BEFORE THE COMMISSIONER OF THE STATE OF IOWA ______In the matter of application of ) PLC, UNION ) HOLDINGS LIMITED, ) FINDINGS OF FACT, CGU INTERNATIONAL INSURANCE ) CONCLUSIONS OF LAW PLC, CGU INSURANCE PLC, ) AND ORDER AVIVA INTERNATIONAL HOLDINGS ) LIMITED, and LIBRA ACQUISITION ) (Iowa Code ch. 521A) CORPORATION for approval of a plan ) to acquire control of ) AMERUS LIFE INSURANCE ) COMPANY ) ______)______

I. INTRODUCTION

AVIVA PLC, NORWICH UNION HOLDINGS LIMITED, CGU INTERNATIONAL INSURANCE PLC, CGU INSURANCE PLC, AVIVA INTERNATIONAL HOLDINGS LIMITED, and LIBRA ACQUISITION CORPORATION (collectively “Aviva”) filed an application for approval of a plan to acquire control of AMERUS LIFE INSURANCE COMPANY (“AmerUs”).1 Aviva is incorporated under the laws of and Wales and is publicly-traded on the .

AmerUs is an Iowa domestic life insurance company wholly owned by AmerUs Group Inc. (“Group”) which is a publicly traded insurance holding company. Aviva wishes to acquire control of AmerUs, and has filed an application with the Iowa Insurance Commissioner (“Commissioner”) for permission to do so.

Pursuant to Iowa Code section 521A.3(4)(b) (2005), and at the request of Aviva, a public hearing was held Tuesday, October 10, 2006 at the Iowa Insurance Division (“the Division”) for the purpose of determining whether Aviva’s proposed acquisition of control of AmerUs complies with the statutory requirements for acquisition set forth in Iowa Code section 521A.3(4)(a) (2005).

II. JURISDICTION

The Commissioner has jurisdiction over this matter under Iowa Code section 521A.3 (2005). III. EVIDENCE PRESENTED

1 Aviva’s letter dated September 13, 2006, admitted as Exhibit 6, states that CGU INSURANCE PLC has become AVIVA INSURANCE LIMITED, CGU INTERNATIONAL INSURANCE PLC has become AVIVA INTERNATIONAL INSURANCE LIMITED and NORWICH UNION HOLDINGS LIMITED has become AVIVA GROUP HOLDINGS LIMITED.

In support of the application, Aviva submitted a “Statement Regarding the Acquisition of Control of or Merger with a Domestic Insurer” with attached exhibits (“Form A”) containing detail relating to Aviva’s operations, and several material supplements. Aviva also submitted the testimony of Philip Scott, Aviva’s Executive Group Director, as well as hearing Exhibits “1” through “6.”

Thomas C. Godlasky is Chairman, President, and Chief Executive Officer of AmerUs. He appeared on AmerUs’ behalf to express support for the proposed acquisition.2 The hearing was adjourned at the close of testimony.

The administrative record was held open for the limited purpose of admitting information explaining the non-availability of the biographical affidavit of one of Aviva’s directors. Upon the Commissioner’s receipt of this information on the same day as the hearing and a determination that the information provided was sufficient, the administrative record was formally closed.

All evidence was admitted without objection and is part of the record considered by the Commissioner in issuing the following findings, conclusions and order.

No one appeared at the hearing to oppose Aviva’s request or otherwise offer evidence to contradict or question Aviva’s submission of evidence.

IV. FINDINGS OF FACT

The statutory requirements Aviva’s acquisition plan must meet are relatively straightforward. Iowa Code section 521A.3(4)(a) (2005) requires a showing by Aviva that the facts and circumstances supporting its application for acquisition of control of AmerUs meet five standards.

Briefly, these standards relate to (1) AmerUs’ post-acquisition ability to retain an Iowa license and continue writing existing lines of insurance, (2) the effect of the acquisition on insurance competition in Iowa, (3) the effect of Aviva’s financial condition on AmerUs and its policyholders, (4) the effect of Aviva’s anticipated changes to AmerUs’ operations on AmerUs’ policyholders and the public interest, and (5) the effect those persons that Aviva chooses to lead AmerUs in the future will have on the interests of AmerUs policyholders and the public. Each requirement is discussed in greater detail below.

If Aviva establishes that its application for acquisition of control meets these requirements, section 521A.3(4)(a) requires the Commissioner to approve the application.

Applying these standards to the evidence presented by the record, when viewed as a whole, the Commissioner finds the following facts:

2 The Commissioner notes that after the record had closed, Group’s stockholders approved the proposed transaction with over 97% voting in favor at a special meeting held on October 19, 2006.

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1. After a change of control, AmerUs will be able to satisfy Iowa licensure requirements and thus continue writing the line or lines of insurance for which it is presently licensed.

Iowa Code section 521A.3(4)(a)(1) (2006) requires Aviva to demonstrate to the Commissioner that, after a change of control, the acquired domestic insurer will be able to satisfy the requirements for issuing a license to write the line or lines of insurance for which it is presently licensed.

AmerUs is currently a licensee in good standing. Mr. Scott testified that, after acquisition by Aviva, AmerUs will continue to meet all licensure requirements within the State of Iowa. (Trans. at 41.) Its management, capitalization, business plan and conduct of business will remain unchanged upon completing this transaction. (Id.)

Continuing to meet all Iowa licensure requirements provides AmerUs with the ongoing ability to write existing lines of insurance. Nothing in the record supports a contrary finding.

The Commissioner finds that AmerUs’ ability to satisfy Iowa licensure requirements and its ability to continue writing existing lines of insurance for which it is presently licensed will be unimpaired after a change of control.

2. Aviva’s acquisition of control of AmerUs will not substantially lessen insurance industry competition within Iowa.

Iowa Code section 521A.3(4)(a)(2) (2006) requires Aviva to demonstrate to the Commissioner that the effect of acquiring control will not substantially lessen competition in insurance in Iowa.

Mr. Scott affirmed, as a part of his testimony, that the proposed transaction will not substantially lessen competition in Iowa and supported his testimony with the competitive impact statement filed as a part of the Form A filings. According to the competitive impact statement, every line of business affected by this acquisition falls within competitive impact safe harbors that are spelled out in the National Association of Insurance Commissioner’s guidance on insurance competition. (Trans. at 38-39.) Furthermore, Aviva and AmerUs made Hart-Scott-Rodino filings with the Federal Trade Commission and the Department of Justice and obtained (“HSR”) clearance on September 6, 2006. (Id. at 39.)

The Commissioner finds that Aviva’s acquisition of control of AmerUs will not substantially lessen competition in insurance in this state.

3. Aviva’s financial condition will not jeopardize the financial stability of AmerUs, or prejudice the interests of its policyholders.

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Iowa Code section 521A.3(4)(a)(3) (2006) requires Aviva to demonstrate to the Commissioner that its financial condition will not jeopardize the financial stability of the acquired domestic insurer, or prejudice the interests of its policyholders.

Mr. Scott testified that with premium income and investment sales of approximately $60 billion, with approximately $544 billion of assets under management and strong financial ratings, he believes that Aviva is a financially sound company and it’s acquisition of AmerUs will in no way prejudice the financial position of the AmerUs or the interests of the policyholders. The record also shows that Group has total premiums and deposits of approximately $3.5 billion and approximately $20 billion under management. (Trans. at 30).

Aviva will pay consideration of $3.1 billion in cash. About $2.45 billion of the total, or about 75 percent, will come from cash on hand. Aviva expects that issuing external debt will account for no more than $750 million of the $3.1 billion consideration, representing less than 25 percent of the total purchase price. (Id. at 30-31). As noted above Aviva has resources to service the external debt.

The Commissioner finds that Aviva’s financial condition will not jeopardize AmerUs’ financial stability. There being no evidence of adverse financial impact on AmerUs, the Commissioner also finds that the interests of AmerUs’ policyholders will not be prejudiced by Aviva’s financial condition.

4. Aviva’s proposed post-acquisition changes in AmerUs’ business, corporate structure and management are not unfair or unreasonable to AmerUs policyholders and are not contrary to the public interest.

Iowa Code section 521A.3(4)(a)(4) (2006) requires Aviva to demonstrate to the Commissioner that Aviva’s plans or proposals for material changes to the acquired domestic insurer’s business, corporate structure or management are not unfair or unreasonable to its policyholders and are not contrary to the public interest.

The record reflects that Aviva has no current plans or proposals to change AmerUs’ operations following closing. (Form A at 7; Trans. at 43.) Likewise, Aviva has no current plans or proposals to liquidate AmerUs, sell its assets, consolidate or merge it with any person, or make any other material changes in its business or corporate structure or management that would be unfair or unreasonable to policyholders of AmerUs or contrary to public interest. (Trans. at 43).

The proposed acquisition by Aviva will also benefit AmerUs policyholders in other ways. Consideration to be paid in the proposed transaction will be $3.1 billion in cash. (Id. at 30). Mr. Godlasky testified that Aviva brings complementary skills and resources of potential benefit to AmerUs. (Id. at 52.) In the United States, Aviva has gained specific experience in market areas where AmerUs is not currently active. Such market areas include the sale of structured settlements, the sale of tax sheltered annuities to educators,

4 and distribution of life insurance through major banks such as Washington Mutual typically with an expedited underwriting process. (Id.) Worldwide, Aviva has over 30 million customers in over 25 countries across North America, Europe and Asia and therefore has a wide range of experience. Aviva devotes considerable resources to facilitating knowledge sharing between its businesses and the intention is that AmerUs would be encouraged to participate fully in these processes in order to identify and obtain relevant expertise which might assist in future business development. These benefits inure to policyholders and enhance the public interest as well. (Id. at 53-54.)

The Commissioner finds that Aviva’s proposed post-acquisition changes in AmerUs’ business, corporate structure, and management are not unfair or unreasonable to AmerUs policyholders and are not contrary to the public interest.

5. The competence, experience, and integrity of those individuals who will control AmerUs after acquisition are sufficient to indicate that AmerUs policyholder interests and the public interest will not be jeopardized by Aviva’s acquisition of control of AmerUs.

Iowa Code section 521A.3(4)(a)(5) (2006) requires Aviva to demonstrate to the Commissioner that the competence, experience and integrity of those Aviva selects to control the acquired domestic insurer are sufficient to indicate that policyholders’ and the public’s interest will not be jeopardized by acquisition.

Mr. Scott’s testimony reflects the following: After acquisition, there will be no change in AmerUs’ board of directors and executive officers, with the exception that Melinda Urion will not remain the CFO of Group or a member of the board. (Trans. at 37.) Further, Mr. Scott stated that directors and executive officers of the Aviva who would control AmerUs are seasoned and experienced individuals in the insurance and financial services. They have proven records of competence, service and integrity. (Id. at 44.) Management biographies, which are part of the record in this proceeding, confirm Mr. Scott’s statements.

The Commissioner finds that the competence, experience and integrity of those individuals who will control AmerUs after acquisition are sufficient to indicate that AmerUs policyholder interests and the public interest will not be jeopardized by Aviva’s acquisition of control of AmerUs.

V. CONCLUSIONS OF LAW

The legislature has vested discretion in the Commissioner not only to hold hearings and make factual findings, but also to interpret and apply the law. Iowa Code section 521A.3(4)(a) (2006) requires the Commissioner to approve an application for acquisition of control if, after a public hearing, the applicant demonstrates all five criteria listed within that section to the Commissioner.

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Copies to:

Graham Jones Aviva plc St. Helen’s 1 Undershaft London EC3P 3DQ

Jane Boisseau LeBoeuf, Lamb, Greene & MacRae LLP 125 West 55th Street New York, NY 10019-5389

Fredrick M. Haskins Patterson, Lorentzen, Duffield, Timmons, Irish, Becker % Ordway, L.L.P. 505 Fifth Avenue, Suite 729 Des Moines, Iowa 50309

Michael H. Johnson EAC Management 654 Madison Ave, Suite 801 New York, NY 10021

Greg Heltzer McDermott Will & Emery 600 13th Street Washington DC 20005-3096

Sandra Fennell Rock Creek Partners 3000 K Street, Suite 300 Washington DC 20007

Ken Dolbeare 2520 Professional Road Richmond, Virginia 23235

Blake Hiltabrand Deephaven Capital Management 130 Cheshire Lane Minnetonka, MN 55305

7 Keith Denninger Wall Street Access 17 Battery Place New York, NY 10004

Matthew Fitzgerald Bear, Stearns & Co. Inc. 383 Madison Avenue New York, NY 10179

Alex Namkung D.B. Zwirn & Co., L.P. 745 Fifth Avenue, 18th Floor New York, NY 10151

Ken Abitz 420 SW 9th Street Topeka, KS 66612

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