1. © 2006 Towers Perrin Mike Lombardi June 29,2007 Vancouver PD-30 Lessons Learned Implementation of CICA 3855 CIA Annual Meeting

2. © 2006 Towers Perrin 2 History Town Hall (April, 2006) CIA Annual Meeting (June, 2006) CLIFR Educational Note OSFI Guideline D-10 MCCSR Changes CLHIA Tax Proposal AA Seminar (September, 2006) CIA General Meeting (October, 2006) CIA Annual Meeting (June, 2007)

3. © 2006 Towers Perrin 3 Panelists Mike Lombardi Blake Hill Chris Christaki Leonard Pressey

4. © 2006 Towers Perrin 4 Accounting changes 3 new accounting standards effective January 1,2007 S.3855 Financial Instruments – Recognition and Measurement S.3865 Hedges S.1530 Comprehensive Income Amendments S.4211 Replaces S.4210 – Life Insurance Enterprises AcG9 Financial Reporting by Life Insurance Enterprises Applies to all entities but affects the life insurance industry in a unique way due to linkage between asset and liability measurement Will significantly change the measurement of financial instruments and the presentation and disclosure of the financial statements

5. © 2006 Towers Perrin 5 Accounting changes (cont’d) All financial instruments must be classified Held To Maturity Held For Trading Available For Sale Loans and receivables Once and for all designation at inception based on management’s intention No restatement of prior periods Restate the opening balance sheet to recognize assets/liabilities at fair value to write-off previously deferred gains/losses to adjust opening surplus as a result of the above

6. © 2006 Towers Perrin 6 Issues Available for Sale anomaly Portfolio tainting rules OSFI restrictions on Fair Value options CALM implications MCCSR impact Tax impact Transition and implementation issues Impact on financial reporting and disclosure