1. Do not put content on the brand signature area Annuities & Regulation: a business point of view Tom Kliphuis, CEO of ING Insurance Central Europe Warsaw, 28 May 2009 International Seminar: “Investments and Payouts in Funded Pension Systems”

2. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Banking - Investments - Life Insurance - Retirement Services2 Introduction & some introductory remarks  Master’s degree in Business Economics  Head of Marketing – Nationale-Nederlanden Life  Regional Manager ING for Europe & South America  General Manager ING Afore (Mexican PF)  CEO of ING Chile  CEO ING Insurance Central Europe Tom Kliphuis, Pleased to meet you Optimal regulation is necessary: pensions is about long-term savings  Trust is crucial; strong supervision supports to build trust Regulation must create level playing field Allow for sufficient assets in international stocks and bonds  Spread risks, less ‘over-investing’ in local economy, good investments is key (even more important than cost awareness) Regulators must protect customers against too risky asset allocation  Pensions is spread business; hence insurers have pressure for risky assets Regulation-imposed yield guarantees should be eliminated

3. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Banking - Investments - Life Insurance - Retirement Services3 Regulation should allow for flexibility in solutions Allow people to make voluntary contributions to a mandatory system  To improve the conversion rate  With some tax incentives To start the pay-out phase: allow for flexible timing since annuities depend heavily on interest rates on any given moment Based on 1 or 2 lives Lifelong annuities or with limited duration, no lump sum payments * source: Eurostat, 2006

4. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Banking - Investments - Life Insurance - Retirement Services4 Some recommendations Make sure there is a strong tax incentive for employees and employers Create certain limits to commission for agents and brokers Make it attractive enough for providers to make a profit  In Slovakia, DSS is not attractive Do regular operational audits and ‘rate’ pension providers  E.g. for investment return, operational excellence, transparency

5. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Banking - Investments - Life Insurance - Retirement Services5 The system needs stability and consistent political support Regulation should be independent of day-to-day politics System needs stability, no volatility or opportunism The Netherlands since 1980s  Changing of rules and legislation every 5 years  Constant change of regulations can have big impact on cost

6. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Banking - Investments - Life Insurance - Retirement Services6 Key messages Create a level playing field Allow for sufficient international assets allocation Do regular audits and rate pension providers The system needs stability ….. ………..because pensions is all about trust Thank You for Your Attention