1. 1 Enterprise Scorecard Measurement Definitions 01/15/99

2. 2 Contents  Measurement overview----------------------3  Financial Perspective -------------------------5 –Earnings growth –GAAP ROE –RBC –Capital plan –Product & distribution mix  Customer -----------------------------------------11 –Rating within peer group –Customer satisfaction index –Retention –Sales versus plan (variance) –Policies under administration – Total policyholders / total members –Product profitability  Process -------------------------------------------18 –Growth in target markets –Expense ratios (3) –Technology ROI  Learning & Growth -----------------------------22 –PDP’s completed leadership& employees –Incentive alignment –Employee survey results –Leadership strength –Employee ROI –Change initiative status Page

3. Enterprise Scorecard Objectives: Win through people, Grow profitably, Create value Financial Perspective Learning & Growth Customer Perspective Internal Process Perspective Growth in target market segments vs. plan Technology ROI Expense measures (e.g.Ttl general expenses as % of Ttl prem.; Investment expense ratio) Employee survey results PDP’s completed for all leadership & % employees Leadership strength ROI (employee) Incentive alignment Initiative change status Earnings growth Unleveraged GAAP ROE RBC Capital plan Product & distribution mix Policies under administration Sales (Premium) vs. plan (variance) Product profitability Retention (Policyholders, Agents, “Partners”) Customer Satisfaction Index Rating within peer group To be an innovative, growing, high performance, public financial services enterprise that makes the future better for all our stakeholders.

4. 4 Enterprise Performance Measures Earnings Growth 1 GAAP ROE 1 Enhance Economic Value Product profitability (New & existing products) 2 Rating 1 % PDP Forms Completed 2 Employee ROI 1 Employee Sat. Index 2 Incentive Alignment 2 Policies under administration 1 Total policies / Total members 1 Sales versus plan 1 Target Market Growth 2 Technology ROI 1 Retention (lapse) 1 Customer Sat. Index 2 % PDP Forms Completed (Leadership) 2 Leadership Strength 2 Financial Customer Process Learning & Growth Expense Ratios 1 Product Mix 1 Distribution Mix 2 RBC 1 Capital Requirements 1 1 Data currently available 2 Data requires development Initiative Status Measure 1 Annual Quarterly Monthly Frequency

5. 5 Financial

6. 6 Earnings Growth Measure: Earnings Growth Owner: _____________________________ Perspective: FinancialAvailability: Yes No Critical Success Factor: Quality earnings growth consistent Data Source: Actual and project consolidated with plan Definition: Percentage growth in consolidated GAAP earnings as defined by: TO BE COMPLETED Formula: (Current Qtr Profit - Prior Qtr Profit )/ Prior Qtr Profit * 100%. Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:___________ Current Results: ________________________ Target Results: Short Term: Long Term: 15% Alternative Measure(s): * Comments: Check growth rate targets. % increase over last quarter. Benchmark Internal External Source: _______________________________

7. 7 Unleveraged GAAP ROE Measure: Unleveraged GAAP ROE Owner: _____________________________ Perspective: Financial Availability: Yes No Critical Success Factor: Quality ROE consistent with plan Data Source: Actual and project consolidated Definition: Consolidated GAAP earnings divided by average GAAP equity Formula: Industry & AUL’s formula FORMULA TO BE COMPLETED Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:___________ Current Results: ________________________ Target Results: Short Term: Long Term: 10 - 15% Alternative Measure(s): Comments: Check formula differences. Inclusive of Investment Gains? Benchmark Internal External Source: Moody’s and other (TBD)

8. 8 Risk-Based Capital Measure: RBCOwner: _____________________________ Perspective: Financial Availability: Yes No Critical Success Factor: Capital & Risk ManagementData Source: Blue Book Definition: Consolidated GAAP earnings divided by average GAAP equity Formula: per NAIC rules Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:___________ Current Results: ________________________ Target Results: Short Term: 270% Long Term: TBD (250%) Alternative Measure(s): Capital Plan, ALM Comments: Benchmark Internal External Source: _______________________________

9. 9 Capital Plan Measure: Capital PlanOwner: _____________________________ Perspective: FinancialAvailability: Yes No Critical Success Factor: Capital & Risk ManagementData Source: TO BE DETERMINED Definition: Consolidated quarterly projection of capital needs for all products projected for 6 quarters and sources of funds (e.g. LOB, AUL, other) Formula: Summation of total capital needs for all products by quarter for next 6 quarters and sources of funds Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:___________ Current Results: ________________________ Target Results: Short Term: Long Term: Alternative Measure(s): RBC, ALM Comments: Benchmark Internal External Source: _______________________________

10. 10 Product & Distribution Mix Measure: Product & Distribution MixOwner: _____________________________ Perspective: Financial Availability: Yes No Critical Success Factor: Balanced Portfolio of BusinessData Source: LIMRA Definition: Sales by product lines* versus the industry Sales by distribution channel10% or greater share of production (Agents, IMO, Legacy, Joint Venture, Strategic Alliance, Other Formula: Sales by product line Sales by channel Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:___________ Current Results: ________________________ Target Results: Short Term: Sales vs. plan 4 Channels with > 10% production Alternative Measure(s): Product line ranking versus industry (goal = top 10) Comments: Annuity production will count only retained business (not 100% reinsured). Benchmark Internal External Source: _______________________________ “Mock Data”

11. 11 Customer

12. 12 Rating within Peer Group Measure: Rating within Peer GroupOwner: _____________________________ Perspective: CustomerAvailability: Yes No Critical Success Factor: Maintain appropriate ratingData Source: Definition: Ratings from A.M. Best, Duff & Phelps, S&P and Moody’s Formula: Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:___________ Current Results: ________________________ Target Results: Short Term: Current ratings Long Term: to be determined Alternative Measure(s): RBC, Capital Plan Comments: Benchmark Internal External Source: _______________________________

13. 13 Customer Satisfaction Index Measure: Customer Satisfaction IndexOwner: _____________________________ Perspective: Customer Availability: Yes No Critical Success Factor: Provide quality service meetingData Source: _________________ customer needs Definition: 4 surveys rating customer satisfaction Formula: (TBD) Results from 1) CAP Survey, 2) New Business Survey, 3) Surrender Survey (top non-financial reasons), 4) Agent Survey Frequency: DailyQuarterly WeeklyAnnually (Agent Survey) MonthlyOther:___________ Current Results: ________________________ Target Results: Short Term: LIMRA CAP Survey above industry averages, New Business > 4.5, 95% positive results from agents, Alternative Measure(s): Retention Comments: Agent survey requires annual development (with AGA). Review and redefine Surrender Survey Benchmark Internal External Source: _______________________________ Agent Survey to be developed Mock Data

14. 14 Retention Measure: Retention Owner: _____________________________ Perspective: Customer Availability: Yes No Critical Success Factor: Provide quality service meetingData Source: #’s 1 & 4 Available customer needs Definition: Retention of policyholders, agents and partners Formula: (TBD) 1) Lapse study, 2) Policyholders with > 1 policy, 3) IMO’s, GA’s, and Agents meeting minimum requirements, 4) No. of new strategic partners Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:___________ Current Results: ________________________ Target Results: Short Term: Lapse Study: Actual vs. Expected, Minimum contract no.’s: IMA’s 200,000, GA’s 20,000, Agents 5000, Strategic partner growth: 4 Alternative Measure(s): Customer Satisfaction Survey results Comments: Develop numbers 2 and 3 in formula Benchmark Internal External Source: _______________________________

15. 15 Sales versus Plan (Variance) Measure: Sales versus plan (variance)Owner: _____________________________ Perspective: Customer Availability: Yes No Critical Success Factor: Expand customer base & penetrationData Source: Board Report, End of Mo. Sales of existing customers Definition: Continuous Paid Premium Equivalent compared to plan (measurement of the variance) Formula: Sales: 100% of WL Premium + Target of UL & VUL + 10% x Single Premium + 10% x Annuity premium collected (per month compared to prior year) Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:___________ Current Results: ________________________ Target Results: Short Term: X% variance Alternative Measure(s): Policies Under Administration Comments: Ensure formula accurately reflects actual revenue Benchmark Internal External Source: _______________________________ Mock Data

16. 16 Policies Under Administration Measure: Policies Under Administration(2)Owner: _____________________________ Perspective: Customer Availability: Yes No Critical Success Factor: Expand customer base & penetrationData Source: Available but not monthly of existing customers Definition: Volume growth in policies under administration and Policyholders with multiple policies Formula: 1) Total policies under administration, 2) # of policies/No. of members Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:___________ Current Results: ________________________ Target Results: Short Term: Alternative Measure(s): Sales, Policyholders with > 1 policy, # of policies/No. of members Comments: Review prior year performance to assist in target setting. Determine if compared month to month or current month vs. year ago for seasonality adjustments. Benchmark Internal External Source: _______________________________

17. 17 Product Profitability Measure: Product profitabilityOwner: _____________________________ Perspective: Customer Availability: Yes No Critical Success Factor: Develop products that deliverData Source: _______________________ true value to the customer and enterprise Definition: ROE and ROI for new and existing products Formula: ROI and ROE by product Frequency: DailyQuarterly: Existing products WeeklyAnnually MonthlyOther: as-needed for new products Current Results: ________________________ Target Results: GAAP ROE: 12% Subsidiaries: ROI: 12%, TS - 1.75 CAL, ILICo: ROI = 10%, TS = 3.00 CAL Alternative Measure(s): Comments: Benchmark Internal External Source: _______________________________

18. 18 Process

19. 19 Growth in Target Markets Measure: Growth in target marketsOwner: _____________________________ Perspective: Process Availability: Yes No Critical Success Factor: Alignment of products, services &Data Source: _________________ delivery to target customer segments Definition: Sales growth. Target Markets: Business Owners and Retirement Savings Formula: Premium sales growth by market> (Current Month Sales - Prior Month Sales) / Prior Month Sales Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:___________ Current Results: ________________________ Target Results: Short Term: 10% annual growth Alternative Measure(s): Comments: Report requires development. New markets may be added in the future Benchmark Internal External Source: _______________________________ Should be % increase Mock Data

20. 20 Expense Ratios Measure: Expense RatiosOwner: _____________________________ Perspective: Process Availability: Yes No Critical Success Factor: Efficient & Effective Business Data Source: GL Fundamentals Definition: Expenses as a % of premium and assets Formula: 1) General Expenses / Total Premium 2) General Expense/Ave. Assets 3) Expenses + Commissions / Ave Assets Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:___________ Current Results: ________________________ Target Results: Short Term: Long Term: Alternative Measure(s): Different expense ratios, process cycle times Comments: Benchmark Internal External Source: Moody’s Sample Data

21. 21 Technology ROI Measure: Technology ROIOwner: Larry H. Perspective: ProcessAvailability: Yes No Critical Success Factor: Optimize Technology Infrastructure_ Data Source: GL Definition: Measures value added of investing in information technology. Based on Saratoga’s Human Capital ROI. Formula: (Revenue - (General Expenses - IT Expenses))/ (IT Expenses) Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:_________ Current Results: 15 Target Results: Short Term: 18, Long Term 20 Alternative Measure(s): Technology Scorecard Index Comments: Excludes outsourcing IT costs Benchmark Internal External Source: LOMA TIPE STUDY

22. 22 Learning & Growth

23. 23 PDP’s Completed for All Leadership Measure: PDP’s completed for all leadershipOwner: __________________________ Perspective: Learning & GrowthAvailability: Yes No Critical Success Factor: Development of future and currentData Source: HR (TBD) leaders Definition: Professional Development Plans completed jointly by employee and manager and reviewed and updated annually Formula: # PDP’s completed/(# of managers + officers) Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:_________ Current Results: _______________________ Target Results: Short Term: 100% completion Alternative Measure(s): Comments: Benchmark Internal External Source: _________________________

24. 24 PDP’s Completed for All Employees Measure: PDP’s completed for all employeesOwner: __________________________ Perspective: Learning & Growth Availability: Yes No Critical Success Factor: Recruiting & RetentionData Source: HR (TBD) and Education & Training Definition: Professional Development Plans completed jointly by employee and manager and reviewed and updated annually Formula: # PDP’s completed/(# of employees - managers - officers) Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:_________ Current Results: _______________________ Target Results: Short Term: 50% completion by ‘99 Alternative Measure(s): Comments: Benchmark Internal External Source: _________________________

25. 25 Incentive Alignment Measure: Incentive AlignmentOwner: __________________________ Perspective: Learning & Growth Availability: Yes No Critical Success Factor: Well aligned incentivesData Source: AIP, LTI, Sales Incentives and Education & Training Definition: Incentive plans are in place which link individual and corporate success. Ensure a correlation between salaries + bonuses + long term incentives and GAAP ROE Formula: (TO BE DETERMINED) Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:_________ Current Results: _______________________ Target Results: Short Term: Balanced Scorecard measures Alternative Measure(s): Compensation benchmark Comments: Benchmark Internal External Source: _________________________

26. 26 Employee Survey Results Measure: Employee Survey ResultsOwner: __________________________ Perspective: Learning & GrowthAvailability: Yes No Critical Success Factor: Employee SatisfactionData Source: Possible LOMA customized survey Definition: Annual employee survey results covering critical areas of concern Formula: (TBD) Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:_________ Current Results: _______________________ Target Results: Short Term: Meet benchmarks Long Term: Exceed benchmarks Alternative Measure(s): Other survey results, exit interview results, new hire survey results, phone calls/requests Comments: Possible index entailing quality of work life, employee involvement, quality service, teamwork and employee morale Benchmark Internal External Source: LOMA

27. 27 Leadership Strength Measure: Leadership StrengthOwner: __________________________ Perspective: Learning & Growth Availability: Yes No Critical Success Factor: Developing current & future leadersData Source: Internal analysis tool (TBD) Definition: Depth of leadership skills and talent at all levels of the organization to ensure both short and long term success Formula: (TBD) Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:_________ Current Results: _______________________ Target Results: Short Term: Alternative Measure(s): PDP’s completed for all leaders, skill bank database, competency assessment Comments: Initial annual assessment and then quarterly. Includes succession planning, talent audit form and discussion of needs vs. resources Benchmark Internal External Source: __________________________

28. 28 Employee ROI Measure: Employee ROIOwner: __________________________ Perspective: Learning & Growth Availability: Yes No Critical Success Factor: Education & TrainingData Source: GL Definition: The value added of investing in the organizations human assets Formula: (Revenue - (Operating Expense - Comp Costs - Benefit Costs - PTNW))/ (Comp Costs + Benefit Costs + PTNW) Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:_________ Current Results: _______________________ Target Results: Short Term: Exceed industry benchmark Alternative Measure(s): Comments: Data available by company size and percentiles. Consider quarterly reporting. Benchmark Internal External Source: Saratoga Report

29. 29 Change Initiative Status Measure: Change Initiative StatusOwner: __________________________ Perspective: Learning & Growth Availability: Yes No Critical Success Factor: Employee SatisfactionData Source: TBD Definition: Current status of major enterprise change initiatives for monitoring and evaluation on resource usage Formula: # of initiatives (started, completed, on- going), status (on-time, ahead, delayed, postponed, Owner, resources involved Frequency: DailyQuarterly WeeklyAnnually MonthlyOther:_________ Current Results: _______________________ Target Results: Short Term: Alternative Measure(s): Comments: Benchmark Internal External Source: