By Paul E. Forte Chief Executive Officer Long Term Care Partners, LLC Long Term Care Discussion Group Washington, D.C. April 26,

TOPICS Background/Structure OPM Contracts The Claims Process Enrollment Growth Current Scene/Future Directions 2

Origins 3 Early LTCI policies: Medicare model/prior hospitalization Second generation individual policies Employer Group plans for associations, state governments, universities, labor unions, other Proctor & Gamble, IBM, GE, AT&T, and Fortune 500 market CalPERS LTCI Program Small group and work-site policies Early LTCI policies: Medicare model/prior hospitalization Second generation individual policies Employer Group plans for associations, state governments, universities, labor unions, other Proctor & Gamble, IBM, GE, AT&T, and Fortune 500 market CalPERS LTCI Program Small group and work-site policies

Long Term Care Security Act of 2000 (PL ) 4

Federal Long Term Care Insurance Program (FLTCIP) Created by Long Term Care Security Act of 2000 (PL ) Oversight by Congress Sponsored and Regulated by U.S. Office of Personnel Management (OPM) Master Contracts for seven years Fully Insured 5

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Federal Long Term Care Insurance Program (FLTCIP) 7 Enrollees subject to medical underwriting standards Uniform across all states Premiums 100% voluntary Care Coordination International Benefits Assets held in separate account Enrollees subject to medical underwriting standards Uniform across all states Premiums 100% voluntary Care Coordination International Benefits Assets held in separate account

FLTCIP 1st Contract OPM awarded first 7-year FLTCIP contract to John Hancock and MetLife in December 2001 Initial Early Enrollment Period in March Main enrollment period (July 2002 through January 2003) Largest national marketing campaign on LTCI to date 197,000 enrollees after 1 st Open Season 225,000 enrollees by contract end (Sept. 2009) 8

FLTCIP 2 nd Contract OPM awarded second 7-year FLTCIP contract to John Hancock in May 2009 Adoption of new 2.0 plan; increase for ACIO enrollees in 1.0 plan Special Decision Period: August 2009 through April nd Open Season: April 4, 2011 through June 24,

146,400 affected with 5%-25% increase depending upon enrollees age at purchase Personalized options with landing spots Support via website and specially- trained customer service representatives Special rate quote unit for other options 45% choose options to avoid increase; 43% choose to stay in 1.0 and pay increase FLTCIP Special Decision Period,

FLTCIP Open Season, April - June Open Season: April 4, 2011 – June 24, 2011 First abbreviated underwriting opportunity for non-enrolled applicants since 2002 More than 45,000 new people enrolled (20% increase) 70% of enrollments electronic

FLTCIP 2.0: New Benefits and Features – 100 % home health care – Calendar days – Stay-at-home benefit – 500 Informal Care Days Higher daily benefit amounts ($100 - $450) 2-year benefit period 4% Automatic Compound Inflation Option No catastrophic coverage limitation Enhanced home health care benefits

FLTCIP: Home Health Care Reimbursed at 100% of Daily Benefit from $100 to $450 per day Formal care by Home Health Agencies Adult day care Respite Care Informal care by friends, neighbors, and family members Stay-at-home benefits Care planning visits Home safety check Emergency medical response systems Durable medical equipment Caregiver training * Does not reduce maximum lifetime benefit 13

Registered nurses, with clinical experience, act as single point of contact Available for enrollees, and their qualified relatives, even if not enrolled Assessment, planning, service coordination, and counseling Dedicated resources assigned to each case Thoughtful utilization of benefits Claimants Satisfaction Level: 98% (+) since Programs start FLTCIP Care Coordination 14

AIA Presentation Claims Activity 150 new claims and 50 information/referral calls a month 2,600 claims active 9,100+ claims opened (program-to-date) 7,100 in benefit (program-to-date) Program currently paying over $6 million each month in claims Only cases of rescission have actually gone to court; no cases pending Point of Service YTD AIA Presentation

Independent Third Party Review Benchmark for consumer protection In cases of disputed eligibilities or claims, after denial of appeal, file may be submitted to independent third party for evaluation Third Party decision is binding Five Independent Third-Party Reviews, none of which have gone to court 16

AIA Presentation FLTCIP Technology and Service Enhancements Online Consulting Tool Full application online New secure personalized enrollee account and ability to make plan changes Enhanced security measures for protection of personally identifiable and personal health information Advanced fail-over plan to ensure continuity of administration

18 Enrollment Growth 18

19 Electronic Acquisition Model 19 Education & Decision Making - Web LTC & LTC Insurance Basics FLTCIP Product Features Application Web Approximately 70% submitted online 80% in Open Season Eligibility Online Consultant Tool Cost of Care in your Area Rate Quote Calculator Solicitation blast Direct clicks to Full Underwriting Abbreviated Underwriting

Long Term Care: Current Scene Total paid costs for LTC exceeded $250 billion in 2009 Call for review of major entitlements in view of budget deficits, long-term debt Longer life expectancy 78 million baby boomers entering retirement Millions of boomers under-saved, unprepared for retirement 20

Long Term Care: Future Directions Investment environment likely to remain challenging, volatile Self-insurance through savings, annuities, reverse mortgages Private LTCI most reliable form of protection More public-private partnerships likely Efforts to curb Medicaid costs Renewed attention to Medicare FLTCIP, other large-scale employer-based programs, preferred LTCI delivery models 21

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