to 15% of gross compensation. Payroll deductions are accumulated during each quarter and applied toward the purchase of stock on the last trading day of each quarter. Once purchased, the stock is accumulated in the employee’s investment account. The purchase price per share equals the lower of (i) 85% of the fair market value of a share of our common stock on the first trading day of the quarter, or (ii) 85% of the fair market value of a share of our common stock on the last trading day of the quarter. For more information, see “Management—Employee Stock Purchase Plan” in Part 2 of this Member Information Statement.

Conditions to Effectiveness of the Plan In order for the Plan to become effective, the following approvals and conditions, among others, must be obtained and/or satisfied:

Approval by Statutory Members One of the conditions for the Plan and the Amended and Restated Articles of Incorporation of Anthem Insurance to become effective is that they must be approved by a vote of Anthem Insurance’s Statutory Members.

Under the By-Laws of Anthem Insurance in effect as of the date of this Member Information Statement, ten percent of the Statutory Members constitutes a “quorum” for purposes of voting. In other words, approximately 100,000 Statutory Members must be present at the special meeting, in person or by proxy, in order for the results of the vote to be valid. In order to deliver a valid proxy, you should complete, sign, date and return the Proxy Card (Card 1) enclosed with this Member Information Statement, and return it to us by the final vote at the special meeting, or any adjournment thereof. No other proxy, including a standing proxy previously given to Anthem Insurance, will be considered valid for purposes of this vote. Once a quorum is present, at least two- thirds of the votes validly cast by Statutory Members must be in favor of the Plan in order for the Plan to be approved by Anthem Insurance’s Statutory Members.

26 You are eligible to vote on the proposal to approve the Plan and the Amended and Restated Articles of Incorporation if you were the holder of a Policy that was in force on June 18, 2001. For more information about these requirements, see “—Holders of Policies and In Force Dates.” If you are eligible to vote, you are entitled to one vote regardless of the size, type or number of Policies you hold.

How to Vote. If you wish to vote by proxy, your signed and completed Proxy Card (Card 1) should be returned by mail to our Demutualization Information Center, Anthem Insurance Companies, Inc., c/o Equiserve Trust Company, P.O. Box 8909, Edison, New Jersey 08818-8909. A postage pre-paid envelope is enclosed for your use. Mailed Proxy Cards must be received at the above address by the final vote at the special meeting, or any adjournment thereof, in order to be counted. Statutory Members who want to cast their votes in person may do so at the special meeting to be held at the principal executive office of Anthem, 120 Monument Circle, Indianapolis, Indiana 46204, beginning at 10:00 a.m. Eastern Standard Time on October 29, 2001.

Please mark your Proxy Card (Card 1) with a vote either “FOR” or “AGAINST” the Plan. Unsigned Proxy Cards and Proxy Cards showing a vote both for and against the proposals will not count and will not be regarded as votes cast. Proxy cards that are signed, but that do not show a vote either “FOR” or “AGAINST” the Plan, will be voted “FOR” the Plan. To request a new Proxy Card, please call our Demutualization Information Center toll- free at 1-866-299-9628.

On June 18, 2001, the Board of Directors of Anthem Insurance unanimously approved the Plan and Anthem Insurance’s Amended and Restated Articles of Incorporation, and recommended the Plan and the Amended and Restated Articles of Incorporation to Anthem Insurance’s Statutory Members. Anthem Insurance’s Board of Directors recommends that you vote “FOR” the Plan.

Approval by the Indiana Insurance Commissioner In order for the Conversion to become effective, the Plan and Anthem Insurance’s Amended and Restated Articles of Incorporation must be approved by the Indiana Insurance Commissioner.

The Indiana demutualization law requires the Indiana Insurance Commissioner to approve the Plan and Anthem Insurance’s Amended and Restated Articles of Incorporation if she finds that: ‰ The amount and form of consideration to be given to the Eligible Statutory Members under the Plan is fair in the aggregate and to each member class; ‰ The Plan complies with the Indiana demutualization law and other applicable laws, is fair, reasonable and equitable to the Eligible Statutory Members and will not prejudice the interests of Anthem Insurance’s other Statutory Members or policyholders; and ‰ The total consideration provided to Eligible Statutory Members upon extinguishing their membership interests is equal to or greater than the surplus of Anthem Insurance.

The Indiana demutualization law requires the Indiana Insurance Commissioner to approve or disapprove the Plan and Anthem Insurance’s Amended and Restated Articles of Incorporation within 30 days after the conclusion of the public hearing on the Plan of Conversion.

The public hearing on the Plan of Conversion will be held at the Indiana Government Conference Center, Auditorium, 402 West Washington Street, Indianapolis, Indiana 46204, beginning at 10:00 a.m. Eastern Standard Time on October 2, 2001.

Amendment or Withdrawal of the Plan; Corrections The Plan may be modified, amended, withdrawn or terminated only in a manner consistent with the provisions of the Indiana demutualization law and by action of a majority of Anthem Insurance’s Board of

27 Directors. After the Plan has been approved by Statutory Members, no modification, amendment, withdrawal or termination of the Plan will require further approval by Statutory Members, except as required by the Board of Directors of Anthem Insurance, the Indiana Insurance Commissioner or applicable law.

Additionally, until the Effective Date and after submission to the Indiana Insurance Commissioner, Anthem Insurance may make certain modifications, corrections of errors or omissions and clarifications to the Plan as may be necessary, or as may be required by the Indiana Insurance Commissioner after the public hearing as a condition of approval of the Plan. No such correction or modification will require further approval by Statutory Members, except as required by the Board of Directors of Anthem Insurance or the Indiana Insurance Commissioner.

Effectiveness of the Plan If the conditions described above in “—Conditions To Effectiveness Of The Plan” are met, the Plan will go into effect. The Plan provides that the Effective Date must occur within twelve months after the order of the Indiana Insurance Commissioner approving the Plan. The Effective Date will occur upon the date and time of approval of Anthem Insurance’s Amended and Restated Articles of Incorporation by the Indiana Secretary of State, unless a later date and time are specified in the Amended and Restated Articles of Incorporation, in which case the Plan and those articles will become effective at that later date and time. Management currently anticipates that the Plan will become effective in the fourth quarter of 2001.

If the Plan does not become effective for any reason, Anthem Insurance will remain a mutual insurance company, the interests of our Statutory Members will remain unchanged and no consideration will be paid to Eligible Statutory Members.

Tax Consequences to Eligible Statutory Members This section discusses generally what Anthem believes, based on an opinion of Ernst & Young LLP, our tax advisor, are the principal United States federal income tax consequences under current law for Eligible Statutory Members receiving consideration under the Plan. This section does not address how the tax rules affect all of the possible types of Eligible Statutory Members, some of whom may be subject to special rules not discussed here. You should consult your tax advisor to determine the federal, state, local and any applicable foreign tax consequences of the Plan in your particular circumstances, including the effects of any changes in tax laws or regulations after the date of this Member Information Statement.

Taxpayer Identification Number. It is important that you complete, sign and return the Taxpayer Identification Card (Card 2) accompanying your Proxy Card (Card 1). For individuals, your taxpayer identification number is your social security number. If you fail to complete, sign and return this card, you may be subject to a $50 IRS penalty, and Anthem Insurance or Anthem, Inc., as the case may be, could be required to withhold for federal income taxes up to 30.5% of any cash payment, including any future dividends on Anthem, Inc. common stock, you would otherwise receive. This withholding is not an additional tax, and any amount withheld may be claimed on your federal income tax return as a credit against your federal income tax liability for the year. Detailed instructions for completing the Taxpayer Identification Card are included with this Member Information Statement.

Eligible Statutory Members Receiving Anthem, Inc. Common Stock. You will not be taxed on the receipt of Anthem, Inc. common stock under the Plan. You will, in general, have a tax basis of zero in the common stock. Except as otherwise described herein, if you later sell or otherwise dispose of your Anthem, Inc. common stock, you will generally be taxed on the full amount of the cash received from that sale or other disposition. The gain will generally be taxed as capital gain, and will be long-term capital gain if your holding period for your Anthem, Inc. common stock at the time of sale, determined as discussed below under “—Holding Period,” is more than 12 months.

28 Eligible Statutory Members Who Receive Cash Under the Plan. Except as otherwise described herein, if you receive cash under the Plan, the full amount of the cash you receive will generally be taxed in the year it is received. The payment will generally be taxed as capital gain, and will be long-term capital gain if your holding period, determined as discussed below under “—Holding Period,” is more than 12 months. Under certain circumstances in which you actually or constructively continue to own Anthem, Inc. common stock, however, the cash received may be taxed as ordinary income. In addition, in the event that you receive cash under the Plan in an amount that exceeds $150,000 in a year other than the year in which the Conversion is effective, an additional federal income tax may be imposed. Because the taxation of any cash payment will depend upon your unique circumstances, you should consult your tax advisor. Individuals recognizing capital gain should report the amount of the cash received under the Plan as gain from “Anthem Insurance Companies, Inc. Membership/demutualization” on Schedule D of IRS Form 1040. Anthem will report the cash payment to the IRS as required by law.

Holding Period. Your status as an Eligible Statutory Member requires that you have continuously been a Statutory Member with health care benefits coverage issued by the same company (or such predecessor company from which its business was assumed in a merger) without a break in coverage of more than one day since the date Anthem Insurance’s Board of Directors approved the Plan. Generally, you begin calculating your holding period for Anthem, Inc. common stock starting from the date you first became a Statutory Member. If there is any uncertainty, you should consult your tax advisor.

Foreign Taxpayers. If you are a nonresident alien individual, a foreign corporation, a foreign partnership, or an estate or trust that in either case is not subject to United States federal income tax on a net income basis on income or gain from common stock, you will not be taxed on the receipt of Anthem, Inc. common stock under the Plan. Any cash you receive under the Plan will generally be free from United States federal income taxes unless, in the case of an individual, you are physically present in the United States for at least 183 days during the taxable year in which the cash is received and certain other conditions apply, or you hold your Policy in connection with the conduct of a U.S. trade or business (and the cash is attributable to a permanent establishment you maintain in the United States, if that is required by an applicable income tax treaty). Anthem Insurance or Anthem, Inc., as the case may be, will not have to withhold any tax from the payment to you if you provide satisfactory evidence of your foreign status by returning an exemption certificate on the appropriate IRS Form W-8 (which may be obtained from the IRS or from our Demutualization Information Center). You should consult your tax advisor for special rules that may apply including the possibility of a refund or credit from the IRS for any amounts withheld.

Taxation of Trusts Receiving Consideration under the Plan. If you are an employer with a Policy used to provide welfare benefits (for example, group health insurance benefits) in connection with an ERISA plan, you may direct that a trust receive the consideration provided for under the Plan of Conversion. A trust may also be an Eligible Statutory Member by owning a Policy associated with an ERISA plan. The tax and reporting requirements imposed on the trust will vary depending on whether it is a tax-exempt or taxable trust. The following discussion describes the federal income tax requirements applicable to trusts receiving and holding Anthem, Inc. common stock. You should consult your tax advisors for more detailed information regarding the requirements of federal tax law and the application of state law to the trust.

Tax-exempt Trusts. A qualifying voluntary employees’ beneficiary association (a “VEBA”) is exempt from federal income tax under Section 501(c)(9) of the Code. As a tax-exempt trust, a VEBA generally will not be subject to federal income tax on the receipt of Anthem, Inc. common stock, the receipt of dividends with respect to the common stock, the receipt of cash, or the receipt of proceeds on the sale or exchange of the common stock, except to the extent that the receipts represent unrelated business taxable income (as determined for United States federal income tax purposes). In general, a VEBA will not have unrelated business taxable income unless it has gross income (excluding dues, fees, charges or similar amounts paid by members) after taking into account deductions allowable to VEBAs under the Code. To be recognized as a tax-exempt trust, a VEBA must make an application to the Internal Revenue Service and must comply with certain other requirements, including the requirement that benefits not be provided in a manner that discriminates in favor of

29 highly compensated employees. Additional rules may apply if a VEBA is used to provide benefits to the employer’s retirees. You should consult your tax advisor if a VEBA will receive consideration under the Plan of Conversion.

Taxable Trusts. If a trust for an ERISA plan does not qualify as a VEBA, it will be a taxable trust for federal income tax purposes. The receipt of cash or stock under the Plan would not be subject to federal income tax. A taxable trust would, however, be subject to federal income tax on the sale or other disposition of any common stock received under the Plan in the manner described under “—Eligible Statutory Members Receiving Anthem, Inc. Common Stock” above or upon any dividends received from Anthem, Inc., but it would be entitled to a deduction to the extent the cash or sale proceeds are applied to provide health insurance coverage or other qualifying benefits to beneficiaries of the ERISA plan. You should consult your tax advisor if a taxable trust will receive consideration under the Plan.

Welfare Benefit Fund Rules. Regardless of whether a trust is taxable or tax-exempt, it will be a “welfare benefit fund” under both federal income tax laws and ERISA. Additional tax and reporting requirements apply to welfare benefits funds, including prohibitions on the distribution of fund assets to the employer or use of the fund assets to provide benefits that discriminate in favor of certain highly compensated employees. If an employer provides a disqualified benefit through a welfare benefit fund, the employer may be subject to a special excise tax equal to 100% of the prohibited expenditure. You should consult your tax advisor regarding the operation of a trust in compliance with the welfare benefit fund rules.

Tax Effect on Anthem The following sections are a summary of the material federal income tax consequences to Anthem in connection with the Plan, as set forth in the opinion of Ernst & Young LLP, Anthem’s tax advisor.

Demutualization of Anthem Insurance The demutualization of Anthem Insurance from a mutual insurance company to a stock insurance company will be tax-free under the Code, and the holding company formation whereby Anthem Insurance will become a wholly-owned subsidiary of Anthem, Inc. will be tax-free to both Anthem Insurance and Anthem, Inc. under the Code.

Distribution of Cash to Eligible Statutory Members Neither Anthem Insurance nor Anthem, Inc. will recognize gain or loss on Anthem, Inc.’s issuance of cash to those Eligible Statutory Members who are to receive cash under the Plan.

Treatment of Anthem, Inc. Anthem, Inc. will not recognize gain or loss on its receipt of cash in the initial public offering.

Special Tax Rules Applicable to Blue Cross and Blue Shield Organizations Under current law, Anthem currently enjoys certain federal income tax benefits as described below, including special tax deductions, as a Blue Cross or Blue Shield organization that was in existence on August 16, 1986. These special tax benefits continue for as long as Anthem does not undergo a “material change” in operations or structure. Current law does not address whether a demutualization transaction will constitute a material change in the operations or structure of a Blue Cross or Blue Shield organization and, therefore, it is not clear what effect the Plan will have on Anthem’s ability to continue to qualify for such tax benefits.

As an existing Blue Cross and Blue Shield organization, Anthem is entitled to take advantage of special tax provisions. These provisions include a deduction based on the amount by which 25% of our claims and expenses

30 exceed our adjusted surplus (the “Section 833(b) Deduction”) and a deduction for increases to our unearned premium reserve that is higher than the deduction allowable to most insurance companies. Because of the current level of adjusted surpluses, Anthem has only one subsidiary that anticipates having a Section 833(b) Deduction in calendar year 2001.

If the Plan is treated as effecting a “material change” to Anthem’s structure or operations, Anthem would not be allowed the Section 833(b) Deduction. Anthem would also only be allowed to deduct 80% of our unearned premium reserve rather than 100%. This would have the impact of accelerating taxable income in the year in which the material change occurs.

In addition, as a Blue Cross and Blue Shield organization, Anthem was entitled to adjust the tax basis of assets that we owned on January 1, 1987 to their fair market value on that date. If we were deemed to undergo a material change as a result of the Plan, it is possible that we would lose the remaining benefit of this special basis adjustment, which could cause an increase in our tax liability on any further disposition of certain assets owned on January 1, 1987.

Status as an Insurance Company As long as Anthem does not undergo a material change, Anthem will be treated as an insurance company for federal income tax purposes. If Anthem were determined to have undergone a material change, Anthem’s status as an insurance company would depend on whether its predominant business activities are considered to be those of an insurance company. Loss of insurance company status generally would preclude Anthem from taking into account deductions for additions to certain reserves that insurance companies are permitted to deduct for federal income tax purposes. The loss of these deductible reserves would, in general, cause acceleration of the payment of federal income tax on income derived from Anthem’s operations. Anthem, however, believes that Anthem should continue to qualify as an insurance company regardless of whether the demutualization is viewed as a material change.

Certain ERISA Considerations

General Anthem Insurance has applied to the Department of Labor (the “DOL”) for an exemption from Section 406 of the Employee Retirement Income Security Act of 1974 (“ERISA”) and Section 4975 of the Code with respect to the receipt of consideration pursuant to the Plan by employee benefit plans subject to the provisions of those sections. If the requested exemption is not granted prior to the Effective Date, Anthem Insurance may delay payment of such consideration to affected Eligible Statutory Members, if necessary, for a period not to exceed six months following the Effective Date, by depositing the consideration in the form of cash or common stock in a trust established to satisfy certain potential claims against Anthem Insurance and to ensure that the transactions described in the Plan qualify as tax-free transactions under the Code.

Anthem will not cause or allow the conversion to become effective unless: ‰ on or prior to the Effective Date, the Department of Labor has granted the requested exemption; ‰ Anthem Insurance has, upon advice of counsel, otherwise determined and reported to the Indiana Insurance Commissioner that the distribution of consideration will not have an adverse effect on Eligible Statutory Members or on Anthem Insurance, or will not constitute a prohibited transaction under ERISA or the Code; or ‰ a trust, as described above, has been established.

Neither Anthem Insurance nor Anthem, Inc. nor any of their subsidiaries or their subsidiaries’ employees, officers or directors are or will be Eligible Statutory Members under any employee benefit plan established or maintained by Anthem Insurance, Anthem, Inc. or any of their subsidiaries for the benefit of their employees, officers or directors.

31 Anthem Insurance has not issued any policies to Statutory Members that are part of tax-qualified retirement funding arrangements or individual retirement annuities described in Sections 401(a), 403(b), 408 or 408A of the Code.

Prohibited Transaction Exemption A significant percentage of the policies held by Eligible Statutory Members are associated with welfare benefit plans subject to ERISA (“ERISA plans”). The DOL has taken the position that, absent an exemption, the receipt of stock or other consideration in exchange for the extinguishing of membership interests in a demutualization with respect to ERISA plans is a prohibited transaction where the insurer is a “party in interest” with respect to the plans under ERISA. Anthem Insurance may be considered to be a “party in interest” under ERISA with respect to plans funded by Anthem policies. Absent an exemption, the receipt of Anthem, Inc. common stock (or, in limited cases, cash) by Eligible Statutory Members whose policies are associated with ERISA plans could be viewed as a prohibited transaction under Section 406 of ERISA.

You have a Policy associated with an ERISA plan if (1) you are an employer or employee organization and you maintain the Policy for the purpose of providing benefits to participants or their beneficiaries or (2) the Policy is a certificate issued under a group insurance policy or health care benefit contract maintained by an employer or employee organization for the purpose of providing benefits to participants or their beneficiaries. A participant is defined as any employee or former employee or any member or former member of an employee organization who is or may become eligible to receive a benefit. A group insurance policy or health care benefits contract is exempt from ERISA if it is held by a governmental entity or a church, provided that the church has not elected to be subject to ERISA.

Anthem has applied for an individual prohibited transaction exemption from the DOL. The individual prohibited transaction exemption would allow Eligible Statutory Members with policies associated with ERISA plans to receive Anthem, Inc. common stock or cash without application of the prohibited transaction rules. The DOL grants individual prohibited transaction exemptions if it determines that the exemption is administratively feasible, is in the interest of the ERISA plans and their participants and beneficiaries, and is protective of the rights of participants and beneficiaries. Similar individual prohibited transaction exemptions have been granted by the DOL with respect to demutualizations of other insurance companies.

Fiduciary Obligations The DOL has taken the position that, where plan benefits are funded in whole or in part by employee contributions, or where premiums are paid by or through a trust, the stock or other consideration distributed to a plan sponsor or plan fiduciary in a demutualization in connection with a policy or contract that funds an ERISA plan is a “plan asset” under ERISA. Characterization of any consideration received under the Plan of Conversion as a plan asset under ERISA imposes certain obligations on plan sponsors and other fiduciaries of ERISA plans. Plan assets must be handled and applied in a manner consistent with the terms of the plans and ERISA requirements. In the case of policies associated with ERISA plans without a trust (for example, where the employer owns the Policy directly), compliance with ERISA may require that a trust be established to hold the Anthem, Inc. common stock that is distributed to the employer or fiduciary under the Plan.

ERISA requires that plan assets be used for the exclusive benefit of participants and beneficiaries under that plan and for defraying reasonable costs of administering that plan. Under ERISA, if you are an employer and your employees have paid some or all of the premiums under the Policy, you may have additional obligations and limitations with respect to the use of the consideration that you receive under the Plan of Conversion. For example, you may be obligated to use all or part of that consideration to provide a premium holiday or otherwise benefit plan participants. You should consult your tax or legal advisor concerning the receipt and use of any consideration received under the Plan of Conversion.

32 All decisions about the receipt and use of consideration received in connection with an ERISA plan must be made by the Eligible Statutory Member (or a fiduciary, such as a trustee, appointed by the Eligible Statutory Member). To the extent that ERISA applies to any decisions about the receipt and use of such consideration, the Eligible Statutory Member or other fiduciary must make that decision independent of Anthem. Anthem does not have any authority, responsibility or liability for any decisions by an Eligible Statutory Member with respect to the receipt or use of any consideration received under the Plan of Conversion.

In a recent information letter issued in connection with another demutualization, the DOL stated that if an employer is not otherwise required to maintain a trust for its ERISA plan, the plan sponsor does not have to establish a trust solely to hold demutualization compensation, provided that all of the following requirements are satisfied: ‰ The employer is not otherwise required to maintain a trust for its welfare plan under Section 403 of ERISA (for example, because the plan is funded solely by insurance contracts and all employee contributions are promptly transmitted to the insurer); ‰ The assets not held in trust consist solely of compensation received by the employer as a policyholder in connection with a demutualization; ‰ The demutualization compensation is placed in the name of the plan in an interest-bearing account (in the case of cash) or a custodial account (in the case of stock), as soon as reasonably possible following receipt, and the compensation is applied to plan benefit enhancements as soon as reasonably possible, but not later than 12 months following receipt; ‰ The assets are subject to the control of a designated plan fiduciary; and ‰ The designated fiduciary maintains all documents and records required by ERISA in connection with the receipt, holding and application of the demutualization compensation.

The DOL’s information letter and other DOL guidance indicate that plan sponsors have a number of options for applying and allocating the “plan assets” portion of the demutualization compensation. You may want to consult with your own legal counsel to determine whether and how the DOL’s recent information letter may be helpful to you.

Distributions with Respect to Policies Associated with ERISA Plans Under the Plan, a small number of Eligible Statutory Members (certain large group customers) who receive and retain 30,000 or more shares of Anthem, Inc. common stock will be restricted from selling their shares in the public market for 180 days following the Effective Date, except for a transfer that occurs in accordance with the Large Holder Sale Program, transfers that occur by operation of law or transfers with the written consent of Anthem, Inc. See “Large Holder Sale Program Procedures and Restrictions” above. During this 180-day period, if you are an Eligible Statutory Member who holds a group Policy in connection with an ERISA plan, you may designate that a trust receive the common stock.

Eligible Statutory Members who hold group policies associated with ERISA plans should consult with their tax or benefit advisors about the application of the trust requirements and other ERISA rules to the receipt, holding, and disposition of Anthem, Inc. common stock.

Trust Reporting Requirements The trustee of a trust that receives consideration under the Plan of Conversion is subject to certain duties and responsibilities under ERISA. There may also be different ERISA reporting requirements for an ERISA plan as a result of the creation of the trust to receive such consideration. There are also tax implications from the establishment and maintenance of a trust.

33 ERISA imposes certain periodic reporting obligations on ERISA plans, and those obligations may be changed due to the creation of a trust associated with an ERISA plan.

Fiduciaries of ERISA plans and Eligible Statutory Members who hold group Policies associated with ERISA plans should consult with their tax or benefit advisors about the application of ERISA trust and reporting requirements.

Appeal Period Section 27-15-15-2 of the Indiana demutualization law provides that any action challenging the validity of or arising out of acts taken or proposed to be taken under any order of the Indiana Insurance Commissioner in connection with the Plan must be commenced within 30 days after the order or determination is issued by the Indiana Insurance Commissioner. We expect that the 30-day appeal period will not have expired prior to the Effective Date. We cannot predict whether any action challenging the Plan or the approval thereof will be commenced or what aspects of the Plan, if any, such an action might challenge. In the event that the order of the Indiana Insurance Commissioner is challenged, a successful challenge could result in monetary damages, a modification of the Plan or the Indiana Insurance Commissioner’s approval of the Plan being set aside. A successful challenge would likely result in substantial uncertainty relating to the terms and effectiveness of the Plan, including but not limited to, the conversion of Anthem Insurance, payment of consideration upon the extinguishing of your membership interests, and the proposed initial public offering, and a substantial period of time might be required to reach a final determination. However, in order to challenge successfully the Indiana Insurance Commissioner’s approval of the Plan, the petitioner would have to sustain the burden of showing that such approval was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, contrary to constitutional right, power, privilege, or immunity, in excess of statutory jurisdiction, authority, or limitations, or short of statutory right, without observance of procedure required by law or unsupported by substantial evidence.

In addition, pursuant to the Indiana demutualization law, if certain claims have been asserted against Anthem Insurance and remain unresolved on the Effective Date, distribution of consideration to some or all Eligible Statutory Members may be delayed by more than six months, by establishing one or more trusts for the purpose of holding assets on and following the Effective Date that are adequate to satisfy such claims.

34 OPINIONS OF OUR ADVISORS

Tax Opinion Under the Plan, we must receive an opinion of our tax advisor regarding certain federal income tax consequences of the Plan in order for the Plan to become effective. The tax opinion will be based upon the accuracy of certain representations and undertakings by Anthem Insurance.

As required by the Plan, Anthem Insurance has received a tax opinion from Ernst & Young LLP, its tax advisor, substantially to the effect that: ‰ Neither Anthem Insurance nor Anthem, Inc. will recognize gain or loss as a result of the Plan; ‰ Each Eligible Statutory Member receiving solely common stock will not recognize gain or loss as a result of the Plan; ‰ Each Eligible Statutory Member receiving cash will recognize taxable income in the year in which the cash is received. The amount of such cash will generally constitute capital gain, and will be long-term capital gain if the Eligible Statutory Member’s holding period in the Policy at the time of sale is more than 12 months. However, under certain circumstances in which an Eligible Statutory Member actually or constructively continues to own Anthem, Inc. common stock, the cash received may be taxed as ordinary income. In addition, in the event that you receive cash under the Plan in an amount that exceeds $150,000 in a year other than the year in which the Conversion is effective, an additional Federal income tax may be imposed. ‰ The tax basis of the shares of common stock to be received by each Eligible Statutory Member receiving stock will be zero; ‰ Provided that the applicable Policy or Policies held by an Eligible Statutory Member constitute a capital asset on the Effective Date, the holding period of the shares of common stock to be received by such Eligible Statutory Member will include the period during which such Eligible Statutory Member became a Statutory Member and had continuous health care benefits coverage from the same company (or such predecessor company from which its business was assumed in a merger); and ‰ The summary of the principal income tax consequences of the Plan to Eligible Statutory Members and to Anthem as set forth herein, to the extent it describes matters of law or legal conclusions, is, subject to the limitations and assumptions set forth herein, an accurate summary of the material federal income tax consequences of the Plan to Eligible Statutory Members and Anthem under the federal income tax law and will remain accurate under the applicable federal income tax law and other relevant authorities in effect as of the Effective Date, except for any developments between the date of this Member Information Statement and the Effective Date that Anthem determines are not materially adverse to the interests of Eligible Statutory Members.

A copy of the opinion of our tax advisor is included in Part 1 of this Member Information Statement as Appendix 2. The Plan will not become effective unless these opinions are reconfirmed as valid under the law and regulations in effect on the Effective Date. You should bear in mind that tax opinions are not binding on the IRS or the courts.

Opinions of Our Financial Advisor Pursuant to a letter agreement dated as of March 16, 1998, Anthem engaged Goldman, Sachs & Co. (“Goldman Sachs”) to act as its financial advisor. Goldman Sachs delivered to Anthem’s Board of Directors a written fairness opinion, dated June 18, 2001, stating that the aggregate consideration to be distributed to the Eligible Statutory Members in exchange for the extinguishing of their membership interests under the Plan and Anthem Insurance’s Amended and Restated Articles of Incorporation is fair to the Eligible Statutory Members, as a group, from a financial point of view. Goldman Sachs has also provided the Board of Directors with a written opinion, dated June 18, 2001, stating that the aggregate consideration to be paid to the Eligible Statutory

35 Members upon the extinguishing of their membership interests under the Plan is equal to or greater than the statutory surplus of Anthem Insurance. The full text of these opinions is included in Part 1 of this Member Information Statement as Appendix 3, and sets forth the assumptions made, matters considered and limitations on the review undertaken by Goldman Sachs in connection with the opinions. Statutory Members are urged to, and should, read the opinions of Goldman Sachs in their entirety, including the procedures followed, assumptions made and matters considered by Goldman Sachs in rendering such opinions. The opinions were delivered solely for the information and assistance of Anthem’s Board of Directors and are not a recommendation to Anthem Insurance’s Statutory Members as to how to vote on the Plan. The Plan requires reaffirmation of these opinions as of the Effective Date.

Anthem selected Goldman Sachs as its financial advisor because it is a nationally recognized investment banking firm that has substantial experience in mutual company restructurings. Goldman Sachs, as part of its investment banking business, is also continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. Goldman Sachs has in the past provided financial advisory services to Anthem and its affiliates and has received customary fees for rendering such services.

Anthem agreed to pay Goldman Sachs retainer fees of $50,000 per month, a fee of $1.5 million upon delivery of an opinion with respect to the Conversion, plus an additional $1.5 million on the Effective Date in the event that the capital raised from the initial public offering and any other capital raising transactions conducted substantially concurrently with the initial public offering does not exceed $250 million. Anthem also agreed to reimburse Goldman Sachs for its reasonable out-of-pocket expenses and the fees and disbursements of its legal counsel plus any sales, use or similar taxes. Anthem also agreed to indemnify Goldman Sachs against certain liabilities in connection with its engagement, including certain liabilities under federal securities laws. In addition, Anthem has retained Goldman Sachs as lead manager for the initial public offering of its common stock and for any public offering or private placement of other securities in connection with the Conversion.

Certain managing directors, officers and other representatives of Goldman Sachs may be Eligible Statutory Members entitled to receive consideration under the Plan.

Actuarial Opinion We retained Daniel J. McCarthy, FSA, MAAA, Dale S. Hagstrom, FSA, MAAA, and Robert H. Dobson, FSA, MAAA, independent consulting actuaries associated with Milliman USA, Inc., an independent actuarial consulting firm, to advise us in connection with the actuarial matters involved in the Plan and the payment of consideration to Eligible Statutory Members. The opinion of Messrs. McCarthy, Hagstrom and Dobson, dated June 18, 2001, states, in reliance upon the matters described in the opinion, that the principles, assumptions, methodologies and formulas provided in the Plan to allocate consideration among Eligible Statutory Members in exchange for the extinguishing of their membership interests are reasonable and appropriate and that the resulting allocation of consideration among Eligible Statutory Members is fair and equitable. A copy of the opinion is attached as Appendix 4 to Part 1 of this Member Information Statement. We encourage you to read this opinion in its entirety. This opinion must be reaffirmed as of the Effective Date.

36 MEMBER INFORMATION STATEMENT PART 1

APPENDICES Appendix 1—Anthem Insurance Companies, Inc. Plan of Conversion to a Stock Insurance Company ..... A-1 Exhibit A-1—Summary of the Amended and Restated Articles of Incorporation of Anthem Insurance Companies, Inc...... A-21 Exhibit A-2—Amended and Restated Articles of Incorporation of Anthem Insurance Companies, Inc...... A-23 Exhibit B— Summary of the Amended and Restated By-Laws of Anthem Insurance Companies, Inc...... A-29 Exhibit C— Summary of the Articles of Incorporation of Anthem, Inc...... A-32 Exhibit D— Summary of By-Laws of Anthem, Inc...... A-35 Exhibit E— Summary of Large Holder Sale Program Procedures and Restrictions ...... A-39 Exhibit F— Summary of Actuarial Contribution Memorandum ...... A-40 Appendix 2—Tax Opinion of Ernst & Young LLP ...... A-42 Appendix 3—Goldman, Sachs & Co. Opinions ...... A-45 Appendix 4—Actuarial Opinion of Daniel J. McCarthy, FSA, MAAA; Dale S. Hagstrom, FSA, MAAA; and Robert H. Dobson, FSA, MAAA ...... A-57

A-i

Appendix 1

ANTHEM INSURANCE COMPANIES, INC.

a mutual insurance company organized and existing under the Indiana Insurance Law

PLAN OF CONVERSION TO A STOCK INSURANCE COMPANY

under Ind. Code 27-15-2-2

Proposed by the Board of Directors of Anthem Insurance Companies, Inc. on June 18, 2001

A-1 TABLE OF CONTENTS

Preliminary Statements ...... A-4 ARTICLE I—Manner of Conversion ...... A-5 Section 1.1. Conversion to a Stock Insurance Company ...... A-5 Section 1.2. Parent Company ...... A-5 Section 1.3. Effectiveness of the Plan ...... A-5 Section 1.4. Tax Considerations ...... A-6 Section 1.5. ERISA Plans; Tax-Qualified Policies ...... A-6 Section 1.6. Public Sale of Common Stock ...... A-7 Section 1.7. Continuation of Corporate Existence ...... A-8 ARTICLE II—Extinguishment of Membership Interests ...... A-8 ARTICLE III—Distribution of Consideration ...... A-8 ARTICLE IV—Determination of Fair Value of Anthem ...... A-8 ARTICLE V—Form and Amount of Consideration to be Distributed ...... A-9 Section 5.1. Aggregate Amount or Value ...... A-9 Section 5.2. Common Stock ...... A-9 ARTICLE VI—Payment of Consideration to Eligible Statutory Members ...... A-9 Section 6.1. Method of Election ...... A-9 Section 6.2. Payment in Common Stock ...... A-10 Section 6.3. Payment in Cash ...... A-10 Section 6.4. Commission-Free Odd Lot Program ...... A-11 ARTICLE VII—Method or Formula for the Allocation of Consideration ...... A-11 Section 7.1. Allocation of Allocable Shares ...... A-11 Section 7.2. Aggregate Fixed Component and Aggregate Variable Component ...... A-11 Section 7.3. Allocation of Aggregate Variable Component ...... A-12 ARTICLE VIII—Closed Block ...... A-12 ARTICLE IX—Address and Telephone Number of Anthem ...... A-12 ARTICLE X—Approval by the Commissioner ...... A-12 Section 10.1. Application ...... A-12 Section 10.2. Commissioner’s Public Hearing on the Plan; Commissioner’s Order ...... A-13 Section 10.3. Notice of Public Hearing ...... A-13 Section 10.4. Findings Required for Approval ...... A-13 ARTICLE XI—Approval by Statutory Members ...... A-13 Section 11.1. Voting ...... A-13 Section 11.2. Notice of Special Meeting ...... A-14 ARTICLE XII—Additional Provisions ...... A-14 Section 12.1. Holders of Policies ...... A-14 Section 12.2. In Force ...... A-15 Section 12.3. Confidentiality ...... A-15 Section 12.4. Acquisition of Ownership ...... A-15 Section 12.5. Restriction on Stock to Directors and Executive Officers ...... A-15 Section 12.6. Trust ...... A-16 Section 12.7. Amendment or Withdrawal of Plan ...... A-16 Section 12.8. Corrections ...... A-16

A-2 Section 12.9. Adjustment of Share Numbers ...... A-16 Section 12.10. Notices ...... A-16 Section 12.11. Costs and Expenses ...... A-16 Section 12.12. Captions and Headings ...... A-17 Section 12.13. Governing Law ...... A-17 Section 12.14. Judicial Review ...... A-17 Section 12.15. Stock Incentive Plan ...... A-17 ARTICLE XIII—Definitions ...... A-17 Section 13.1. General Terms ...... A-17 Section 13.2. Specific Terms ...... A-17 EXHIBIT A—Amended and Restated Articles of Incorporation of Anthem Insurance Companies, Inc. . . A-21 EXHIBIT B—Amended and Restated By-Laws of Anthem Insurance Companies, Inc...... A-29 EXHIBIT C—Articles of Incorporation of Anthem, Inc...... A-32 EXHIBIT D—By-Laws of Anthem, Inc...... A-35 EXHIBIT E—Large Holder Sale Program Procedures and Restrictions ...... A-39 EXHIBIT F—Actuarial Contribution Memorandum ...... A-40

A-3 ANTHEM INSURANCE COMPANIES, INC. PLAN OF CONVERSION TO A STOCK INSURANCE COMPANY

This Plan of Conversion to a Stock Insurance Company (this “Plan”) has been proposed by the Board of Directors (the “Board”) of Anthem Insurance Companies, Inc., a mutual insurance company organized and existing under the laws of the State of Indiana (“Anthem Insurance”), by resolutions of the Board duly adopted at a meeting duly called and held on June 18, 2001 (the “Adoption Date”). Capitalized terms have the meanings set forth in Article XIII.

PRELIMINARY STATEMENTS

A. This Plan provides for the conversion of Anthem Insurance from a mutual insurance company into a stock insurance company pursuant to Ind. Code 27-15-2-2, and otherwise in accordance with Ind. Code 27-15 (the “Indiana Demutualization Law”), and the concurrent establishment of an Indiana domiciled parent company for Anthem Insurance through the transactions described herein (the “Conversion”).

B. The principal purpose of the Conversion is to improve Anthem Insurance’s access to capital through the public markets. Having access to the public markets through Anthem, Inc. (described in Section 1.2(a)) will enhance Anthem Insurance’s financial flexibility by allowing it to obtain equity capital from sources that are available to a stock company, but not to a mutual insurance company. In addition, the Conversion will benefit Anthem Insurance’s Eligible Statutory Members by distributing the fair value of Anthem Insurance at the time of the Conversion (before giving effect to new capital raised in the initial public offering) to its Eligible Statutory Members in the form of cash or Anthem, Inc. common stock in exchange for their otherwise illiquid Membership Interests, which will thereupon be extinguished. Thus, Eligible Statutory Members will have the ability to realize economic value from the conversion of their Membership Interests that is not available to them so long as Anthem Insurance remains a mutual company.

C. The Conversion will also provide, upon receipt of requisite regulatory approvals, for Anthem Insurance to cease issuing or renewing the Guaranty Policies issued by Anthem Insurance in connection with its merger in 1993 with Southeastern Mutual Insurance Company, a mutual insurance company domiciled in Kentucky, its merger in 1995 with Community Mutual Insurance Company, a mutual insurance company domiciled in Ohio, and its merger in 1997 with Blue Cross & Blue Shield of Connecticut, Inc., a mutual insurance company domiciled in Connecticut. Those Guaranty Policies have been issued to protect and preserve the membership interests of the members of the merged mutual companies and to grant Membership Interests to certain customers of the successor insurers to those merged mutual companies, and continued issuance of Guaranty Policies will no longer be needed or appropriate upon completion of the Conversion. Pursuant to Sections 7.2, 7.3, 7.4, 7.5 and 7.6 of Anthem Insurance’s Third Amended and Restated Articles of Incorporation, former members of Southeastern Mutual Insurance Company, Community Mutual Insurance Company and Blue Cross & Blue Shield of Connecticut, Inc., as well as customers of the successor insurers to those merged mutual companies, who were entitled to receive Guaranty Policies or Certificates of Membership, as applicable, in connection with the mergers are considered to have been issued their insurance policies directly by Anthem Insurance for the purpose of this Plan. Through the Conversion, Anthem Insurance will complete its obligations arising out of those mergers with respect to the Membership Interests of the members of those merged companies and certain customers of the successors to those companies following such mergers.

D. The Conversion will not, in any way, change policy premiums or health care benefits to Statutory Members or policyholders.

E. The Board believes that the Conversion will provide Anthem Insurance with greater financial flexibility. The Board believes that this financial flexibility will improve Anthem Insurance’s access to capital to permit

A-4 Anthem Insurance to expand existing business, develop new business opportunities and enhance its competitive position in the health benefits industry, and continue to improve service to customers. The Board, therefore, has unanimously determined that the Plan is in the best interests of Anthem Insurance, the Eligible Statutory Members and other Statutory Members and policyholders of Anthem Insurance, and is fair, reasonable and equitable to the Eligible Statutory Members and will not prejudice the interests of the other Statutory Members and policyholders of Anthem Insurance.

ARTICLE I

MANNER OF CONVERSION

The manner in which the Conversion will occur, and the insurance and other companies that will result from or be directly affected by the Conversion, are as follows:

SECTION 1.1. Conversion to a Stock Insurance Company. In accordance with the Indiana Demutualization Law, Anthem Insurance will as of and following the Effective Date of the Conversion become a stock insurance company, organized and existing under the Indiana Insurance Law (Ind. Code 27-1 et. seq.). The Articles of Incorporation and By-Laws of Anthem Insurance, as amended upon the Effective Date of the Conversion, will be substantially in the forms attached as Exhibit A and Exhibit B, respectively. The Conversion is intended to qualify as a tax-free reorganization described in Section 368 of the Internal Revenue Code of 1986, as amended (the “Code”).

SECTION 1.2. Parent Company. (a) All of the outstanding capital stock of Anthem Insurance will, on and immediately following the Effective Date of the Conversion, be held by Anthem, Inc., a corporation to be formed under the Indiana Business Corporation Law. Anthem, Inc. will constitute a “parent company,” meeting the requirements of Ind. Code 27-15-16-1. The Articles of Incorporation and By-Laws of Anthem, Inc. will be substantially in the forms attached as Exhibit C and Exhibit D, respectively.

(b) Anthem, Inc. will initially be formed as a wholly owned subsidiary of Anthem Insurance. On the Effective Date of the Conversion and immediately prior to the cancellation of the capital stock of Anthem, Inc. then held by Anthem Insurance, as contemplated by Section 1.2(c)(iii) below, the Eligible Statutory Members will be entitled to receive the consideration described in Article V of this Plan.

(c) The Conversion will be effected through the following structure or series of transactions in the following order: (i) Anthem Insurance will convert to and become a stock company and issue to Anthem, Inc. all of the outstanding capital stock of Anthem Insurance. (ii) Anthem, Inc. will distribute to the Eligible Statutory Members the consideration described in Article V of this Plan. (iii) The capital stock of Anthem, Inc. owned by Anthem Insurance will be cancelled and cease to exist. (iv) The foregoing transactions are intended to qualify as tax-free transactions within the meaning of Sections 351 and 368 of the Code.

SECTION 1.3. Effectiveness of the Plan. The Plan and the amendment and restatement of Anthem Insurance’s Articles of Incorporation contemplated by Section 1.1 (the “Articles Amendment”) will become effective upon the date and time of approval of appropriate Articles of Amendment by the Indiana Secretary of State as provided in Ind. Code 27-1-8 unless a later date and time are specified in the Articles Amendment, in which event the Plan and the Articles Amendment will become effective and take place at the later date and time. The Effective Date shall be no more than 12 months after the date on which the Commissioner issues the order contemplated by Section 10.2, unless such period is extended by the Commissioner.

A-5 SECTION 1.4. Tax Considerations. Anthem Insurance will not cause or allow the Plan to become effective unless, on or prior to the Effective Date, and in any event reaffirmed as of the Effective Date, Anthem Insurance has received written Tax Opinions (and a ruling from the Internal Revenue Service, if deemed appropriate by Anthem Insurance), which collectively provide assurance substantially to the effect that, for federal income tax purposes: (i) Neither Anthem Insurance nor Anthem, Inc. will recognize gain or loss as a result of the Conversion. (ii) Each Eligible Statutory Member receiving solely Common Stock pursuant to Article VI will not recognize gain or loss as a result of the Conversion. (iii) Each Eligible Statutory Member receiving cash pursuant to Article VI will recognize taxable income in the year in which the cash is received. The amount of such cash will generally constitute long term capital gain, provided that, on the date of the Conversion, the Policy held by such Eligible Statutory Member constitutes a capital asset and such Eligible Statutory Member’s holding period of the Policy in respect of which the payment is made is more than 12 months, and subject to the limitations of Section 302 of the Code, if applicable. (iv) The basis of the shares of Common Stock to be received by each Eligible Statutory Member pursuant to Article VI will be zero. (v) Provided that the applicable Policy or Policies held by an Eligible Statutory Member constitute a capital asset on the date of the Conversion, the holding period of the shares of Common Stock to be received by such Eligible Statutory Member pursuant to Article VI will include the period during which the Eligible Statutory Member held (A) such Policy, and (B) all Policies of which the Eligible Statutory Member has been a Holder from time to time through the Effective Date and under which the Eligible Statutory Member has had continuous health care benefits coverage with the same company (or such predecessor company from which its business was assumed in a merger described in Preliminary Statement C) without a break in coverage of more than one day. (vi) The summary of the principal income tax consequences to Eligible Statutory Members of their receipt of consideration set forth in the information provided to Statutory Members, to the extent it describes matters of law or legal conclusions, is, subject to the limitations and assumptions set forth therein, an accurate summary of the material federal income tax consequences to Eligible Statutory Members of the consummation of the Conversion under the federal income tax law and remains accurate under the applicable federal income tax law and other relevant authorities in effect as of the Effective Date, except for any developments between the date of the information provided to Statutory Members and the Effective Date that Anthem Insurance has determined are not materially adverse to the interests of Eligible Statutory Members.

SECTION 1.5. ERISA Plans; Tax-Qualified Policies. (a) Anthem Insurance has applied to the Department of Labor for an exemption from Section 406(a) of the Employee Retirement Income Security Act of 1974 (“ERISA”) and Section 4975 of the Code with respect to the receipt of consideration pursuant to the Plan in respect of employee benefit plans subject to the provisions of such sections (the “DOL Exemption”). Notwithstanding any other provision of this Plan, if such exemption is not granted prior to the Effective Date of the Plan, Anthem Insurance may delay payment of such consideration, if necessary, for a period not to exceed six months following the Effective Date, by depositing such consideration in the form of cash or stock in a trust established in accordance with Section 12.6. Anthem Insurance will not cause or allow the Conversion to become effective unless, on or prior to the Effective Date, (i) the Department of Labor has granted such exemption, (ii) Anthem Insurance has, upon advice of counsel, otherwise determined and reported to the Commissioner that the distribution of consideration will not have an adverse effect on Eligible Statutory Members or on Anthem Insurance, or that the distribution of consideration will not constitute a prohibited transaction under ERISA or the Code, or (iii) a trust, as described in the preceding sentence, has been established in accordance with Section 12.6.

A-6 (b) Neither Anthem Insurance nor Anthem, Inc. nor any of their subsidiaries nor any of their or their subsidiaries’ employees, officers or directors are or will be Eligible Statutory Members under any benefit or welfare plan established or maintained by Anthem Insurance, Anthem, Inc. or any of their subsidiaries for the benefit of such employees, officers or directors.

(c) There are no Policies issued by Anthem Insurance that are part of tax-qualified retirement funding arrangements or individual retirement annuities described in Sections 401(a), 403(a), 403(b), 408 or 408A of the Code.

SECTION 1.6. Public Sale of Common Stock. (a) As contemplated by Ind. Code 27-15-3-2(12)(E), on the Effective Date, Anthem, Inc. will offer and sell to the public shares of Common Stock (the “Public Offering”) to raise capital for Anthem, Inc. and to provide cash for the cash payments to be made by Anthem, Inc. under Article VI.

(b) Anthem Insurance and Anthem, Inc. will select as managing underwriters for the Public Offering investment banking firms of substantial national and/or regional reputation. The managing underwriters will conduct the Public Offering in a manner generally consistent with customary practices for initial public offerings of a type, size and nature comparable to the Public Offering. The Commissioner and the Commissioner’s financial advisor will be given access to the process and information that leads to the pricing of the Common Stock in the Public Offering, it being understood that at the conclusion of the process a committee of the Board of Directors of Anthem, Inc. will make the final pricing determination in executive session. Such committee will consist of directors, the majority of whom are not officers or employees of Anthem Insurance or Anthem, Inc. or any of their subsidiaries, and no employees, officers or directors of, or legal counsel to, any of the underwriters for the Public Offering will serve on such committee. The Conversion will be subject to the Commissioner’s (or her designee’s) concurrence that the terms of the Public Offering are fair, reasonable and equitable to the Eligible Statutory Members.

(c) In addition to the Public Offering, Anthem, Inc. may also raise capital or obtain funds substantially concurrently with the Public Offering through one or more of the following (“Other Capital Raising Transactions”): (i) A public offering or private placement of mandatorily convertible securities or trust preferred securities or similar instruments; (ii) A public offering or private placement of convertible or non-convertible preferred securities or similar instruments; and (iii) A public offering or private placement of debt securities, commercial paper issuances or bank or other borrowings.

(d) The material terms of the securities to be offered in any proposed Other Capital Raising Transactions to be conducted substantially concurrently with the Public Offering will be provided to the Commissioner for the Commissioner’s review not less than 30 days prior to the earlier of the distribution of any preliminary prospectus or preliminary offering memorandum, or commencement of the roadshow, or similar activity relating to any Other Capital Raising Transaction. The Conversion will be subject to the Commissioner’s concurrence that the terms of any Other Capital Raising Transactions are fair, reasonable and equitable to the Eligible Statutory Members.

(e) Anthem, Inc. will contribute to Anthem Insurance from the proceeds of the Public Offering and any Other Capital Raising Transactions an amount not less than the aggregate amount of the out-of-pocket costs and expenses incurred by Anthem Insurance in connection with the Conversion and related transactions. Any additional proceeds from the Public Offering and any Other Capital Raising Transactions will be used at the discretion of Anthem, Inc. for working capital and other general corporate purposes of Anthem, Inc.

A-7 (f) Upon the completion of the Public Offering and any Other Capital Raising Transactions, Anthem Insurance’s paid-in capital stock and surplus will be equal to an amount not less than the minimum paid-in capital stock and surplus required of a new domestic stock insurer upon initial authorization to transact like kinds of insurance.

(g) The Indiana Department of Insurance and its financial advisors may, at their request, monitor the conduct of the Public Offering and any Other Capital Raising Transactions for compliance with the conditions set forth in this Section 1.6.

SECTION 1.7. Continuation of Corporate Existence. Upon Anthem Insurance’s conversion from a mutual insurance company into a stock insurance company pursuant to this Plan, Anthem Insurance shall continue as a stock insurance company as provided in Ind. Code 27-15-6-4.

ARTICLE II

EXTINGUISHMENT OF MEMBERSHIP INTERESTS

All Membership Interests will be extinguished and will cease as of the Effective Date of the Conversion. The extinguishing of Membership Interests will occur by operation of law under the Indiana Demutualization Law on the Effective Date. The contract rights under every Policy will continue in force under the terms of the contract.

Anthem Insurance will cease issuing or renewing Guaranty Policies as of the Effective Date, or as of such later date as all regulatory approvals required therefor have been obtained. If all such requisite regulatory approvals have not been obtained by the Effective Date, Anthem Insurance will continue to issue and renew Guaranty Policies in those states where such regulatory approvals have not yet been obtained, to the customers of its subsidiaries in those states specified in the respective merger agreements relating to the mergers described in Preliminary Statement C of this Plan; and the terms of such Guaranty Policies will be as required by such merger agreements except that provisions relating to Membership Interests will be inapplicable and will be omitted. At the same time that Anthem Insurance ceases to issue or renew Guaranty Policies with respect to a subsidiary as provided above, Anthem Insurance will issue a corporate guaranty to that subsidiary, the form of which guaranty will be subject to prior approval or non-disapproval by the Commissioner pursuant to Ind. Code 27-1-23-4.

ARTICLE III

DISTRIBUTION OF CONSIDERATION

The Eligible Statutory Members will, upon the extinguishing of their Membership Interests, become entitled to receive aggregate consideration equal to the fair value of Anthem Insurance at the time of the Conversion as provided in Article V of this Plan.

ARTICLE IV

DETERMINATION OF THE FAIR VALUE OF ANTHEM INSURANCE

Anthem Insurance has, with the assistance of its Financial Advisor and other advisors retained in connection with the Conversion and Public Offering, structured the Conversion and proposed Public Offering to provide fair value to the Eligible Statutory Members, and this Plan provides for Eligible Statutory Members to receive aggregate consideration equal to the fair value of Anthem Insurance at the time of the Conversion. In that regard, the Board has received written fairness opinions from the Financial Advisor, a qualified, independent financial advisor, confirming, subject to the limitations and qualifications in such opinions (which opinions will be reaffirmed to the Board as of the Effective Date), that: (i) the provision of aggregate consideration upon the

A-8 extinguishing of Membership Interests under this Plan and the Articles Amendment is fair to the Eligible Statutory Members, as a group, from a financial point of view, and (ii) the total consideration to be paid to the Eligible Statutory Members under this Plan is equal to or greater than the statutory surplus of Anthem Insurance.

ARTICLE V

FORM AND AMOUNT OF CONSIDERATION TO BE DISTRIBUTED

SECTION 5.1. Aggregate Amount or Value. The aggregate consideration to be distributed to the Eligible Statutory Members in exchange for their Membership Interests will be shares of Common Stock or cash, as provided in Article VI, equal in value to one hundred million (100,000,000) shares of Common Stock (the “Allocable Shares”). Solely for purposes of calculating the amount of such consideration, each Eligible Statutory Member will be allocated (but not necessarily issued) shares of Common Stock in accordance with this Plan. The cash component of such aggregate consideration will be at least the amount of cash required to pay the distributions to Eligible Statutory Members of consideration as provided in Section 6.1(c). The cash component may be greater than such minimum amount pursuant to Section 6.1(d).

SECTION 5.2. Common Stock. The Common Stock will be a class of securities that is registered under the Securities Exchange Act of 1934, as amended, and that is listed for trading on a nationally recognized stock exchange or on the Nasdaq National Market. Anthem, Inc. will use its best efforts to maintain such a listing for so long as Anthem, Inc. is a publicly traded company. The listing, and the efforts by Anthem, Inc. to maintain this listing, will satisfy any duty Anthem Insurance or Anthem, Inc. may have to assure that an active public trading market for the trading of Common Stock will develop. Neither Anthem Insurance nor Anthem, Inc. will have any obligation to provide a procedure for the disposition of shares of Common Stock, except as expressly stated in this Plan.

ARTICLE VI

PAYMENT OF CONSIDERATION TO ELIGIBLE STATUTORY MEMBERS

SECTION 6.1. Method of Election. Every Eligible Statutory Member will be entitled to shares of Common Stock or cash in accordance with the following provisions:

(a) Eligible Statutory Members who affirmatively request Common Stock in accordance with this Section 6.1(a) will be paid in shares of Common Stock, subject to the limitations set forth in Section 6.1(c). Eligible Statutory Members may elect to be paid in shares of Common Stock by properly completing the card included with the materials accompanying the notice of the Special Meeting and returning the card to Anthem Insurance. Anthem Insurance must receive the card on or prior to the date set by Anthem Insurance, which date shall be no earlier than the date set for the receipt of proxies to be used at the Special Meeting.

(b) Eligible Statutory Members who fail to make a Common Stock election in accordance with Section 6.1(a), may be paid in cash, subject to the limitations set forth in Section 6.1(d).

(c) Notwithstanding the foregoing provisions of Section 6.1(a), any Eligible Statutory Member (i) whose receipt of Common Stock would, in the judgment of Anthem, Inc., upon advice from counsel, fail to comply with the securities registration or other requirements of the applicable securities laws of the state of domicile of such Eligible Statutory Member (which state of domicile shall be determined based on such Eligible Statutory Member’s mailing address as shown on the records of Anthem Insurance) or to whom the requirements necessary to qualify Common Stock for issuance in the state of domicile of such Eligible Statutory Member are excessively burdensome or expensive or are likely to be subject to unreasonable delays or (ii) whose address for mailing purposes as shown on the records of Anthem Insurance is located outside the United States, will receive cash.

A-9 (d) At the discretion of Anthem Insurance and Anthem, Inc., and subject to receipt of sufficient proceeds from the Public Offering or availability of funds from other sources (including, without limitation, Other Capital Raising Transactions), cash may be paid to Eligible Statutory Members who fail to make a Common Stock election as provided in Section 6.1(a). The maximum amount of “available cash” that may be paid pursuant to this Section 6.1(d) shall be determined by Anthem Insurance and Anthem, Inc. based upon such companies’ liquidity and capital resources positions, and such tax and other factors as are deemed appropriate in the judgment of such companies (it being understood that Anthem, Inc. and Anthem Insurance intend and will use their best commercially reasonable efforts, consistent with their capital and liquidity needs and projections, to assure that funds sufficient to pay cash to a substantial number of Eligible Statutory Members will be utilized for cash payments under this Section 6.1(d)). Cash paid to Eligible Statutory Members under this Section 6.1(d) will be based on the number of shares allocated to such Eligible Statutory Members in increasing order until the total amount of available cash has been fully distributed, with those Eligible Statutory Members with the fewest number of Allocable Shares being paid in cash first. Furthermore, if there are two or more such Eligible Statutory Members under this Section 6.1(d) who have the same number of Allocable Shares and there is insufficient available cash to pay all such Eligible Statutory Members, then the remaining available cash shall be distributed first to those of such Eligible Statutory Members with the earliest date of coverage. After application of the foregoing procedures, all other Eligible Statutory Members (that is, Eligible Statutory Members other than those receiving cash pursuant to Section 6.1(c) or those already receiving Common Stock pursuant to Section 6.1(a)), will be paid consideration in the form of shares of Common Stock. All calculations required to be made pursuant to this Section 6.1(d) will be based on consultation with and the advice of the tax advisor that provided the Tax Opinion required under Section 1.4 of this Plan.

SECTION 6.2. Payment in Common Stock. (a) Anthem Insurance and Anthem, Inc. will (i) issue to each Eligible Statutory Member, in book-entry form as uncertificated shares, the shares of Common Stock allocated to such Eligible Statutory Member for which such Eligible Statutory Member will not receive consideration in the form of cash, and (ii) use commercially reasonable efforts to mail to each such Eligible Statutory Member an appropriate notice that a designated number of shares of Common Stock have been registered in the name of such Eligible Statutory Member not later than six weeks or such longer period as approved by the Commissioner (but not later than six months, except as provided under Section 12.6) after the Effective Date. Upon written request of the registered holder of such shares issued in book-entry form as uncertificated shares, Anthem, Inc. will mail a stock certificate representing such shares to or at the direction of the registered holder.

(b) Common Stock distributed to any Eligible Statutory Member who is allocated and receives thirty thousand (30,000) or more shares of Common Stock may not be sold, transferred, pledged, hypothecated or otherwise transferred or assigned by such Eligible Statutory Member until one hundred eighty (180) days after the Effective Date, except for: (i) sales in accordance with the large holder sale program procedures and restrictions set forth in Exhibit E to this Plan, (ii) any transfer that occurs by operation of law, or (iii) any transfer as to which Anthem, Inc. consents or agrees in writing at the written request of the holder thereof. With the consent of the Commissioner, upon a showing of good cause by Anthem, Inc., the detailed terms and provisions of the large holder sale program procedures and restrictions set forth in Exhibit E may be corrected, modified or revised.

SECTION 6.3. Payment in Cash. (a) If consideration is to be paid to an Eligible Statutory Member in the form of cash under Section 6.1(c) or 6.1(d), the amount of such consideration will be equal to the number of shares of Common Stock allocated to the Eligible Statutory Member as determined in accordance with Article VII, multiplied by (i) the price at which Common Stock is offered to the public in the Public Offering (the “IPO Price”) or (ii), if the average of the closing prices of the Common Stock (on the primary exchange where the Common Stock is listed) for the twenty (20) consecutive trading days commencing with the Effective Date exceeds 110% of the IPO Price, by the sum of the IPO Price plus the lesser of (A) the amount by which such average closing price exceeds 110% of the IPO Price or (B) 10% of the IPO Price.

(b) If consideration is to be paid to an Eligible Statutory Member in cash under Section 6.1, Anthem, Inc. will use commercially reasonable efforts to make payment of such consideration not later than six weeks or such

A-10 longer period as approved by the Commissioner (but not later than six months, except as provided under Section 12.6) after the Effective Date of this Plan, by check net of any applicable withholding tax.

SECTION 6.4. Commission-Free Odd Lot Program. (a) In order to benefit those Eligible Statutory Members who receive fewer than 100 shares of Common Stock, Anthem, Inc. will, subject to the provisions of Section 6.4(b), establish a commission-free program which will begin at such time after the 180th day following the Effective Date and before the 12 month anniversary of the Effective Date, and will continue for three months or for such longer period of time as the Board of Directors of Anthem, Inc. may determine to be appropriate and in the best interest of Anthem, Inc. and its shareholders. Pursuant to such program, each Eligible Statutory Member who receives under this Plan of Conversion and continues to hold 99 or fewer shares of Common Stock will be entitled to sell at prevailing market prices all, but not less than all, of the shares of Common Stock received by such shareholder, without paying brokerage commissions or administrative or similar expenses. As a part of such program, each Eligible Statutory Member who receives under this Plan of Conversion and continues to hold 99 or fewer shares of Common Stock will also be entitled to purchase at prevailing market prices additional shares to round-up their holdings to 100 shares, without paying brokerage commissions or other administrative or similar expenses. Anthem, Inc. will establish administrative procedures for the delivery of requests to sell or purchase shares of Common Stock and for the sale or purchase of such shares of Common Stock through such program. Such administrative procedures may include procedures under which shares of Common Stock are offered to Anthem, Inc. for repurchase at prevailing market prices when, during any particular day of the program, the number of shares requested to be sold exceeds the number of shares requested to be purchased pursuant to round-up requests.

(b) Such program will be conducted pursuant to an exemption from the registration requirements of the Securities Act of 1933 and will otherwise comply with all applicable securities and other laws. With the consent of the Commissioner, upon a showing of good cause by Anthem, Inc., the terms, procedures and provisions (including time periods), of such program may be extended, modified, revised or limited, or such program may be delayed or suspended.

ARTICLE VII

METHOD OR FORMULA FOR THE ALLOCATION OF CONSIDERATION

The Board has received a written actuarial opinion from Robert H. Dobson, Dale S. Hagstrom, and Daniel J. McCarthy, consulting actuaries associated with Milliman USA, as to the reasonableness and appropriateness of the methodology or formula used to allocate consideration among Eligible Statutory Members, consistent with the Indiana Demutualization Law. The method or formula for the allocation of the consideration among the Eligible Statutory Members will be as follows:

SECTION 7.1. Allocation of Allocable Shares. Each Eligible Statutory Member will be allocated from the Allocable Shares a number of shares of Common Stock equal to the sum of: (a) a fixed component of consideration equal to twenty-one (21) shares of Common Stock (regardless of the size, type or number of Policies held by such Eligible Statutory Member); and (b) a variable component of consideration equal to the portion, if any, of the Aggregate Variable Component allocated with respect to such Eligible Statutory Member.

SECTION 7.2. Aggregate Fixed Component and Aggregate Variable Component. The Allocable Shares will be allocated first to provide for the number of shares of Common Stock required for the aggregate fixed component of consideration allocable pursuant to Section 7.1(a) in respect of all Eligible Statutory Members (the “Aggregate Fixed Component”), and the remainder of the Allocable Shares will constitute the aggregate variable component of consideration (the “Aggregate Variable Component”).

A-11 SECTION 7.3. Allocation of Aggregate Variable Component. (a) The Aggregate Variable Component will be allocated in accordance with the principles set forth below and the calculation of Actuarial Contribution described in the Actuarial Contribution Memorandum (the “Actuarial Contribution Memorandum”) attached as Exhibit F.

(b) The Aggregate Variable Component will be allocated to Eligible Statutory Members as follows: (i) Such allocation will be made by multiplying an Equity Share (defined below) for each Eligible Statutory Member by the number of shares of Common Stock constituting the Aggregate Variable Component and, for each Eligible Statutory Member, rounding such result to the nearest whole number of shares (with one-half being rounded upward). Because of such rounding, the aggregate of Eligible Statutory Members’ variable components will not necessarily be equal to the Aggregate Variable Component. (ii) The Equity Share for each Eligible Statutory Member will be equal to the ratio of the Actuarial Contribution attributable to such Eligible Statutory Member to the sum of all Actuarial Contributions attributable to all Eligible Statutory Members. (iii) Anthem Insurance will make a reasonable determination of the dollar amount of the Actuarial Contribution for each Eligible Statutory Member, which will be zero or a positive number (negative Actuarial Contributions will be deemed and treated as zero Actuarial Contributions), according to the principles and methodologies set forth in detail in the Actuarial Contribution Memorandum. (iv) Calculation of Actuarial Contributions will take into account and include the rights and interests of Eligible Statutory Members holding Policies, including Guaranty Policies (or certificates of coverage thereunder, as applicable), to the full extent called for by Section 8.5 of Anthem Insurance’s Articles of Incorporation as in effect prior to the Effective Date. (v) Each such Actuarial Contribution will be determined on the basis of Anthem Insurance’s records as of the Actuarial Contribution Date.

ARTICLE VIII

CLOSED BLOCK

Anthem Insurance has no Policies or other insurance policies or health care benefit contracts or certificates that require the payment of dividends or as to which any person has any reasonable expectation for the payment of dividends. Accordingly, no closed block nor any other method or procedure will be established to provide for the determination and preservation of reasonable dividend expectations of Eligible Statutory Members or other policyholders.

ARTICLE IX

ADDRESS AND TELEPHONE NUMBER OF ANTHEM

The address and telephone number of Anthem Insurance will be unchanged by the Conversion, and each Statutory Member and other policyholder of Anthem Insurance will receive notification of such information along with a notice of hearing outlined in Section 10.3 of this Plan and in Ind. Code 27-15-4-4.

ARTICLE X

APPROVAL BY THE COMMISSIONER

SECTION 10.1. Application. Anthem Insurance will file with the Commissioner an application (the “Application”) for approval of this Plan, including the Articles Amendment. The Application will include the documents and information required by Ind. Code 27-15-3-2.

A-12 SECTION 10.2. Commissioner’s Public Hearing on the Plan; Commissioner’s Order. This Plan is subject to the approval of the Commissioner. The Commissioner will hold a hearing on the Plan and the Articles Amendment (the “Public Hearing”). Statutory Members and other persons wishing to make comments and submit information may submit written statements before or at the Public Hearing and may also appear and be heard at the Public Hearing. The Commissioner will issue within thirty (30) days after the last day of the Public Hearing an order approving or disapproving the Application, the Plan and the Articles Amendment pursuant to Ind. Code 27-15-4-7.

SECTION 10.3. Notice of Public Hearing. (a) Written notice by Anthem Insurance of the Public Hearing, in a form satisfactory to the Commissioner, will be mailed by first class mail by Anthem Insurance at Anthem Insurance’s expense at least thirty (30) days prior to the Public Hearing to Anthem Insurance’s Statutory Members and other policyholders. Such notice will be mailed to the address of each Statutory Member or other policyholder of Anthem Insurance as such address is shown on Anthem Insurance’s records on the Adoption Date (or such other address as may be provided in writing to Anthem Insurance by the Voting Member a reasonable period of time prior to the mailing of the notice). Such notice of Public Hearing will include a brief statement of the subject of the hearing, the date, time and location of the Public Hearing, a description of the Statutory Members eligible to vote on the Plan and the Articles Amendment, a statement that the Statutory Members and the public may examine at the Indiana Department of Insurance the public record portion of the Application submitted to the Commissioner, the address and telephone number of Anthem Insurance, and such additional information as the Commissioner may require.

(b) Anthem Insurance will also give prior notice of such Public Hearing by publication in The Indianapolis Star and USA Today (National Edition) (or, with the approval of the Commissioner, any other newspaper of national circulation) and in a newspaper of any other city specified by the Commissioner. The notice will be published at least two times at intervals of not less than two weeks, the first publication to be not more than forty- five days and the last publication not less than fifteen days before the Public Hearing. The notice of the Public Hearing will be in a form satisfactory to the Commissioner and state the purpose of the Public Hearing and the date, time, and place where the Public Hearing will occur.

SECTION 10.4. Findings Required for Approval. The Commissioner shall approve the Application and permit the Conversion under this Plan and the Articles Amendment if the Commissioner finds, following the Public Hearing: (a) that the amount and form of consideration is fair in the aggregate and to each member class; (b) that this Plan and the Articles Amendment comply with the Indiana Demutualization Law and other applicable laws; are fair, reasonable and equitable to the Eligible Statutory Members; and will not prejudice the interests of the other Statutory Members and policyholders of Anthem Insurance; and (c) that the total consideration provided to Eligible Statutory Members upon the extinguishing of Anthem Insurance’s Membership Interests is equal to or greater than the surplus of Anthem Insurance.

ARTICLE XI

APPROVAL BY STATUTORY MEMBERS

SECTION 11.1. Voting. (a) Anthem Insurance will hold a special meeting of Statutory Members (the “Special Meeting”) within a time period complying with Ind. Code 27-15-5-2. At the Special Meeting, the Statutory Members eligible to vote will be entitled to vote on the proposal to approve the Plan and the Articles Amendment in person or by proxy. The Statutory Members eligible to vote at the Special Meeting will be the Statutory Members of Anthem Insurance as of the Adoption Date (“Voting Members”), which will be the record date for the Special Meeting. A Voting Member may vote by proxy if the proxy was solicited and obtained from the Voting Member for the express purpose of voting on the Plan and the Articles Amendment, and if the proxy solicitation materials were provided to and approved by the Commissioner before they were mailed or provided to the Voting Member.

A-13 (b) The Plan and the Articles Amendment are subject to the approval of not less than two-thirds of the votes of the Voting Members voting thereon in person or by proxy at the Special Meeting at which at least 10% of the Voting Members must be represented in person or by proxy. The Voting Members will vote as a single class.

(c) Each Voting Member will be entitled to one vote, regardless of the size, type or number of Policies held by such Voting Member. Two or more persons who qualify as Voting Members under a single Policy will be deemed one Voting Member for purposes of voting and collectively will be entitled to one vote.

SECTION 11.2. Notice of Special Meeting. (a) Anthem Insurance will mail notice of the Special Meeting by first class mail to all Voting Members. The notice will comply with Ind. Code 27-15-5-3 and set forth the reasons for the vote and the date, time and place of the Special Meeting, and will enclose one proxy form for each Voting Member. Such notice and proxy form will be mailed, at least 30 days prior to the Special Meeting, to the address of each Voting Member as it appears on the records of Anthem Insurance on the Adoption Date (or such other address as may be provided in writing to Anthem Insurance by the Voting Member a reasonable period of time prior to the mailing of the notice). The notice will be in a form satisfactory to the Commissioner.

(b) Such notice of the Special Meeting will be accompanied by a proxy form and information relevant to the Special Meeting, including a copy of this Plan and other explanatory information, all as set forth in Ind. Code 27-15-5-3.

ARTICLE XII

ADDITIONAL PROVISIONS

SECTION 12.1. Holders of Policies. The Holder of any Policy as of any date specified in the Plan will be determined by Anthem Insurance on the basis of Anthem Insurance’s records as of such date in accordance with the following provisions:

(a) The Holder of a Policy that is an individual insurance policy or health care benefits contract is the Person specified in such Policy as the policy or contract holder, unless no policy or contract holder is so specified, in which case the Holder of the Policy will be deemed to be the Person in whose name the application for the Policy was made.

(b) Except as provided in Section 12.1(c), the Holder of a Policy that is a group insurance policy or group health care benefits contract is the Person or Persons specified in such Policy as the policy or contract holder unless no policy or contract holder is so specified, in which case the Holder is the Person (other than Anthem Insurance) on whose behalf the policy or contract was executed.

(c) The Holder of a Policy that is a certificate of coverage or participation issued under a group insurance policy or health benefits contract issued to an Administrative Trust is (i) with respect to such a Policy issued prior to the Ohio Merger, the employer, association or individual to whom the certificate of coverage was issued under the policy or contract or (ii) with respect to such a Policy issued after the Ohio Merger, (A) in the case of a certificate of coverage issued to an employer or association, the participants to whom reimbursement benefits under the certificate of coverage are payable (or on whose behalf payments may be made to providers) or (B) in the case of a certificate of coverage issued to an individual, that individual. The trustee of any such trust shall not be a Statutory Member or a Holder.

(d) Except as provided in Section 12.1(c), the Holder of a Policy that is a certificate of coverage issued under a group insurance agreement or health care benefits contract is the Person specified in the certificate of coverage as the holder thereof unless no holder or certificate holder is so specified, in which case the Holder of such Policy will be deemed to be the Person to whom reimbursement benefits under the certificate of coverage are payable (or on whose behalf payments may be made to providers).

A-14 (e) In no event may there be more than one Holder of a Policy, although more than one Person may constitute a single Holder. If a Person holds a Policy with one or more other Persons, they will constitute a single Holder with respect to the Policy, and any consideration allocated in accordance with Article VII will be distributed jointly to or on behalf of such Persons.

(f) Except as otherwise set forth in this Section 12.1, the identity of the Holder of a Policy is determined by Anthem Insurance without giving effect to any interest of any other Person in such Policy.

(g) In any situation not expressly covered by the foregoing provisions of this Section 12.1, or as to which application of the foregoing provisions is unclear, the Holder of a Policy, as reflected on the records of Anthem Insurance and determined in good faith by Anthem Insurance, will be presumed to be the Holder of such Policy for purposes of this Section 12.1, and, except for administrative errors, Anthem Insurance will not be required to examine or consider any other facts or circumstances.

(h) The mailing address of a Holder as of any date for purposes of the Plan will be the Holder’s last known address as shown on the records of Anthem Insurance as of such date.

(i) Any dispute as to the identity of the Holder of a Policy or the right to vote or receive consideration will be determined in accordance with the foregoing or Ind. Code 27-15 or such other procedures as may be acceptable to the Commissioner.

SECTION 12.2. In Force. (a) A Policy will be deemed to be in force (“In Force”) as of any date if, as shown on Anthem Insurance’s records on such date, the effective date of such Policy occurs on or prior to such date, and as of such date the required premium has been received by Anthem Insurance and such Policy, as shown on Anthem Insurance’s records on such date, has not expired or otherwise been surrendered or terminated; provided that a Policy will be deemed to be In Force during any applicable grace period for non-payment of premiums as administered by Anthem Insurance.

(b) With respect to a Policy that is a certificate of coverage or participation issued under a group insurance policy or health care benefits contract issued to an Administrative Trust, the Policy will be deemed to be In Force as of any date if, as of such date, the Holder has requested and has been approved or deemed approved for participation in the Administration Trust or coverage is otherwise in effect under the Policy, as shown on Anthem Insurance’s records.

(c) Any dispute as to whether a Policy is In Force will be resolved in accordance with the foregoing or such other procedures as may be acceptable to the Commissioner.

SECTION 12.3. Confidentiality. Anthem Insurance will receive the confidential treatment of documents in accordance with Ind. Code 27-15-7 et seq.

SECTION 12.4. Acquisition of Ownership. Except for the acquisition by Anthem, Inc. of all of the outstanding capital stock of Anthem Insurance pursuant to Article II, for five years following the Effective Date of the Conversion no Person or Persons acting in concert (other than Anthem Insurance, Anthem, Inc., any other company that is directly or indirectly wholly-owned by Anthem, Inc., or any employee benefit plans or trusts sponsored by Anthem Insurance or Anthem, Inc.) may directly or indirectly acquire, or agree or offer to acquire, in any manner the beneficial ownership of five percent (5%) or more of the outstanding shares of any class of a voting security of Anthem Insurance or Anthem, Inc., otherthan in compliance with Ind. Code 27-15-13-2 or any regulations promulgated thereunder.

SECTION 12.5. Restriction on Stock to Directors and Executive Officers. For a period of six months following the Effective Date, neither Anthem, Inc. nor Anthem Insurance, nor any of their subsidiaries, will make any grants of Common Stock or options to purchase Common Stock to any director, executive officer or member

A-15 of a specified group of additional senior management executives (approximately 50 in number) of Anthem, Inc. and Anthem Insurance. The exercise price per share of any options to purchase Common Stock granted to any such persons at the expiration of such time will be not less than 100% of the fair market value of Common Stock on the date of the grant of such option.

SECTION 12.6. Trust. Pursuant to Ind. Code 27-15-12-1, all or part of the consideration to be distributed to Eligible Statutory Members may be delayed by more than six months following the Effective Date, but only by establishing one or more trusts for the purpose of holding assets on and following the Effective Date that are adequate to satisfy certain claims against Anthem Insurance and remaining unresolved on the Effective Date. Any such trust(s) will be effective and will hold assets on the Effective Date consisting of the consideration that otherwise would be distributed to affected Eligible Statutory Members. Any such trust(s), (a) will be in a form approved by the Commissioner, (b) will in all respects comply with the requirements of Ind. Code 27-15- 12-2, (c) will be upon terms and conditions that ensure that the transactions described in this Plan qualify as tax- free transactions within the meaning of Sections 351 and 368 of the Code and (d) will provide that neither the Eligible Statutory Members nor the other policyholders of Anthem Insurance are subject to any income tax from any income received by any such trust(s) without the consent of the Commissioner.

SECTION 12.7. Amendment or Withdrawal of Plan. This Plan may be modified, amended, withdrawn or terminated only in a manner consistent with the provisions of the Indiana Demutualization Law and by action of the majority of directors on the Board of Anthem Insurance. After this Plan has been approved by the Voting Members pursuant to Article XI, no modification, amendment, withdrawal or termination of this Plan will require further approval by the Voting Members unless such further approval is required by the Board or the Commissioner or by applicable law.

SECTION 12.8. Corrections. Anthem Insurance may, until the Effective Date, by an instrument executed by its President, Chief Executive Officer or any Executive Vice President, attested by its Secretary or Assistant Secretary under Anthem Insurance’s corporate seal and submitted to the Commissioner, make such modifications as are appropriate to correct errors, clarify existing items or make additions to correct manifest omissions in the Plan (including the Exhibits). Anthem Insurance may in the same manner also make such modifications as may be required by the Commissioner after the Public Hearing as a condition of approval of the Plan. No such correction or modification will require approval by the Voting Members unless such approval is required by the Board or the Commissioner. Subject to the terms of the Plan, Anthem, Inc. may issue additional shares of Common Stock and take any other action it deems appropriate to remedy errors or miscalculations made in connection with the Plan.

SECTION 12.9. Adjustment of Share Numbers. In order to effect a filing range (in the registration statement under the Securities Act of 1933, as amended, relating to the Public Offering) for the price of the Common Stock, Anthem Insurance may adjust, by vote of the Board or a duly authorized committee thereof at any time before the Effective Date and with the prior approval of the Commissioner, the number of shares of Common Stock set forth in the definition of Allocable Shares. Upon such an adjustment, the number of shares set forth in Section 7.1(a) as the fixed component of consideration will be adjusted proportionately; and the number of shares resulting from any such adjustment will be rounded up or down to the nearest whole share.

SECTION 12.10. Notices. If Anthem Insurance complies substantially and in good faith with the Indiana Demutualization Law with respect to any required notice to Statutory Members, its failure in any case to give the notice to any Person entitled to notice does not impair the validity of actions taken under the Indiana Demutualization Law or this Plan or entitle the Person to any injunctive or other relief.

SECTION 12.11. Costs and Expenses. Anthem Insurance will pay the expenses of any accountants, actuaries, attorneys, and other experts hired by the Commissioner to review any matter under the Indiana Demutualization Law with respect to this Plan.

A-16 SECTION 12.12. Captions and Headings. The captions and headings of this Plan have been inserted for convenience of reference only and will not affect the meaning or interpretation of this Plan.

SECTION 12.13. Governing Law. The terms of this Plan will be governed by and construed in accordance with the laws of the State of Indiana.

SECTION 12.14. Judicial Review. Pursuant to Ind. Code 27-15-15-2, all petitions for judicial review of, and any action challenging the validity of or arising out of the approval or disapproval of or any action proposed to be taken under any order or determination of the Commissioner in connection with this Plan must be filed not later than thirty (30) days after the order or determination is issued by the Commissioner.

SECTION 12.15. Stock Incentive Plan. On or before the Effective Date, Anthem, Inc. intends to adopt a stock incentive plan (the “Stock Plan”). The Stock Plan will allow for the grant of stock options, restricted stock, stock appreciation rights, performance stock and performance awards. Subject to the restrictions of Section 12.5, directors, executives and employees, as selected by the Compensation Committee of the Board of Directors of Anthem, Inc., will be eligible to participate in and receive grants or awards under the Stock Plan. The Compensation Committee will administer the Stock Plan and will have complete discretion to determine whether to grant incentive awards, the types of incentive awards to grant and any requirements and restrictions relating to incentive awards. The Stock Plan will reserve for issuance under its terms not more than five percent (5%) of the Common Stock outstanding after giving effect to both the Conversion and the Public Offering, plus it will reserve an additional up to two percent (2%) of the Common Stock so outstanding solely for issuance under grants of stock options that may be made to substantially all employees of Anthem Insurance and its subsidiaries (and for issuance under similar grants that may be made to new employees of Anthem Insurance or its subsidiaries). The exercise price per share of any options to purchase Common Stock granted under the Stock Plan will be not less than 100% of the fair market value of Common Stock on the date of the grant of such option. No options granted under the Stock Plan will be exercisable more than ten years after the date of grant.

ARTICLE XIII

DEFINITIONS

SECTION 13.1. General Terms. For all purposes of this Plan, except as otherwise expressly provided or unless the context otherwise requires: (1) The terms defined in this Article XIII will, when used in this Plan, have the meanings assigned to them in this Article XIII and include the plural as well as the singular. (2) The words “herein,”“hereof,”“hereunder” and other words of similar import refer to this Plan as a whole and not to any particular article, section, subsection or other subdivision.

SECTION 13.2. Specific Terms. For all purposes of this Plan, except as otherwise expressly provided, the following terms will have the meanings set forth below:

“Actuarial Contribution” shall mean, with respect to a particular Eligible Statutory Member, the contributions to Anthem Insurance’s statutory surplus, as calculated according to the principles, assumptions and methodologies set forth in this Plan and the Actuarial Contribution Memorandum, by all Policies (a) of which the Eligible Statutory Member has been the Holder through the Effective Date, and (b) under which the Eligible Statutory Member has had continuous health care benefits coverage with the same company (or the predecessor company from which its business was assumed in a merger described in Preliminary Statement C of this Plan) without a break of more than one day.

“Actuarial Contribution Date” shall mean June 30, 2000.

“Actuarial Contribution Memorandum” shall have the meaning specified in Section 7.3(a).

A-17 “Administrative Trust” shall mean certain trusts established for the administrative convenience of the insurer, all of which were established by Community Mutual Insurance Company or Community Insurance Company.

“Adoption Date” shall have the meaning specified in the first paragraph of this Plan.

“Aggregate Fixed Component” shall have the meaning specified in Section 7.2.

“Aggregate Variable Component” shall have the meaning specified in Section 7.2.

“Allocable Shares” shall have the meaning specified in Section 5.1.

“Anthem Insurance” shall have the meaning specified in the first paragraph of this Plan.

“Anthem, Inc.” shall have the meaning specified in Section 1.2.

“Annual Statement” shall mean the financial statement required to be filed with the Commissioner under Ind. Code 27-1-20-21.

“Application” shall have the meaning set forth in Section 10.1.

“Articles Amendment” shall have the meaning set forth in Section 1.3.

“Board” shall have the meaning specified in the first paragraph of this Plan.

“Code” shall have the meaning specified in Section 1.1.

“Commissioner” shall mean the Commissioner of Insurance of the State of Indiana, or a governmental officer, body, or authority as may after the date hereof succeed the Commissioner as the primary regulator of Anthem Insurance’s financial condition under applicable law.

“Common Stock” shall mean the voting common stock of Anthem, Inc.

“Conversion” shall have the meaning specified in Preliminary Statement A in this Plan.

“DOL Exemption” shall have the meaning set forth in Section 1.5(a).

“Effective Date” shall mean the date on which the Conversion contemplated by this Plan becomes effective in accordance with the Indiana Demutualization Law and Section 1.3.

“Eligible Statutory Member” shall mean a Person who (a) is a Statutory Member of Anthem Insurance on the Adoption Date and continues to be a Statutory Member of Anthem Insurance on the Effective Date, and (b) has had continuous health care benefits coverage with the same company during the period between those two dates under any Policy or Policies without a break of more than one day.

“Equity Share” shall have the meaning specified in Section 7.3(b)(ii).

“ERISA” shall have the meaning specified in Section 1.5(a).

“Financial Advisor” shall mean Goldman, Sachs & Co. or any other investment banking firm that shall be acceptable to the Commissioner.

“Guaranty Policy” shall mean the individual or group guaranty insurance policies issued by Anthem Insurance at the time of or following and pursuant to the terms of Anthem Insurance’s 1993 merger with Southeastern Mutual Insurance Company, Anthem Insurance’s 1995 merger with the Community Mutual Insurance Company, and Anthem Insurance’s 1997 merger with Blue Cross & Blue Shield of Connecticut, Inc.

A-18 “Holder” shall mean with respect to any Policy, the Person or Persons specified or determined pursuant to Section 12.1.

“In Force” shall have the meaning specified in Section 12.2.

“Indiana Demutualization Law” shall have the meaning specified in Preliminary Statement A of this Plan.

“IPO Price” shall have the meaning specified in Section 6.3.

“Membership Interests” shall mean (i) the voting rights of Statutory Members of Anthem Insurance as provided by law and by Anthem Insurance’s Articles of Incorporation and Bylaws; and (ii) the rights of Statutory Members of Anthem Insurance to receive cash, stock, or other consideration in the event of a conversion to a stock insurance company under the Indiana Demutualization Law or a dissolution under Ind. Code 27-1-10, as provided by those laws and by Anthem Insurance’s Articles of Incorporation and Bylaws.

“Ohio Merger” shall mean the merger in 1995 of Community Mutual Insurance Company with and into Anthem Insurance.

“Other Capital Raising Transactions” shall have the meaning specified in Section 1.6(c).

“Person” shall mean an individual, corporation, limited liability company, joint venture, partnership, association, trust, trustee, unincorporated entity, organization or government or any department or agency thereof. A Person who is a Holder of Policies in more than one legal capacity (e.g. a trustee under separate trusts) will be deemed to be a separate Person in each such capacity.

“Plan” shall have the meaning specified in the first paragraph of this Plan.

“Policy” shall mean: (a) any individual insurance policy or health care benefits contract that has been issued by Anthem Insurance and under which the Holder thereof is a member of Anthem Insurance with Membership Interests; (b) any certificate issued by Anthem Insurance under a group insurance policy or health care benefits contract under which certificate the Holder thereof is a member of Anthem Insurance with Membership Interests; or (c) certificates of membership issued by Anthem Insurance in or under Guaranty Policies under which certificate the Holder thereof is a member of Anthem Insurance with Membership Interests. “Policy” shall also be deemed to mean and include certain certificates of coverage or participation issued under a group insurance policy or health care benefits contract issued to an Administrative Trust, in accordance with Section 12.1(c).

“Public Hearing” shall have the meaning specified in Section 10.2.

“Special Meeting” shall have the meaning specified in Section 11.1.

“Statutory Member” shall mean as of any specified date any Person who, in accordance with the records, articles of incorporation and by-laws of Anthem Insurance, is the Holder of an In Force Policy.

“Stock Plan” shall have the meaning specified in Section 12.15.

“Tax Opinion” shall mean an opinion of a nationally recognized tax counsel or a firm of certified public accountants selected by Anthem Insurance.

“United States” shall mean the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico and Territories of the United States within the meaning of Section 2(6) of the Securities Act.

A-19 Exhibits and Summaries of Exhibits to the Plan of Conversion

The following Exhibits and Summaries of Exhibits to the Plan are qualified in their entirety by reference to the complete text of such Exhibits. Complete copies of the Exhibits to the Plan are available by calling our Demutualization Information Center toll-free at 1-866-299-9628 between the hours of 8:00 a.m. and 5:00 p.m. Eastern Standard Time, or by writing to Anthem Insurance Companies, Inc., c/o Equiserve Trust Company, P.O. Box 8909, Edison, New Jersey 08818-8909.

Capitalized terms used in the summary of a particular Exhibit and not otherwise defined therein shall have the meanings ascribed to them in the complete text of such Exhibit.

A-20 EXHIBIT A-1

SUMMARY OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF ANTHEM INSURANCE COMPANIES, INC.

SUMMARY The following summary of the Amended and Restated Articles of Incorporation of Anthem Insurance Companies, Inc. (the “Corporation”) is qualified in its entirety by reference to the complete Amended and Restated Articles of Incorporation of the Corporation, a copy of which immediately follows this summary:

ARTICLE I—Name Article I provides that the name of the Corporation is Anthem Insurance Companies, Inc.

ARTICLE II—Address and Registered Agent Article II provides the post office address of the Corporation’s principal office, 120 Monument Circle, Indianapolis, Indiana 46204, and the name and address of the Corporation’s registered agent, Nancy L. Purcell, 120 Monument Circle, Indianapolis, Indiana 46204.

ARTICLE III—Purposes and Powers; Plan or Principle Article III provides that the Corporation has been formed to make or write the kinds of insurance and reinsurance in Classes 2 and 3 under Section 27-1-5-1 of the Indiana Insurance Law, and to do all things necessary and appropriate for carrying on the business of such an insurance company.

ARTICLE IV—Period of Existence Article IV provides that the term for which the Corporation is to continue as a corporation shall be perpetual.

ARTICLE V—Capital Stock Article V provides that the Corporation shall have authority to issue up to Five Hundred Million (500,000,000) shares of Common Stock, with a par value per share of One Dollar ($1.00). Upon effectiveness of the Amended and Restated Articles of Incorporation, the Corporation will have issued and outstanding a total of One Hundred Million (100,000,000) shares of its Common Stock and additional paid-in capital or additional paid-in surplus in respect of that issued and outstanding Common Stock of not less than ($ ).

ARTICLE VI—Incorporators, Officers and Directors Article VI provides information about the name, occupation and post office address of each of the incorporators, officers and Directors as of the effectiveness of the Amended and Restated Articles of Incorporation.

ARTICLE VII—Board of Directors Article VII provides that the business of the Corporation shall be managed by a Board of Directors, and that the Board shall be comprised of not be less than five (5) nor more than nineteen (19) Directors. The number of Directors at the time of effectiveness of the Amended and Restated Articles of Incorporation is thirteen (13).

A-21 Article VII also provides the method for filling any vacancy on the Board created by the death or resignation of any Director, and the method of removing any Director.

Article VII lastly provides that the Board of Directors shall have the exclusive power to make, alter, amend, repeal or waive provisions of the By-Laws of the Corporation, in the manner provided therein.

ARTICLE VIII—Meetings of Shareholders Article VIII provides that all meetings of shareholders shall be held at the place, within or without the State of Indiana, designated by the Board of Directors or the other persons calling the meeting.

Article VIII also provides that any action required or permitted to be taken at any meeting of the shareholders may be taken without a meeting, if the action is taken, in writing, and signed by all shareholders entitled to vote on the action.

ARTICLE IX—Indemnification Article IX provides that the Corporation must, to the fullest extent provided under Indiana Insurance Law, indemnify every Director, officer or employee of the Corporation and its subsidiaries and affiliates from certain claims and expenses arising while that person was serving as a Director, officer or employee of the Corporation or one of its subsidiaries or affiliates at the request of the Corporation.

ARTICLE X—Amendment of Articles Article X provides that the Corporation may amend, alter, change, add or repeal any provision contained in the Amended and Restated Articles of Incorporation in the manner prescribed or permitted by the provisions of the Indiana Insurance Law or any other applicable statute of the State of Indiana.

A-22 EXHIBIT A-2 AMENDED AND RESTATED ARTICLES OF INCORPORATION OF ANTHEM INSURANCE COMPANIES, INC.

Anthem Insurance Companies, Inc. (hereinafter referred to as the “Corporation”), duly existing under the Indiana Insurance Law and desiring to amend and restate its Articles of Incorporation in connection with its conversion from a mutual insurance company to a stock insurance company under the Indiana Demutualization Law, submits the following Amended and Restated Articles of Incorporation:

ARTICLE I

NAME

The name of the Corporation is Anthem Insurance Companies, Inc.

ARTICLE II

ADDRESS AND REGISTERED AGENT

The post office address of the Corporation’s principal office at the time of the effectiveness of these Amended and Restated Articles of Incorporation is 120 Monument Circle, Indianapolis, Indiana 46204. The name and address of the Corporation’s registered agent at the time of effectiveness of these Amended and Restated Articles of Incorporation is Nancy L. Purcell, 120 Monument Circle, Indianapolis, Indiana 46204.

ARTICLE III

PURPOSES AND POWERS;PLAN OR PRINCIPLE

SECTION 3.1. Purposes and Powers. The purpose or purposes for which the Corporation has been formed are as follows: to make or write all or any one or more of the kinds of insurance and reinsurance comprised in any one of Classes 2 and 3 under Section 27-1-5-1 of the Indiana Insurance Law, including, but not limited to, insurance for hospitalization expenses, medical and surgical expenses, illness expenses, and any and all other health care expenses to the extent fixed in coverage certificates and contracts, such insurance being in Class 2(a) under Section 27-1-5-1 of the Indiana Insurance Law, and to do all things necessary and appropriate for carrying on the business of such an insurance company. The Corporation shall have and may exercise all of the rights, privileges and powers set forth in Section 27-1-7-2 of the Indiana Insurance Law, and as otherwise authorized by the Indiana Insurance Law, and shall have the power to do all acts and things necessary, convenient or expedient to carry out the purposes for which it was formed.

SECTION 3.2. Plan or Principle. The plan or principle upon which the business of the Corporation is to be conducted in the State of Indiana and other states is as follows: (a) To inaugurate, operate and maintain hospital service plans by which hospitalization will be furnished to those in need of hospital service who obtain coverage certificates or contracts from this Corporation, to the extent provided in such certificates or contracts. (b) To enter into contracts with hospitals for such hospitals to furnish hospital care to those entitled to it under the terms of the coverage certificates or contracts of the Corporation.

A-23 (c) To enter into contracts of insurance providing for hospital care for persons named in the applications for coverage, with an assignment from such persons by which payments thereunder shall be made directly to the hospitals which render the service and not to the beneficiaries named in the service contracts. (d) To carry on business as a voluntary employee beneficiary association for the payment of hospital expenses to the extent provided in the service contracts or policies. (e) To develop and conduct an indemnity plan of insurance against the cost of medical and surgical care, and to operate under the Indiana Insurance Law as a stock insurance company on the indemnity plan, and to be the instrumentality through which prepayment for medical and surgical care may be arranged for those who are covered by the Corporation. (f) To issue policies in the form of coverage certificates, as approved by the appropriate state departments of insurance, to those who obtain insurance in the Corporation. (g) To issue policies guaranteeing the payment of medical, surgical, hospital and other health care benefits to persons who are entitled to such benefits under contracts with insurance companies, health maintenance, preferred provider, or similar organizations owned by or affiliated with the Corporation. (h) To do all things necessary and appropriate for carrying on the business of such an insurance company, and to exercise all of the general rights and privileges and powers authorized by the Indiana Insurance Law. (i) To enter into contracts of insurance and issue coverage certificates for all or any one or more of the kinds of insurance and reinsurance comprised in any one of Classes 2 and 3 of Section 27-1-5-1 of the Indiana Insurance Law, including, but not limited to, insurance providing for the payment of hospitalization expenses, medical and surgical expenses, illness expenses, and any and all other health care expenses.

ARTICLE IV

PERIOD OF EXISTENCE

The term for which the Corporation is to continue as a corporation shall be perpetual.

ARTICLE V

CAPITAL STOCK

Upon effectiveness of these Amended and Restated Articles of Incorporation, the Corporation shall have authority to issue up to Five Hundred Million (500,000,000) shares of capital stock, which shall be of one class and kind any may be referred to as Common Stock. Each share of Common Stock shall have a par value of One Dollar ($1.00). Upon effectiveness of these Amended and Restated Articles of Incorporation, and pursuant to the Corporation’s conversion from a mutual to a stock company under the Indiana Demutualization Law, the Corporation has issued and outstanding a total of One Hundred Million (100,000,000) shares of its Common Stock and has an additional paid-in capital or additional paid-in surplus in respect of that issued and outstanding Common Stock of not less than ($ ).

A-24 ARTICLE VI

INCORPORATORS,OFFICERS AND DIRECTORS

SECTION 6.1. Original Incorporators, Officers and Directors. The name, occupation and post office address of each of the incorporators, officers and Directors at the time of the original incorporation of the Corporation in 1944 is included within the original incorporation documents of the Corporation, which are hereby incorporated by reference.

SECTION 6.2. Current Directors. The name, occupation and post office address of each Director of the Corporation as of the effectiveness of these Amended and Restated Articles of Incorporation are as follows:

Name Occupation Address

[Insert information prior to filing]

SECTION 6.3. Current Officers. The name, title and post office address of each officer of the Corporation as of the effectiveness of these Amended and Restated Articles of Incorporation are as follows:

Name Title Address

[Insert information prior to filing]

ARTICLE VII

BOARD OF DIRECTORS

SECTION 7.1. Management. The business of the Corporation shall be managed by a Board of Directors. The Directors shall have all of the qualifications, powers and authority and shall be subject to all limitations as set forth in the Indiana Insurance Law. The number of Directors of the Corporation shall not be less than five (5) nor more than nineteen (19), the exact number to be specified from time to time in the manner provided by the Corporation’s By-Laws. The number of Directors at the time of effectiveness of these Amended and Restated Articles of Incorporation is thirteen (13).

SECTION 7.2. Vacancy. Any vacancy on the Board of Directors caused by resignation, removal, death or other incapacity or increase in the number of Directors may be, at the discretion of the Board, filled by a majority vote of the remaining Directors, or left unfilled until the next meeting of shareholders. The failure of the Board of Directors or the shareholders to fill one or more vacancies on the Board of Directors or to elect a full Board of Directors shall not in any way prevent or restrict the Board of Directors from exercising the powers of the Corporation or from directing its business and affairs.

SECTION 7.3. Removal of Directors. Any one or more of the members of the Board of Directors may be removed only at a meeting of the shareholders or Directors called expressly for that purpose. Removal by the shareholders requires an affirmative vote of the holders of outstanding shares representing at least two-thirds (2/3) of all the votes then entitled to be cast at an election of Directors. Removal by the Board of Directors requires an affirmative vote of at least two-thirds (2/3) of all Directors. No Director may be removed except as provided in this Section 7.3.

SECTION 7.4. By-Laws. The Board of Directors shall have the exclusive power to make, alter, amend or repeal, or to waive provisions of, the By-Laws of the Corporation, in the manner provided therein.

A-25 ARTICLE VIII

MEETINGS OF SHAREHOLDERS

SECTION 8.1. Shareholder Meetings. All meetings of shareholders shall be held at such place, within or without the State of Indiana, as designated by the Board of Directors or the other persons calling the meeting.

SECTION 8.2. Action Without Meeting. Any action required or permitted to be taken at any meeting of the shareholders may be taken without a meeting, if the action is taken by all shareholders entitled to vote on the action. The action must be evidenced by one or more written consents describing the action taken, signed by each shareholder and delivered to the Corporation for inclusion in the minutes for filing with the corporate records. The record date for determining the shareholders entitled to take action without a meeting is the date the first shareholder signs the consent. Action taken under this section is effective when the last shareholder signs the consent, unless the consent specifies a different prior or subsequent effective date, in which case the action is effective on or as of the specified date. Such consent shall have the same affect as a unanimous vote of all shareholders and may be described as such in any document.

ARTICLE IX

INDEMNIFICATION

SECTION 9.1. Indemnification. The Corporation shall indemnify every Eligible Person (certain capitalized terms used in this Article IX are defined below) against all Liability and Expense that may be incurred by him or her in connection with or resulting from any Claim to the fullest extent authorized or permitted by the Indiana Insurance Law, as the same exists or may hereafter be amended (but in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), or otherwise consistent with the public policy of the State of Indiana. In furtherance of the foregoing, and not by way of limitation, every Eligible Person shall be indemnified by the Corporation against all Liability and reasonable Expense that may be incurred by him or her in connection with or resulting from any Claim, (a) if such Eligible Person is Wholly Successful, on the merits or otherwise, with respect to the Claim, or (b) if not Wholly Successful, then if such Eligible Person is determined to have acted in good faith, in what he or she reasonably believed to be the best interests of the Corporation or at least not opposed to its best interests and, in addition, with respect to any criminal Claim is determined to have had reasonable cause to believe that his or her conduct was lawful or had no reasonable cause to believe that his or her conduct was unlawful. The termination of any Claim, by judgment, order, settlement (whether with or without court approval), or conviction or upon a plea of guilty or of nolocontendere, or its equivalent, shall not create a presumption that an Eligible Person did not meet the standards of conduct set forth in clause (b) of this Section 9.1. The actions of an Eligible Person with respect to an employee benefit plan subject to the Employee Retirement Income Security Act of 1974 shall be deemed to have been taken in what the Eligible Person reasonably believed to be the best interests of the Corporation or at least not opposed to its best interest if the Eligible Person reasonably believed he or she was acting in conformity with the requirements of such Act, or he or she reasonably believed his or her actions to be in the interests of the participants in or beneficiaries of the plan.

SECTION 9.2. Definitions. (a) The term “Claim” as used in this Article IX shall include every pending, threatened or completed claim, action, suit or proceeding and all appeals thereof (whether brought by or in the right of this Corporation or any other corporation or otherwise), civil, criminal, administrative or investigative, formal or informal, in which an Eligible Person may become involved as a party or otherwise (i) by reason of his or her being or having been an Eligible Person, or (ii) by reason of any action taken or not taken by him or her in his or her capacity as an Eligible Person, whether or not he or she continued in such capacity at the time such Liability or Expense shall have been incurred.

A-26 (b) The term “Eligible Person” as used in this Article IX shall mean every person (and the estate, heirs and personal representatives of such person) who is or was a Director, officer or employee of the Corporation or who, while a Director, officer or employee of the Corporation, is or was serving at the request of the Corporation as a Director, officer, partner, trustee, employee, member, manager, agent or fiduciary of any other corporation, partnership, joint venture, trust, employee benefit plan, limited liability company or other organization or entity, whether for profit or not. An Eligible Person shall also be considered to have been serving as a Director, officer, trustee, employee, agent or fiduciary of an employee benefit plan at the request of the Corporation if his or her duties to the Corporation also imposed duties on, or otherwise involved services by, him or her to the plan or to participants in or beneficiaries of the plan. (c) The terms “Liability” and “Expense” as used in this Article IX shall include, but shall not be limited to, counsel fees and disbursements and amounts of judgments, fines or penalties against (including excise taxes assessed with respect to an employee benefit plan), and amounts paid in settlement by or on behalf of, an Eligible Person. (d) The term “Wholly Successful” as used in this Article IX shall mean (i) termination of any Claim, whether on the merits or otherwise, against the Eligible Person in question without any finding of liability or guilt against him or her, (ii) approval by a court or agency, with knowledge of the indemnity herein provided, of a settlement of any Claim, or (iii) the expiration of a reasonable period of time after the threatened making of any Claim without commencement of an action, suit or proceeding and without any payment or promise made to induce a settlement. (e) As used in this Article IX, the term “Corporation” includes all constituent entities in a consolidation or merger and the new or surviving corporation of such consolidation or merger so that any Eligible Person who is or was a Director, officer or employee of such a constituent entity, or is or was serving at the request of such constituent entity as a Director, officer, partner, trustee, employee, member, manager, agent or fiduciary of any other corporation, partnership, joint venture, trust, employee benefit, limited liability company or other organization or entity, whether for profit or not, shall stand in the same position under this Article XI with respect to the new or surviving corporation as he would if he had served the new or surviving corporation in the same capacity.

SECTION 9.3. Advancement of Expenses. Expenses incurred by an Eligible Person who is a Director of the Corporation in defending any Claim shall be paid by the Corporation in advance of the final disposition of such Claim promptly as they are incurred upon receipt of an undertaking by or on behalf of such Eligible Person to repay such amount if he or she is determined not to be entitled to indemnification. Expenses incurred by any other Eligible Person with respect to any Claim may be advanced by the Corporation (by action of the Board of Directors, whether or not a disinterested quorum exists) prior to the final disposition thereof upon receipt of an undertaking by or on behalf of the Eligible Person to repay such amount if he or she is determined not to be entitled to indemnification.

SECTION 9.4. Non-Exclusivity. The rights of indemnification and advancement of expenses provided in this Article IX shall be in addition to any rights to which any Eligible Person may otherwise be entitled. The Board of Directors may, at any time and from time to time, (i) approve indemnification of any Eligible Person to the fullest extent authorized or permitted by the provisions of applicable law or otherwise consistent with the public policy of the State of Indiana, whether on account of past or future transactions, and (ii) authorize the Corporation to purchase and maintain insurance on behalf of any Eligible Person against any Liability or Expense asserted against or incurred by him or her in such capacity or arising out of his or her status as an Eligible Person, whether or not the Corporation would have the power to indemnify him or her against such Liability or Expense.

SECTION 9.5. Contract. The provisions of this Article IX shall be deemed to be a contract between the Corporation and each Eligible Person, and an Eligible Person’s rights hereunder shall not be diminished or otherwise adversely affected by any repeal, amendment or modification of this Article IX that occurs subsequent to such person becoming an Eligible Person.

A-27 ARTICLE X

AMENDMENT OF ARTICLES

The Corporation reserves the right to amend, alter, change or repeal any provision contained in these Amended and Restated Articles of Incorporation or in any amendment hereto or to add any provision to these Amended and Restated Articles of Incorporation or to any amendment hereto in any manner now or hereafter prescribed or permitted by the provisions of the Indiana Insurance Law as from time to time in effect or by the provisions of any other applicable statute of the State of Indiana; and all rights conferred upon shareholders in these Amended and Restated Articles of Incorporation or any amendment hereto are granted subject to this reservation.

A-28 EXHIBIT B

SUMMARY OF THE AMENDED AND RESTATED BY-LAWS OF ANTHEM INSURANCE COMPANIES, INC.

SUMMARY

ARTICLE I—Meetings of the Shareholders Article I provides that the annual meeting of the shareholders of the Corporation for the election of Directors and other proper business shall be held within the first five (5) months of each year, on the date and at the time and place designated by the Board of Directors.

Article I also provides for the calling of special meetings of the shareholders by the President, Board of Directors, the Chairman of the Board or the shareholders as provided by law, and specifies the requirements for giving written or printed notice of shareholders’ meetings.

Article I provides that the holders of a majority of the shares then issued and outstanding and entitled to vote constitutes a quorum for the transaction of business at any meeting, except as otherwise required by law, and also provides for adjournments of meetings in case a quorum is not present.

Lastly, Article I provides that any Shareholder entitled to vote may vote by proxy.

ARTICLE II—Directors Article II provides that the number of Directors shall be as prescribed by the Corporation’s Amended and Restated Articles of Incorporation.

Article II also provides that the Directors shall be divided into three (3) groups as nearly equal in number as possible, with staggered terms of office, and with the term of office of the first group to expire at the 2002 annual meeting of shareholders, the term of office of the second group to expire at the 2003 annual meeting of shareholders, and the term of office of the third group to expire at the 2004 annual meeting of shareholders.

Article II further provides for the qualifications and eligibility of persons to serve as Directors of the Corporation, and provides procedures for the election of Directors.

Article II provides for annual and, when necessary, special meetings of Directors, provides that all meetings of the Directors shall be held at the principal office of the Corporation or at such other place as may be designated by the Chairman of the Board or the Chief Executive Officer or approved by the Board of Directors and provides procedures for the conduct of Director meetings. Article II also provides that a majority of the whole Board of Directors shall be necessary to constitute a quorum for the transaction of any business, and provides for the required vote of Directors on certain issues related to the management of the Corporation.

Article II finally provides procedures for the filling of vacancies on the Board of Directors and outlines the duties of Directors.

ARTICLE III—Officers Article III provides that the officers of the Corporation shall be the Chairman of the Board, Chief Executive Officer, President, Secretary and Treasurer, each of whom shall be elected by the Board of Directors. Any

A-29 two (2) or more offices may be held by the same person, except that the person holding the office of Secretary shall not hold the office of either Chairman, Chief Executive Officer or President. The Chief Executive Officer shall have the authority to appoint Vice Presidents, Assistant Secretaries and Assistant Treasurers, if necessary.

Article III provides that the officers of the Corporation shall be elected by the Board of Directors, for a term of one (1) year and or until their successors are duly elected and shall have qualified. Only members of the Board of Directors shall be eligible for election to the offices of Chairman of the Board and Chief Executive Officer.

Also, any officer elected by the Board of Directors may be removed by the Board of Directors, upon recommendation of the Chief Executive Officer that such removal is in the best interests of the Corporation.

Article III lastly provides that the Board of Directors may fill vacancies on the Board for the unexpired term of the vacancy, with due consideration given to the recommendation of the Chief Executive Officer.

ARTICLE IV—Duties of Officers Article IV provides for the duties of the officers of the Corporation.

The Chairman of the Board shall preside at all meetings of the Board of Directors and of the shareholders and shall also perform such other duties as may be required by law or as may be delegated to him or her by the Board of Directors.

The Chief Executive Officer of the Corporation shall have direct management authority and responsibility over the business and affairs of the Corporation, subject only to policy decisions of the Board of Directors. The Chief Executive Officer shall also perform such other duties as may be required by law or as may be delegated to him or her by the Board of Directors.

The President shall perform such duties as may be required by law or as may be delegated to him or her by the Board of Directors or by the Chief Executive Officer.

The Treasurer shall have the care and custody of and be responsible for funds and securities of the Corporation, which must be deposited in banks and depositories designated by the Board of Directors. The Treasurer shall direct the keeping of a record of all receipts and disbursements and shall have prepared a report to be presented at the annual meeting of the shareholders.

The Secretary of the Corporation shall keep the minutes of all meetings of the shareholders, the Board of Directors, and all Board Committees. The Secretary shall attend to the giving and receiving of all notices of the Corporation. The Secretary shall perform such other duties as may be required by law or as may be delegated to him or her from time to time by the Board of Directors or by superior officers of the Corporation.

ARTICLE V—Execution of Instruments The Board of Directors shall designate the officers of the Corporation that may execute bills, notes, checks, vouchers, orders, contracts, deeds and mortgages or any other written instruments on behalf of the Corporation shall be executed. In the absence of such designation, the Chief Executive Officer shall be authorized to execute all such documents and instruments.

ARTICLE VI—Committees The Board of Directors may appoint three (3) or more members to an Executive Committee. The Executive Committee shall, subject to certain restrictions, be authorized to exercise the authority of the full Board of

A-30 Directors at any times other than during regular or special meetings of the Board of Directors. Members of the Executive Committee shall serve at the pleasure of the Board of Directors.

The Board of Directors may appoint additional committees, including a Compensation Committee, an Audit Committee, a Planning Committee, a Board Governance and Executive Development Committee, and other committees. Article VI provides for the duties and limitations of such committees, all of which shall serve at the pleasure of the Board of Directors.

ARTICLE VII—Fiscal Year The fiscal year of the Corporation shall be the calendar year.

ARTICLE VIII—Financial Reports At a regular meeting of the Board of Directors following the end of each fiscal quarter, and at such other intervals as the Board may direct, a financial report shall be made to the Board by the Chief Financial Officer, the Treasurer and/or Assistant Treasurer showing a balance sheet, a statement of operations and the manner in which the assets are invested. At the annual meeting of the shareholders, the Chief Financial Officer, the Treasurer and/ or Assistant Treasurer shall submit a report, verified by the independent certified public accountants, showing the financial condition and results of operations of the Corporation for the preceding calendar year.

ARTICLE IX—Stock Article IX provides that the shares of the Corporation may be represented by certificates, or if the Board of Directors provides, by uncertificated shares. Any certificates shall be signed by the Chief Executive Officer or the President and by the Secretary or an Assistant Secretary.

Article IX also provides procedures for the transfers of shares on the books of the Corporation, procedures for dealing with lost or destroyed stock certificates, and for the keeping of shareholder and stock transfer records. The Board of Directors may appoint one or more transfer agents and one or more registrars and may require each stock certificate to bear the signature of either or both.

ARTICLE X—Amendment The Amended and Restated By-Laws may be altered, amended or repealed by the affirmative action of two- thirds ( 2⁄3) of the Directors attending any meeting of the Board, when quorum requirements are met, whether regular or special, provided notice pursuant to Sections 2.5 or 2.6, as the case may be, shall have been given in advance of the meeting of the intent to so alter, amend or repeal, stating in such notice the action proposed to be taken.

A-31 EXHIBIT C

SUMMARY OF THE ARTICLES OF INCORPORATION OF ANTHEM, INC.

SUMMARY

ARTICLE I—Name The name of the Corporation is Anthem, Inc.

ARTICLE II—Purposes and Powers The Corporation is formed to engage in the transaction of any or all lawful business for which corporations may be incorporated under the Indiana Business Corporation Law (the “Corporation Law”). The Corporation shall have all powers now or hereafter authorized by or vested in corporations pursuant to the provisions of the Corporation Law, by common law or any other statute or act, and by or vested in the Corporation by the provisions of the Articles of Incorporation or By-Laws.

ARTICLE III—Term of Existence The period during which the Corporation shall continue is perpetual.

ARTICLE IV—Registered Office and Agent The address of the Corporation’s registered office is 120 Monument Circle, Indianapolis, Indiana 46204, and the name of its Resident Agent at such office is Nancy Purcell.

ARTICLE V—Authorized Shares The Corporation has authority to issue one billion (1,000,000,000) shares, consisting of nine hundred million (900,000,000) shares of common stock, $0.01 par value per share (the “Common Stock”), and one hundred million (100,000,000) shares of preferred stock, without par value (the “Preferred Stock”). Shares may be disposed of, issued, and sold to such persons, firms, or corporations as the Board of Directors may determine, without any preemptive right on the part of the owners or holders of other shares.

The Corporation shall have the power to declare and pay dividends or other distributions upon the issued and outstanding shares of the Corporation, subject to certain limitations. Except as otherwise provided in the Articles of Incorporation, the Corporation shall have the power to issue shares of one class or series as a dividend or other distribution in respect of that class or series or one or more other classes or series.

Except as otherwise provided by the Corporation Law, shares of Common Stock have unlimited voting rights. Shares of Common Stock shall not have cumulative voting rights. Except as required by the Corporation Law or by the provisions of the Articles of Incorporation, shares of Preferred Stock shall have no voting rights or powers.

Subject to the rights of the holders of any outstanding Preferred Stock, the holders of Common Stock shall be entitled to share ratably in dividends or other distributions, if any, declared and paid from time to time at the discretion of the Board of Directors.

In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment shall have been made to the holders of the Preferred Stock, the holders of Common Stock shall be entitled, to the exclusion of the holders of the Preferred Stock of any and all series, to share, ratably, in all remaining assets of the Corporation available for distribution to its shareholders.

A-32 ARTICLE VI—Directors The number of Directors of the Corporation shall not be less than five (5) nor more than nineteen (19). The Board of Directors at the time of adoption of the Articles of Incorporation is composed of thirteen (13) members. The By-Laws shall provide for staggering the terms of the members of the Board of Directors by dividing the total number of Directors into three (3) groups (with each group containing one-third (a) of the total, as near as may be) whose terms of office expire at different times. Directors need not be shareholders of the Corporation or residents of this or any other state in the United States. Vacancies occurring in the Board of Directors shall be filled in the manner provided in the By-Laws or, if the By-Laws do not so provide, in the manner provided by the Corporation Law.

A Director’s responsibility to the Corporation shall be limited to discharging his or her duties as a Director, including his or her duties as a member of any committee of the Board of Directors upon which he or she may serve, in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the Director reasonably believes to be in the best interests of the Corporation.

A Director shall not be liable for any action taken as a Director, or any failure to take any action, unless (a) the Director has breached or failed to perform the duties of the Director’s office, and (b) the breach or failure to perform constitutes willful misconduct or recklessness. Members of the Board of Directors may be removed only at a meeting of the shareholders or Directors called expressly for that purpose.

ARTICLE VII—Provisions for Regulation of Business and Conduct of Affairs of Corporation Meetings of the shareholders of the Corporation shall be held at such time and at such place, either within or without the State of Indiana, as may be stated in or fixed in accordance with the By-Laws of the Corporation. Special meetings of the shareholders may be called at any time only by the Board of Directors or the officers authorized to do so by the By-Laws. Shareholders of the Corporation shall not be authorized to call a special meeting of shareholders.

Unless the Indiana Business Corporation Law provides otherwise, at all meetings of shareholders, twenty- five percent (25%) of the votes entitled to be cast on a matter, represented in person or by proxy, constitutes a quorum for action on the matter.

Meetings of the Board of Directors of the Corporation shall be held at such place, either within or without the State of Indiana, as may be authorized by the By-Laws.

Any action required or permitted to be taken at any meeting of the Board of Directors or shareholders, or of any committee of such Board, may be taken without a meeting, if the action is taken, with written consents, by all members of the Board or all shareholders entitled to vote on the action, or by all members of such committee, as the case may be.

The Board of Directors shall have the exclusive power to make, alter, amend, repeal or waive provisions of, the By-Laws of the Corporation.

A conflict of interest transaction is a transaction with the Corporation in which a Director of the Corporation has a direct or indirect interest. A conflict of interest transaction is not voidable by the Corporation if the material facts of the transaction and the Director’s interest were disclosed or known to the Board of Directors and the Board authorized, approved, or ratified the transaction; the material facts of the transaction and the Director’s interest were disclosed or known to the shareholders entitled to vote and they authorized, approved, or ratified the transaction; or the transaction was fair to the Corporation.

Shareholders of the Corporation are not personally liable for the acts or debts of the Corporation, nor is private property of shareholders subject to the payment of corporate debts.

A-33 The Corporation shall indemnify every Director, officer, employee, or agent (and the estate, heirs, and personal representatives of such person) of the Corporation and its subsidiaries and affiliates against all Liability and Expense that may be incurred by him or her in connection with or resulting from any Claim to the fullest extent authorized or permitted by the Corporation Law. This indemnification shall be deemed to be a contract between the Corporation and each such person, and the person’s rights hereunder shall not be diminished or otherwise adversely affected by any repeal, amendment, or modification of this Section.

ARTICLE VIII—Approval of Business Combinations Except as otherwise provided, neither the Corporation nor its Subsidiaries, if any, shall become a party to any Business Combination with a Related Person without the prior appropriate affirmative vote at a meeting of the Corporation’s shareholders or Directors, as applicable.

ARTICLE IX—Restrictions on Ownership and Transfer of Stock Except as otherwise provided in the Articles of Incorporation, without the approval of the Board of Directors, for a period of five years following the initial date of filing of the Articles of Incorporation, no person may acquire beneficial ownership of more than one share less than 5% of the outstanding shares of Common Stock, except by or on behalf of the Corporation, and except for certain passive institutional investors that may acquire more than 5% but less than 10% of the Common Stock.

ARTICLE X—Initial Board of Directors Article X provides the name and post office address of the members of the first Board of Directors of the Corporation.

ARTICLE XI—Incorporator Article XI provides that the name and post office address of the incorporator of the Corporation is Anthem Insurance Companies, Inc., 120 Monument Circle, Indianapolis, Indiana 46204.

ARTICLE XII—Miscellaneous Provisions Except as otherwise expressly provided for in these Articles of Incorporation, the Corporation shall be deemed, for all purposes, to have reserved the right to amend, alter, change, or repeal any provision contained in these Articles of Incorporation to the greatest extent permitted by statute.

Except for the acquisition by the Corporation of all of the outstanding capital stock of Anthem Insurance Companies, Inc. (“Anthem Insurance”), in connection with the conversion of Anthem Insurance from a mutual insurance company to a stock insurance company under the Indiana Demutualization Law (Ind. Code 27-15), during the five (5) year period commencing on the effective date of the conversion, no person or persons acting in concert (other than the Corporation, Anthem Insurance, or any other company that is directly or indirectly wholly owned by the Corporation, or any employee benefit plans or trusts sponsored by the Corporation or Anthem Insurance) may directly or indirectly acquire, or agree to offer to acquire, in any manner the beneficial ownership of five percent (5%) or more of the outstanding shares of any class of a voting security of the Corporation or Anthem Insurance, other than in compliance with Ind. Code 27-5-13-2.

A-34 EXHIBIT D

SUMMARY OF BY-LAWS OF ANTHEM, INC.

SUMMARY

ARTICLE I—Meetings of Shareholders Annual meetings of the shareholders of the Corporation shall be held each year commencing in 2002, at the time and place within or without the State of Indiana as designated by the Board of Directors. Special meetings of the shareholders of the Corporation may be called at any time only by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President. At each annual meeting, the shareholders shall elect the directors and shall conduct only such other business as shall have been properly brought before the meeting.

Nominations of persons for election as Directors may be made by the Board of Directors or by any shareholder who is a shareholder of record at the time of giving the notice of nomination provided for in Article I and who is entitled to vote in the election of Directors. Except as otherwise provided by the Indiana Business Corporation Law or the Corporation’s Articles of Incorporation, each share of Common Stock of the Corporation that is outstanding at the record date established for any annual or special meeting of shareholders and is outstanding at the time of and represented in person or by proxy at the annual or special meeting, shall entitle the record holder thereof, or his proxy, to one (1) vote on each matter voted on at the meeting.

Unless the Indiana Business Corporation Law provides otherwise, at all meetings of shareholders, twenty- five percent (25%) of the votes entitled to be cast on a matter, represented in person or by proxy, constitutes a quorum for action on the matter. If a quorum exists as to a matter to be considered at a meeting of shareholders, action on such matter (other than the election of Directors) is approved if the votes properly cast favoring the action exceed the votes properly cast opposing the action, except as required by the Corporation’s Articles of Incorporation or the Indiana Business Corporation Law. Directors shall be elected by a plurality of the votes properly cast. A shareholder may vote his or her shares either in person or by proxy.

Any or all of the members of the Board of Directors may be removed only at a meeting of the shareholders or Directors called expressly for that purpose.

Any action required or permitted to be taken at a shareholders’ meeting may be taken without a meeting if the action is taken, with written consents, by all the shareholders entitled to vote on the action.

ARTICLE II—Directors The business and affairs of the Corporation shall be managed under the direction of a Board of Directors consisting of at least five (5) Directors, but not more than nineteen (19) Directors. The Directors shall be divided into three (3) groups, with each group consisting of one-third ( 1⁄3) of the total Directors, as near as may be, with the term of office of the first group to expire at the annual meeting of shareholders in 2002, the term of office of the second group to expire at the annual meeting of shareholders in 2003, and the term of office of the third group to expire at the annual meeting of shareholders in 2004.

A majority of the whole Board of Directors shall be necessary to constitute a quorum for the transaction of any business, except the filling of vacancies. If a quorum is present when a vote is taken, the affirmative vote of a majority of the Directors present shall be the act of the Board of Directors, unless the act of a greater number is required by the Indiana Business Corporation Law, the Corporation’s Articles of Incorporation or the By-Laws.

The Board of Directors shall meet annually, without notice, immediately following the annual meeting of the shareholders, for the purpose of transacting such business as properly may come before the meeting. Other

A-35 regular meetings of the Board of Directors shall be held on resolution adopted by the Board of Directors and communicated to the Directors. Special meetings of the Board of Directors may be called by the Chairman of the Board, the Chief Executive Officer or by one quarter ( 1⁄4) of the whole authorized number of Directors.

Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if the action is taken, with written consents, by all members of the Board.

The Board of Directors may appoint three (3) or more members to an Executive Committee. The Executive Committee shall, subject to certain restrictions, be authorized to exercise the authority of the full Board of Directors at any times other than during regular or special meetings of the Board of Directors. Members of the Executive Committee shall serve at the pleasure of the Board of Directors.

The Board of Directors may appoint additional committees, including a Compensation Committee, an Audit Committee, a Planning Committee, a Board Governance and Executive Development Committee, and other committees. Article II provides for the duties and limitations of such committees, all of which shall serve at the pleasure of the Board of Directors.

Unless otherwise restricted by the Corporation’s Articles of Incorporation or By-Laws, Directors shall receive for their services on the Board or any Committee thereof such compensation and benefits, including the granting of options, together with expenses, if any, as the Board may from time to time determine.

ARTICLE III—Officers The officers of the Corporation shall consist of the Chief Executive Officer, the President, the Chief Financial Officer, the Chief Accounting Officer, and the Secretary, and such other officers or assistant officers as it may from time to time determine. Any two (2) or more offices may be held by the same person. All officers shall serve at the pleasure of the Board of Directors. The Board of Directors may remove any officer at any time with or without cause. Vacancies in such offices may be filled by the Board of Directors at any meeting of the Board of Directors.

The Chairman of the Board, if any, shall, if present, preside at all meetings of the shareholders and of the Board of Directors and shall have such powers and perform such duties as are assigned to him by the Board of Directors.

The Chief Executive Officer shall be the chief executive and principal policymaking officer of the Corporation. Subject to the authority of the Board of Directors, he or she shall formulate the major policies to be pursued in the administration of the Corporation’s affairs.

The President shall exercise the powers and perform the duties which ordinarily appertain to such office and shall manage and operate the business and affairs of the Corporation in conformity with the policies established by the Board of Directors and the Chief Executive Officer.

The Chief Financial Officer shall be the chief financial officer of the Corporation and shall be responsible for all of the Corporation’s financial affairs, subject to the supervision and direction of the Chief Executive Officer, and shall have and perform such further powers and duties as prescribed by the Board of Directors.

Each Executive Vice President shall have such powers and perform such duties as prescribed by the Board of Directors and delegated by the Chief Executive Officer.

The Chief Accounting Officer shall perform all of the duties customary to that office, shall be the Chief Accounting Officer of the Corporation and shall be responsible for maintaining the Corporation’s accounting books and records and preparing its financial statements.

A-36 The Secretary shall be the custodian of the books, papers, and records of the Corporation and of its corporate seal, if any, and shall be responsible for seeing that the Corporation maintains the corporate records and makes all appropriate government filings. The Secretary shall be responsible for preparing minutes of the meetings of the shareholders and of the Board of Directors.

Each Vice President shall have such powers and perform such duties as designated by the Board of Directors and delegated by the Chief Executive Officer or the President.

The Treasurer, if any, shall be responsible for the treasury functions of the Corporation, subject to the supervision of the Chief Financial Officer.

The Board of Directors may, at its discretion, from time to time, fix the salary of any officer by resolution included in the minute book of the Corporation.

ARTICLE IV—Checks All checks, drafts, or other orders for payment of money shall be signed in the name of the Corporation by such officers or persons as shall be designated from time to time by the Board of Directors.

ARTICLE V—Loans Such of the officers of the Corporation as shall be designated from time to time by the Board of Directors shall have the power, with such limitations thereon as may be fixed by the Board of Directors, to borrow money in the Corporation’s behalf, to establish credit, to discount bills and papers, to pledge collateral, and to execute such notes, bonds, debentures, mortgages, trust indentures, and other instruments as may be authorized from time to time by the Board of Directors.

ARTICLE VI—Execution of Documents The Chief Executive Officer, the President or any other officer authorized by the Board of Directors may sign all deeds, leases, contracts, or similar documents unless otherwise directed by the Board of Directors or otherwise provided herein or in the Corporation’s Articles of Incorporation, or as otherwise required by law.

ARTICLE VII—Stock The shares of the Corporation may be represented by certificates, or if the Board of Directors provides, by uncertificated shares. Any certificates shall be signed by the Chief Executive Officer or the President and by the Secretary or an Assistant Secretary.

Article VII also provides procedures for the transfers of shares on the books of the Corporation, procedures for dealing with lost or destroyed stock certificates, and for the keeping of shareholder and stock transfer records. The Board of Directors may appoint one or more transfer agents and one or more registrars and may require each stock certificate to bear the signature of either or both.

ARTICLE VIII—Seal The corporate seal of the Corporation shall, if the Corporation elects to have one, be in the form of a disc, with the name of the Corporation and “INDIANA” on the periphery thereof and the word “SEAL” in the center.

ARTICLE IX—Miscellaneous The provisions of the Indiana Business Corporation law, as amended, are applicable to all matters relevant to, but not specifically covered by, the By-Laws.

A-37 The fiscal year of the Corporation shall end on December 31 of each year.

Effective upon the registration of any class of the Corporation’s shares under Section 12 of the Securities Exchange Act of 1934, as amended, the Corporation shall be governed by the provisions of Ind. Code 23-1-43 regarding business combinations.

The provisions of Ind. Code 23-1-42 shall apply to the acquisition of shares of the Corporation.

If and whenever the provisions of Ind. Code 23-1-42 apply to the Corporation, any or all control shares acquired in a control share acquisition shall be subject to redemption by the Corporation, if no acquiring person statement has been filed with the Corporation with respect to such control share acquisition in accordance with Ind. Code 23-1-42-6, or the control shares are not accorded full voting rights by the Corporation’s shareholders as provided in Ind. Code 23-1-42-9.

The By-Laws may be rescinded, changed, or amended, and provisions may be waived, at any meeting of the Board of Directors by the affirmative vote of a majority of the entire number of Directors at the time, except as otherwise required by the Corporation’s Articles of Incorporation or by the Indiana Business Corporation Law.

A-38 EXHIBIT E

SUMMARY OF LARGE HOLDER SALE PROGRAM PROCEDURES AND RESTRICTIONS

The Large Holder Sale Program will be administered by Equiserve Trust Company as the program agent. Large Holders are Eligible Statutory Members for which valid instructions to sell shares of Common Stock have been received (i) that were initially allocated 30,000 or more shares pursuant to the Plan and (ii) that hold 30,000 or more shares on the date the instructions are received. Under the Large Holder Sale Program, if the aggregate number of shares of Anthem, Inc. Common Stock (“Common Stock”) to be sold on the open market on any day on behalf of all Large Holders exceeds the lesser of (1) 1/10th of 1% of the number of shares of Common Stock outstanding or (2) 25% of the average daily trading volume for the 20 consecutive trading days (or such shorter period, if fewer than 20 consecutive trading days have elapsed since the Effective Date) preceding such day, then the designated broker-dealer of the program agent will process trades for Large Holders on the open market for only the number of shares of Common Stock up to that limit. The designated broker-dealer of the program agent will either defer the excess shares to the next trading day (which will be subject to the same volume limitations on that day) or sell the shares as principal through a block trade or through a nationally recognized brokerage firm that will sell the shares, as agent, at market clearing prices. Anthem, Inc. may also repurchase the excess shares on any day, but will not be required to do so.

The Large Holder Sale Program may not be changed without the consent of the Indiana Insurance Commissioner.

A-39 EXHIBIT F

SUMMARY OF ACTUARIAL CONTRIBUTION MEMORANDUM

The Actuarial Contribution Memorandum describes the actuarial methods by which the Actuarial Contribution (“AC”) of each Eligible Statutory Member is calculated, pursuant to Article VII of the Plan. Each Eligible Statutory Member will be allocated a number of shares of Common Stock determined in part by the ratio of such Eligible Statutory Member’s AC to the sum of ACs attributable to all Eligible Statutory Members. The data and information required for the AC calculations came from a variety of company sources, including policy, contract and customer records, internal analyses and memoranda, and statutory annual financial statements.

Generally, for each Eligible Statutory Member, the AC is intended to represent each Eligible Statutory Member’s contribution to surplus from January 1, 1990 until June 30, 2000 (the “AC Date”) (this amount is referred to as a “Direct Assignment”), combined with the estimated present value of contributions to surplus that the Statutory Member will generate over the next five years (taking into account the probability of lapse during the five year period) and the Statutory Member’s proportionate share of unassigned surplus. A Statutory Member’s contribution to surplus equals the excess of (a) premium and other income plus investment return from operations over (b) the sum of benefits paid, increases in claim liabilities and reserves, commissions, expenses and taxes.

Section 7.3(b)(iv) of the Plan requires that the AC calculation take into account and include the rights and interests of Eligible Statutory Members holding Policies, including Guaranty Policies (or Certificates of Membership thereunder), as applicable, as required by Section 8.5 of Anthem Insurance’s Articles of Incorporation. Anthem Insurance began issuing the Guaranty Policies in connection with its 1993 merger with Southeastern Mutual Insurance Company, its 1995 merger with Community Mutual Insurance Company and its 1997 merger with Blue Cross & Blue Shield of Connecticut, Inc. The Guaranty Policies grant Membership Interests to certain customers of Anthem Health Plans of Kentucky, Community Insurance Company (in Ohio) and Anthem Health Plans (in Connecticut). For purposes of the Plan, Holders of Guaranty Policies or Certificates of Membership are considered to have been issued their insurance policies directly by Anthem Insurance, and the AC calculation reflects not only the regular insurance coverage in Anthem Insurance or the applicable subsidiary in Kentucky, Ohio or Connecticut, but also in the corresponding mutual company that was merged into Anthem, if applicable.

The AC calculation reflects the rights and interests of Holders of Guaranty Policies (or Certificates of Membership thereunder), as applicable, by assigning to each Statutory Member in force on each of the merger dates: (a) The accumulation of the amount, if any, assigned at the date of the most recent prior merger involving such Statutory Member; plus (b) The accumulation of the Direct Assignments since the later of (i) January 1, 1990, (ii) the most recent merger date, and (iii) the most recent issue date on which insured coverage was initiated (and from which insured coverage has been continuously maintained) (the “Issue Date”); plus (c) An amount estimated to equal the present value of contributions to surplus that the Statutory Member will generate over the next five years, taking into account the probability of lapse during the five year period, plus, (d) The Statutory Member’s proportionate share of the unassigned surplus (described below), which may be positive or negative, in the Statutory Member’s company on such merger date.

“Unassigned surplus” is the excess (positive or negative) of the adjusted surplus of the applicable company at the applicable date over the sum of (i) the amounts determined in paragraphs (a), (b) and (c) in the preceding paragraph and(ii) the fixed share amount for all Statutory Members then in force in such company on the applicable date.

A-40 As the final step of the calculation, each Statutory Member in force on the AC Date is assigned value as of that date using a methodology substantially similar to that described above. The differences in the calculation as of the AC Date are as follows: (1) the dates used for the calculation in paragraph (b) are the later of (i) most recent merger date or (ii) the Issue Date, and (2) with respect to the calculation in paragraph (d), each Statutory Member is assigned a proportionate share of unassigned surplus, which may be positive or negative, of Anthem Insurance on the AC Date. The AC of Statutory Members with issue dates after the AC Date and prior to the Adoption Date are set equal to the ACs for Statutory Members with the identical coverage and with Issue Dates immediately prior to the AC Date.

For the purpose of determining contribution to surplus, the products held by Statutory Members were consolidated into five representative lines of business (“LOBs”): (1) Individual Medicare Supplement; (2) Individual Medicare Risk (Medicare+Choice); (3) Direct pay individual medical other than related to Medicare; (4) Insured group medical (including large and small groups, with or without other non-medical coverage, but excluding administrative services only contracts (individual long-term care insurance policies are treated as though they were group medical)); and (5) Insured group non-medical (insured dental, vision, or drugs, when written without insured medical coverage, but excluding administrative services only contracts) 1. If Statutory Members who are individuals have maintained continuous coverage for the AC calculation period, but have changed the type of coverage during that period, their AC recognizes the full, continuous period of time during which they were Statutory Members, but the AC is determined as though their LOB on the Adoption Date applies to the entire coverage period, with one exception related to the Medicare Risk LOB (in which case, the AC assigned will be based in part on when they most recently transferred and from what LOB they transferred).

1 Although not specified in the Actuarial Contribution Memorandrum, stop-loss policies that confer Membership Interests will be grouped in the insured group non-medical LOB.

A-41 Appendix 2

August 14, 2001

Board of Directors Anthem Insurance Companies, Inc. 120 Monument Circle Indianapolis, Indiana 46204

Ladies and Gentlemen:

We have acted as the tax advisor to Anthem Insurance Companies, Inc. (“Anthem Insurance”) in connection with the proposed (a) conversion of Anthem Insurance from a mutual insurance company to a stock insurance company pursuant to applicable Indiana law, (b) holding company formation whereby Anthem Insurance will become a wholly owned subsidiary of Anthem, Inc., and (c) initial public offering of Anthem, Inc. stock (collectively, the “Proposed Transaction”).

We have reviewed the following documents (collectively, the “Documents”) in connection with the Proposed Transaction:

(1) The Anthem Insurance Companies, Inc. Plan of Conversion to a Stock Insurance Company under Ind. Code 27-15-2-2, as approved by the Board of Directors of Anthem Insurance on June 18, 2001 (the “Plan”);

(2) Form S-1 Registration Statement of Anthem, Inc. under the Securities Act of 1933 to be filed with the Securities and Exchange Commission on or about August 15, 2001;

(3) Anthem Insurance Companies, Inc. Member Information Statement, dated August 17, 2001 (the “Member Information Statement”); and

(4) Representation Letter from the management of Anthem Insurance Companies, Inc. and Anthem Holdings, Inc. to Ernst & Young LLP, dated August 14, 2001.

You have advised us that the information set forth in the Documents is true, correct, and complete in all material respects and constitutes an accurate and complete description of the Proposed Transaction. We have made no independent determination or investigation regarding such facts, circumstances, terms or conditions and, therefore, have relied exclusively upon the Documents. Moreover, we have assumed that the Documents are authentic, that the copies provided to us are accurate and complete, that the Proposed Transaction described in the Documents has been authorized by all necessary parties and will be consummated in accordance with the terms of the Documents and that any statement subject to a knowledge qualification is true without such qualification. If any of these assumptions is incorrect, our opinion could be materially and adversely affected, and might be inapplicable. References herein to the “Code” are to the Internal Revenue Code of 1986, as amended, and to “Treasury Regulations” are to the Income Tax Regulations issued thereunder. References to defined terms which are not otherwise expressly defined in this opinion shall have the meanings given in the Documents.

A-42 Based upon the foregoing, subject to the qualifications and limitations stated herein and in the Documents, it is our opinion that: (1) Neither Anthem Insurance nor Anthem, Inc. will recognize gain or loss in the Proposed Transaction; (2) Each Eligible Statutory Member receiving solely shares of Anthem, Inc. common stock will not recognize gain or loss in the Proposed Transaction; (3) Each Eligible Statutory Member receiving cash in the Proposed Transaction will generally recognize taxable income in the taxable year in which the cash is received. The amount of such cash will generally constitute capital gain, and will be long-term capital gain if the Eligible Statutory Member’s holding period in the Policy at the time of sale is more than one year. However, under certain circumstances in which an Eligible Statutory Member actually or constructively continues to own Anthem, Inc. common stock, the cash received may be taxed as ordinary income. In addition, in the event that an Eligible Statutory Member receives cash under the Plan in an amount that exceeds $150,000 in a taxable year other than the taxable year that includes the Effective Date, an additional United States federal income tax may be imposed; (4) The tax basis of the shares of common stock to be received by each Eligible Statutory Member receiving stock will be zero; (5) Provided that the applicable Policy or Policies held by an Eligible Statutory Member constitute a capital asset on the Effective Date, the holding period of the shares of common stock to be received by such Eligible Statutory Member will include the period during which such Eligible Statutory Member became a Statutory Member and had continuous health care benefits coverage from the same company (or such predecessor company from which its business was assumed in a merger); and (6) The summary of the principal United States federal income tax consequences of the Plan to Eligible Statutory Members, Anthem Insurance and Anthem, Inc., as set forth in the Member Information Statement, to the extent it describes matters of law or legal conclusions, is, subject to the limitations and assumptions set forth in the Member Information Statement, an accurate summary of the material United States federal income tax consequences of the Plan to Eligible Statutory Members, Anthem Insurance and Anthem, Inc. under the United States federal income tax law as of the date hereof.

Our opinion is expressly limited to the United States federal income tax issues specifically set forth above. No opinion has been requested, and none is provided, with respect to any other consequences arising in connection with the Proposed Transaction, including, but not limited to, any other consequences under Subchapter C of the Code or the consolidated return Treasury Regulations, alternative minimum tax consequences, state and local tax consequences, foreign tax consequences, or employee benefit tax consequences.

Our opinion is based upon our analysis of the Code, the Treasury Regulations promulgated thereunder, case law, and administrative pronouncements in effect on the date of this letter. The foregoing are subject to change, and any such change may be retroactively effective. If so, our opinion as set forth above may be affected and may not be relied upon. We have undertaken no obligation to update our opinion for changes in law or fact occurring subsequent to the date of this letter. Moreover, our opinions do not apply to any Eligible Statutory Member that is a debtor under the jurisdiction of a court in a bankruptcy or similar proceeding to the extent that stock received by such Eligible Statutory Member in the Proposed Transaction is used to satisfy the indebtedness of such Eligible Statutory Member.

This opinion letter is provided for the exclusive benefit of Anthem Insurance, Anthem, Inc. and the Eligible Statutory Members to determine the United States federal income tax consequences of the Proposed Transaction, and pertains solely to the Proposed Transaction. Accordingly, our opinion may not be relied on by any other person or persons, or used by any person in connection with any other transaction, or used for any other purpose, without the prior written consent of Ernst & Young LLP.

A-43 This letter is an opinion of our firm as to the interpretation of existing law and, as such, is not binding on the Internal Revenue Service or the courts. Accordingly, there can be no assurance that the Internal Revenue Service or the courts will agree with our opinion.

We hereby consent to the filing of this opinion with the Indiana Department of Insurance as an exhibit to the Member Information Statement and to the reference to our firm under the appropriate headings in the Member Information Statement.

Very truly yours,

A-44

Appendix 4

One Pennsylvania Plaza, 38th Floor New York, NY 10119 Tel +1 212 279.7166 Fax +1 212 629.5657 www.milliman.com

June 18, 2001

Board of Directors Anthem Insurance Companies, Inc. 120 Monument Circle Indianapolis, Indiana 46204

Re: Plan of Conversion of Anthem Insurance Companies, Inc.

STATEMENT OF ACTUARIAL OPINIONS

Subject of this Opinion Letter

This opinion letter relates to the actuarial aspects of the proposed reorganization of Anthem Insurance Companies, Inc. (“Anthem Insurance”) pursuant to its Plan of Conversion (the “Plan”) as presented to the Board of Directors of Anthem Insurance for its consideration and approval on June 18, 2001. The specific opinions set forth herein relate to the proposed allocation of consideration among the Eligible Statutory Members of Anthem Insurance and the decision not to include a Closed Block dividend preservation mechanism, each of which is described in the Plan.

Capitalized terms have the same meaning in this opinion as they have in the Plan.

Qualifications and Usage We, Robert H. Dobson, Dale S. Hagstrom, and Daniel J. McCarthy, are associated with the firm of Milliman USA (“Milliman”) and are Members of the American Academy of Actuaries, qualified under the Academy’s Qualification Standards to render the opinions set forth herein. We, and other Milliman staff acting under our direction, have advised Anthem Insurance during the course of its development of the Plan and the Actuarial Contribution Memorandum, which is Exhibit F thereto. The Plan is based on authority in Title 27 Article 15 of the Indiana Code (“the Indiana Demutualization Law”). The opinions set forth herein are not legal opinions concerning the Plan, the Articles of Incorporation of Anthem Insurance, or Indiana law, but rather are opinions concerning the application of actuarial concepts and standards of practice to the provisions of the Plan.

Chapter 3 Section 2 (11) of the Indiana Demutualization Law requires “an actuarial opinion as to the following: (A) The reasonableness and appropriateness of the methodology or formulas used to allocate consideration among eligible members, and (B) The reasonableness of the plan of operation ...of...theclosed block if a closed block is used for . . . policies that provide for the distribution of policy dividends.” We are

A-57 aware that, per Chapter 3 Section 4 (4) of the Indiana Demutualization Law, our opinion will be furnished to the Insurance Commissioner of the State of Indiana in fulfillment of this requirement and for her use in determining the fairness of the Plan, and to the Statutory Members of Anthem Insurance as part of the Member Information Statement that will be delivered to them, and we consent to the use of this opinion letter for those purposes.

Reliance In forming the opinions set forth in this opinion letter, we have received from Anthem Insurance extensive information concerning the past and present practices and financial results of Anthem Insurance and its predecessors. We also received from Anthem Insurance relevant corporate documents and Membership information. We, and other Milliman staff acting under our direction, met with personnel of Anthem Insurance and defined the information we required. In all cases, we were provided with the information we requested to the extent that it was available or to the extent it was practicable to develop the information from the records of Anthem Insurance. We have made no independent verification of this information, although we have reviewed it where practicable for general reasonableness and internal consistency. We have relied on this information, which was provided under the general direction of Cynthia S. Miller, Vice President and Chief Actuary of Anthem Insurance. Our opinions depend on the substantial accuracy of this information.

Process In all cases, we and other Milliman staff acting under our direction either derived the results on which our opinions rest or reviewed derivations carried out by Anthem Insurance employees.

Opinion #1 Under the Plan, consideration (shares of Common Stock or their equivalent value in cash) is to be distributed to each Eligible Statutory Member in exchange for such Member’s Membership Interest. In our opinion, the principles, assumptions, methodologies, and formulas used to allocate consideration among the Eligible Statutory Members of Anthem Insurance as set forth in Article VII of the Plan (including the Actuarial Contribution Memorandum, which is Exhibit F thereto) are reasonable and appropriate and consistent with the requirements of the Indiana Demutualization Law, and the resulting allocation of consideration is fair and equitable to the Eligible Statutory Members.

Discussion Statutory requirements. Chapter 9 Section 1 of the Indiana Demutualization Law requires that “The method or formula for allocating consideration among the eligible members shall provide for each eligible member to receive (1) a fixed value, amount or proportion of consideration; (2) a variable value, amount or proportion of consideration; or (3) a combination of fixed and variable values, amounts, or proportions of consideration.” Section 2 of Chapter 9 further requires that “Any method used or formula developed for the fair and equitable allocation of stock among eligible members under this article must utilize generally accepted actuarial principles.”

General description of the method of allocation of consideration among Eligible Statutory Members. In general, Statutory Members with coverage in force on both the Board Adoption Date and the Effective Date are eligible to receive consideration, which will consist of both a variable component and a fixed component of consideration. The amount of such consideration, whether actually distributed in the form of cash or shares of Common Stock, is expressed in terms of shares of Common Stock. (For a further discussion of this subject, see “The effect of different forms of consideration”, below.)

Prior mergers. Statutory Members of Anthem Insurance include Statutory Members whose initial eligibility arose from three companies—Southeastern Mutual Insurance Company, Community Mutual Insurance

A-58 Company, and Blue Cross & Blue Shield of Connecticut, Inc.—that were merged into Anthem Insurance in 1993, 1995 and 1997, respectively. The Articles of Incorporation of Anthem Insurance contain provisions arising from these three mergers, and these provisions in the Articles of Incorporation are important to our understanding of the Plan and our view of the fairness and equity of the allocation. The allocation of the Aggregate Variable Component and the Aggregate Fixed Component, discussed below, reflects these provisions. The Aggregate Variable Component and its allocation. The Aggregate Variable Component is the majority of the consideration to be distributed to Eligible Statutory Members (approximately 80% of the total). Its allocation among the Eligible Statutory Members is based on an “actuarial contribution method”, which takes into account Actuarial Contributions of policies held by Eligible Statutory Members. The “actuarial contribution” method used with respect to Anthem Insurance takes into account, at each past merger point and at the Actuarial Contribution Date, both historical contributions to surplus and then-anticipated future contributions to surplus. The concept of an actuarial contribution method is recognized in the actuarial literature, most notably in Actuarial Standard of Practice number 37, “Allocation of Policyholder Consideration in Mutual Life Insurance Company Demutualizations” (“ASOP 37”) as an appropriate allocation method. While ASOP 37 does not strictly apply to a nonlife insurer such as Anthem Insurance, there is no other Actuarial Standard of Practice regarding allocation of consideration in a demutualization that does apply. Further, much of the health insurance underwritten by Anthem Insurance could be underwritten by a life insurer, to which ASOP 37 would apply. In our view, the conformance of the Plan with ASOP 37 means that the distribution methodology proposed in the Plan is consistent with generally accepted actuarial principles. We therefore find that the use of the “actuarial contribution” method as the principal basis underlying the allocation of consideration is reasonable and appropriate. We further find that the actuarial contribution method has been implemented in a reasonable manner, consistent with the Articles of Incorporation, as well as with the past and present business practices of Anthem Insurance. We disclose, as a deviation from the guidance of ASOP 37, the fact that Actuarial Contributions of group insurance policies issued by Anthem Insurance and by the three previously-mentioned companies that were merged into Anthem Insurance were calculated by treating the experience of such policies on a pooled basis, notwithstanding that some of them have historically been rated on a policy-by-policy basis. This deviation is justified principally because of data limitations; with respect to most of the time period over which historical contributions to surplus were analyzed, Anthem Insurance does not have sufficiently complete or reliable data to support a policy-by-policy analysis of such contributions. The Aggregate Fixed Component and its allocation. The distribution also takes into account, through the Aggregate Fixed Component, the fact that Statutory Members have membership rights that are independent of their actuarial contributions. Each Eligible Statutory Member is, under the Plan, allocated a fixed number of shares of Common Stock without regard to the Actuarial Contribution of Policies of which that Statutory Member is the Holder. This element of the allocation assures that each Eligible Statutory Member will receive some distribution, and is consistent with overall concepts of equity. Under the Plan, the percentage of the total consideration that is allocated in this manner (approximately 20% of the total) is small relative to that allocated in proportion to positive actuarial contributions, which is appropriate. We find that including a fixed share in the allocation to each Eligible Statutory Member to reflect intangible membership rights is reasonable and appropriate. The effect of different forms of consideration and of conditions under which shares of Common Stock may be sold. a. Section 6.1 of the Plan provides that, subject to the limitations set forth therein, Eligible Statutory Members who do not affirmatively elect to receive their consideration in the form of shares of Common Stock may, at the option of Anthem Insurance and Anthem, Inc., receive consideration in cash. Section 6.3 of the Plan provides that, if the average of the closing prices (“average price”) of the Common Stock for the twenty consecutive days commencing with the Effective Date exceeds 110% of the IPO Price, each recipient of cash will receive an amount equal to the number of shares of Common Stock determined as set forth above multiplied by a price per share equal to the sum of the IPO Price and either (A) the excess of the average price over 110% of the IPO Price or (B) 10% of the IPO Price, whichever is less; otherwise, each recipient of cash will receive an amount equal to the number of

A-59 shares of Common Stock determined as set forth above multiplied by a price per share equal to the IPO price. b. Section 6.2 of the Plan provides that Common Stock distributed to an Eligible Statutory Member who receives 30,000 or more shares of such Common Stock (a “large holder”) may be sold or otherwise transferred, during the 180 days following the Effective Date, only under “Large holder sale program procedures and restrictions” set forth in Exhibit E to the Plan.

We find that for recipients of cash, the adjustment to the allocation of consideration described in (a) above is fair and equitable because it reasonably reflects the different risks assumed by recipients of cash in contrast to those of recipients of Common Stock. We find that for large holders, the conditions and restrictions referred to in (b) above are fair and equitable because in their absence, such holders might have the unfair advantage of being able to dispose of their Common Stock on favorable terms to the detriment of other holders of Common Stock, and that those conditions and restrictions are not likely to impose an economic disadvantage on them.

Opinion #2 Pursuant to Article VIII of the Plan, no special provisions, such as a closed block, are being created to preserve the dividend expectations of policyholders and members. In our opinion, this is fair and reasonable.

Discussion Our opinion is based on the following considerations: 1. Anthem Insurance has not paid policyholder dividends regularly enough to create any expectations; in fact, Anthem Insurance and its predecessors have paid no policyholder dividends for more than twenty-five years. In addition, almost all policies are silent as to dividends or even as to participating status vs. nonparticipating status. 2. Because there are no reasonable dividend expectations to preserve, no special provisions are needed in the Plan. 3. Anthem Insurance has no individual life insurance policies or annuity contracts in force, nor has it ever issued any such contracts. Thus, under the Indiana Demutualization Law, a closed block is not required. Sincerely yours,

Robert H. Dobson Consulting Actuary

Dale S. Hagstrom Consulting Actuary

Daniel J. McCarthy Consulting Actuary

A-60

Questions?

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