PD-30 Lessons Learned Implementation of CICA Annual Meeting – Vancouver Blake A. Hill, AVP & Actuary

Early Stages Review started Early (Summer ’06) – Cross functional approach Actuaries, Accountants and Investments all at table to prepare and review – Quarterly CALM implementation Bigger issue than 3855 – Required review of process Ensure 3855 fit into timelines of reporting – Investment Systems – Investment Reporting – Opening Balance Sheet – Financial Reporting » CALM Reserve Roll forward 2007 Annual Meeting Assemblée annuelle Annual Meeting Assemblée annuelle 2007

Issues Investment Systems – Not a big change Maintained old Book Value approach with additional details to get Statement Value Investment Reporting – Additional breakdown good but.. Need more details still to ensure proper accounting of special circumstances – I.E. Mortgage Prepayment » Break Fees vs. MVA into proper accounting » Fee Income, Capitalized Yield Spread 2007 Annual Meeting Assemblée annuelle Annual Meeting Assemblée annuelle 2007

Issues Opening Balance Sheet – Started work very early on the process – Used experience with past PGAAP work Tight controls on who can post entries Add Accounting Type to monitor direct impact of 3855 on B/S – CGAAP Accnt + Transition Accnt = 3855 Accnt – Unanticipated Issues HFT assets backing liabilities and AFS assets backing surplus co mingled 2007 Annual Meeting Assemblée annuelle Annual Meeting Assemblée annuelle 2007

Issues Opening Balance Sheet – CALM Reserve If Loans (Private Debt & Mortgages) are disinvested – Sold at MV but currently held at Book » Correct, but if not actually sold creates issues Deferred Net Gains – Removal is a benefit of 3855 as it reduces confusion and work effort to properly account for in reserves 2007 Annual Meeting Assemblée annuelle Annual Meeting Assemblée annuelle 2007

Issues Financial Reporting – CALM Reserve Roll Forward Re tooling of process to capture additional FMV changes – To simplify reconciliation, add 100% of asset change to reserves then adjust where necessary – Getting necessary information from Expected (AXIS) and Actuals very theoretical for sometimes small impacts » Currently back under review to better simplify explanations Overall great learning opportunity – Really had to dig in and understand all the interactions with CALM 2007 Annual Meeting Assemblée annuelle Annual Meeting Assemblée annuelle 2007

Issues Financial Reporting – How and where to split and report changes in asset values in an SOE – More and more detail on investment income components and by asset type needed – Comparison to USGAAP CGAAP impact is neutral but by line item in an SOE material differences 2007 Annual Meeting Assemblée annuelle Annual Meeting Assemblée annuelle 2007

Issues Tax Reserves – Impact of 3855 with and without pending legislation – Need to consider CLIFR guidance – Not yet finalized, carryover impact from changes across financial reporting years 2007 Annual Meeting Assemblée annuelle Annual Meeting Assemblée annuelle 2007