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					ST ANDREW'S LIFE ASSURANCE PLC




    Annual FSA Insurance Returns for the year ended

                  31 December 2010


           IPRU(INS) Appendices 9.1, 9.3, 9.4, 9.6
                                           Contents

Balance Sheet and Profit and Loss Account

Form 2           Statement of solvency - long-term insurance business       1
Form 3           Components of capital resources                            3
Form 13          Analysis of admissible assets                              6
Form 14          Long term insurance business liabilities and margins      12
Form 15          Liabilities (other than long term insurance business)     13
Form 16          Profit and loss account (non-technical account)           14
Form 17          Analysis of derivative contracts                          15

Long Term Insurance Business: Revenue Account and Additional Information

Form 40          Revenue account                                           16
Form 41          Analysis of premiums                                      17
Form 42          Analysis of claims                                        18
Form 43          Analysis of expenses                                      19
Form 44          Linked funds balance sheet                                20
Form 45          Revenue account for internal linked funds                 21
Form 46          Summary of new business                                   22
Form 47          Analysis of new business                                  23
Form 48          Assets not held to match linked liabilities               25
Form 50          Summary of mathematical reserves                          26
Form 51          Valuation summary of non-linked contracts (other than     27
                 accumulating with-profits contracts)
Form 53          Valuation summary of property linked contracts            31
Form 55          Unit prices for internal linked funds                     33
Form 58          Distribution of surplus                                   34
Form 60          Long-term insurance capital requirement                   35


Supplementary notes to the return                                          36

Additional information on derivative contracts                             44

Additional information on controllers                                      45

Abstract of the Valuation Report                                           46

Directors' Certificate                                                     58

Auditor's Report                                                           59
22032011:14:11:08




                                                                                                                             Form 2

 Statement of solvency - long-term insurance business

 Name of insurer                                  ST ANDREW'S LIFE ASSURANCE PLC

 Global business

 Financial year ended                             31 December 2010

 Solo solvency calculation                                  Company                    GL/
                                                            registration               UK/    day month   year       Units
                                                            number                     CM

                                                  R2                3104670              GL   31   12     2010        £000

                                                                                                As at end of       As at end of
                                                                                               this financial      the previous
                                                                                                    year               year


                                                                                                     1                  2

   Capital resources

   Capital resources arising within the long-term insurance fund                         11               128041             215717

   Capital resources allocated towards long-term insurance business arising
                                                                                         12               479336             301279
   outside the long-term insurance fund

   Capital resources available to cover long-term insurance business capital
                                                                                         13               607377             516996
   resources requirement (11+12)

   Guarantee fund

   Guarantee fund requirement                                                            21                45879             74306

   Excess (deficiency) of available capital resources to cover guarantee fund
                                                                                         22               561498             442690
   requirement

   Minimum capital requirement (MCR)

   Long-term insurance capital requirement                                               31               137636             222919

   Resilience capital requirement                                                        32                 2700             26400

   Base capital resources requirement                                                    33                 3040              3128

   Individual minimum capital requirement                                                34               140336             249319

   Capital requirements of regulated related undertakings                                35

   Minimum capital requirement (34+35)                                                   36               140336             249319

   Excess (deficiency) of available capital resources to cover 50% of MCR                37               537209             392337

   Excess (deficiency) of available capital resources to cover 75% of MCR                38               502125             330007

   Enhanced capital requirement

   With-profits insurance capital component                                              39

   Enhanced capital requirement                                                          40               140336             249319

   Capital resources requirement (CRR)

   Capital resources requirement (greater of 36 and 40)                                  41               140336             249319

   Excess (deficiency) of available capital resources to cover long-term insurance
                                                                                         42               467041             267677
   business CRR (13-41)

   Contingent liabilities

   Quantifiable contingent liabilities in respect of long-term insurance business as
   shown in a supplementary note to Form 14
                                                                                         51




                                                                             1
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                                                                                Form 2

 Covering Sheet to Form 2

 Name of insurer            ST ANDREW'S LIFE ASSURANCE PLC

 Global business

 Financial year ended       31 December 2010




                                                        P D Loney    Director




                                                        K Luscombe   Director




                                                        A G Kane     Director




 Date : 28 March 2011




                                               2
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                                                                                                                                     Form 3
                                                                                                                                   (Sheet 1)
Components of capital resources

Name of insurer                                   ST ANDREW'S LIFE ASSURANCE PLC

Global business

Financial year ended                              31 December 2010
                                                              Company             GL/
                                                              registration        UK/              day month      year                    Units
                                                              number              CM

                                                   R3             3104670               GL       31        12      2010             £000

                                                                                    General    Long-term         Total as at      Total as at
                                                                                   insurance   insurance         the end of       the end of
                                                                                    business    business        this financial   the previous
                                                                                                                     year            year
                                                                                        1          2                  3               4

  Core tier one capital

  Permanent share capital                                                    11                    360000             360000          360000

  Profit and loss account and other reserves                                 12                    521054             521054          469067

  Share premium account                                                      13

  Positive valuation differences                                             14                                                           33419

  Fund for future appropriations                                             15

  Core tier one capital in related undertakings                              16

  Core tier one capital (sum of 11 to 16)                                    19                    881054             881054          862486

  Tier one waivers
  Unpaid share capital / unpaid initial funds and calls for
  supplementary contributions
                                                                             21

  Implicit Items                                                             22

  Tier one waivers in related undertakings                                   23

  Total tier one waivers as restricted (21+22+23)                            24

  Other tier one capital

  Perpetual non-cumulative preference shares as restricted                   25
  Perpetual non-cumulative preference shares in related
  undertakings
                                                                             26

  Innovative tier one capital as restricted                                  27

  Innovative tier one capital in related undertakings                        28


  Total tier one capital before deductions
                                                                             31                    881054             881054          862486
  (19+24+25+26+27+28)
  Investments in own shares                                                  32

  Intangible assets                                                          33

  Amounts deducted from technical provisions for discounting                 34

  Other negative valuation differences                                       35

  Deductions in related undertakings                                         36

  Deductions from tier one (32 to 36)                                        37

  Total tier one capital after deductions (31-37)                            39                    881054             881054          862486




                                                                             3
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                                                                                                                                 Form 3
                                                                                                                               (Sheet 2)
Components of capital resources

Name of insurer                                    ST ANDREW'S LIFE ASSURANCE PLC

Global business

Financial year ended                               31 December 2010
                                                          Company             GL/
                                                          registration        UK/              day month      year                    Units
                                                          number              CM

                                                   R3         3104670               GL       31        12       2010            £000

                                                                                General    Long-term         Total as at      Total as at
                                                                               insurance   insurance         the end of       the end of
                                                                                business    business        this financial   the previous
                                                                                                                 year            year
                                                                                    1          2                  3               4

  Tier two capital
  Implicit items, (tier two waivers and amounts excluded from
                                                                         41
  line 22)
  Perpetual non-cumulative preference shares excluded from
                                                                         42
  line 25

  Innovative tier one capital excluded from line 27                      43
  Tier two waivers, innovative tier one capital and perpetual non-
  cumulative preference shares treated as tier two capital (41 to        44
  43)

  Perpetual cumulative preference shares                                 45

  Perpetual subordinated debt and securities                             46

  Upper tier two capital in related undertakings                         47

  Upper tier two capital (44 to 47)                                      49



  Fixed term preference shares                                           51

  Other tier two instruments                                             52

  Lower tier two capital in related undertakings                         53

  Lower tier two capital (51+52+53)                                      59



  Total tier two capital before restrictions (49+59)                     61

  Excess tier two capital                                                62

  Further excess lower tier two capital                                  63
  Total tier two capital after restrictions, before deductions
                                                                         69
  (61-62-63)




                                                                         4
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                                                                                                                                   Form 3
                                                                                                                                 (Sheet 3)
Components of capital resources

Name of insurer                                ST ANDREW'S LIFE ASSURANCE PLC

Global business

Financial year ended                           31 December 2010
                                                            Company             GL/
                                                            registration        UK/              day month      year                    Units
                                                            number              CM

                                                R3              3104670               GL       31        12       2010            £000

                                                                                  General    Long-term         Total as at      Total as at
                                                                                 insurance   insurance         the end of       the end of
                                                                                  business    business        this financial   the previous
                                                                                                                   year            year
                                                                                      1          2                  3               4

  Total capital resources
  Positive adjustments for regulated non-insurance related
                                                                           71
  undertakings
  Total capital resources before deductions
                                                                           72                   881054              881054          862486
  (39+69+71)

  Inadmissible assets other than intangibles and own shares                73                   273677              273677          345490

  Assets in excess of market risk and counterparty limits                  74

  Deductions for related ancillary services undertakings                   75

  Deductions for regulated non-insurance related undertakings              76

  Deductions of ineligible surplus capital                                 77
  Total capital resources after deductions
                                                                           79                   607377              607377          516996
  (72-73-74-75-76-77)

  Available capital resources for GENPRU/INSPRU tests

  Available capital resources for guarantee fund requirement               81                   607377              607377          516996

  Available capital resources for 50% MCR requirement                      82                   607377              607377          516996

  Available capital resources for 75% MCR requirement                      83                   607377              607377          516996

  Financial engineering adjustments

  Implicit items                                                           91

  Financial reinsurance - ceded                                            92

  Financial reinsurance - accepted                                         93

  Outstanding contingent loans                                             94

  Any other charges on future profits                                      95
  Sum of financial engineering adjustments
  (91+92-93+94+95)
                                                                           96




                                                                           5
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                                                                                                                                 Form 13
                                                                                                                                (Sheet 1)
Analysis of admissible assets

Name of insurer                              ST ANDREW'S LIFE ASSURANCE PLC

Global business

Financial year ended                         31 December 2010

Category of assets                           Total other than long term insurance business assets
                                                      Company              GL/                                           Category
                                                      registration         UK/      day month year      Units               of
                                                      number               CM                                             assets


                                              R13            3104670         GL     31    12     2010      £000             1
                                                                                               As at end of this     As at end of the
                                                                                                financial year        previous year


                                                                                                      1                     2
 Land and buildings                                                                 11
 Investments in group undertakings and participating interests
                                              Shares                                21
 UK insurance dependants
                                              Debts and loans                       22
                                              Shares                                23
 Other insurance dependants
                                              Debts and loans                       24
                                              Shares                                25
 Non-insurance dependants
                                              Debts and loans                       26
                                              Shares                                27
 Other group undertakings
                                              Debts and loans                       28
                                              Shares                                29
 Participating interests
                                              Debts and loans                       30
 Other financial investments
 Equity shares                                                                      41
 Other shares and other variable yield participations                               42
 Holdings in collective investment schemes                                          43                      473660                  285043

 Rights under derivative contracts                                                  44
                                              Approved                              45
 Fixed interest securities
                                              Other                                 46
                                              Approved                              47
 Variable interest securities
                                              Other                                 48
 Participation in investment pools                                                  49
 Loans secured by mortgages                                                         50

 Loans to public or local authorities and nationalised industries or undertakings   51

 Loans secured by policies of insurance issued by the company                       52
 Other loans                                                                        53
 Bank and approved credit & financial         One month or less withdrawal          54
 institution deposits                         More than one month withdrawal        55
 Other financial investments                                                        56
 Deposits with ceding undertakings                                                  57
                                              Index linked                          58
 Assets held to match linked liabilities
                                              Property linked                       59



                                                                       6
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                                                                                                                                  Form 13
                                                                                                                                 (Sheet 2)
Analysis of admissible assets

Name of insurer                            ST ANDREW'S LIFE ASSURANCE PLC

Global business

Financial year ended                       31 December 2010

Category of assets                         Total other than long term insurance business assets
                                                   Company               GL/                                              Category
                                                   registration          UK/    day month year         Units                 of
                                                   number                CM                                                assets


                                            R13          3104670           GL   31   12     2010        £000                 1

                                                                                          As at end of this           As at end of the
                                                                                           financial year              previous year


                                                                                                   1                         2
 Reinsurers' share of technical provisions

 Provision for unearned premiums                                                60

 Claims outstanding                                                             61

 Provision for unexpired risks                                                  62

 Other                                                                          63

 Debtors and salvage
                                             Policyholders                      71
 Direct insurance business
                                             Intermediaries                     72
 Salvage and subrogation recoveries                                             73
                                             Accepted                           74
 Reinsurance
                                             Ceded                              75
                                             due in 12 months or less           76
 Dependants
                                             due in more than 12 months         77
                                             due in 12 months or less           78
 Other
                                             due in more than 12 months         79
 Other assets

 Tangible assets                                                                80
 Deposits not subject to time restriction on withdrawal with approved
                                                                                81                             5676                   16236
 institutions

 Cash in hand                                                                   82

 Other assets (particulars to be specified by way of supplementary note)        83

 Accrued interest and rent                                                      84

 Deferred acquisition costs (general business only)                             85

 Other prepayments and accrued income                                           86


 Deductions from the aggregate value of assets                                  87


 Grand total of admissible assets after deduction of admissible assets
 in excess of market risk and counterparty limits (11 to 86 less 87)
                                                                                89                        479336                     301279




                                                                    7
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                                                                                                                                   Form 13
                                                                                                                                  (Sheet 3)
Analysis of admissible assets

Name of insurer                              ST ANDREW'S LIFE ASSURANCE PLC

Global business

Financial year ended                         31 December 2010

Category of assets                           Total other than long term insurance business assets
                                                     Company                 GL/                                           Category
                                                     registration            UK/   day month year          Units              of
                                                     number                  CM                                             assets

                                              R13          3104670            GL   31    12     2010        £000              1

                                                                                              As at end of this        As at end of the
                                                                                               financial year           previous year


                                                                                                       1                      2

Reconciliation to asset values determined in accordance
with the insurance accounts rules or international
accounting standards as applicable to the firm for the
purpose of its external financial reporting

 Total admissible assets after deduction of admissible assets
                                                                                   91                         479336                301279
 in excess of market risk and counterparty limits (as per line 89 above)

 Admissible assets in excess of market and counterparty limits                     92

 Inadmissible assets directly held                                                 93

 Capital resources requirement deduction of regulated related
                                                                                   94
 undertakings

 Ineligible surplus capital and restricted assets in regulated related
                                                                                   95
 insurance undertakings

 Inadmissible assets of regulated related undertakings                             96

 Book value of related ancillary services undertakings                             97
 Other differences in the valuation of assets (other than for assets
                                                                                   98
 not valued above)

 Deferred acquisition costs excluded from line 89                                  99

 Reinsurers' share of technical provisions excluded from line 89                   100

 Other asset adjustments (may be negative)                                         101

 Total assets determined in accordance with the insurance accounts
 rules or international accounting standards as applicable to the firm             102                        479336                301279
 for the purpose of its external financial reporting (91 to 101)



 Amounts included in line 89 attributable to debts due from related
 insurers, other than those under contracts of insurance or reinsurance
                                                                                   103




                                                                         8
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                                                                                                                                    Form 13
                                                                                                                                   (Sheet 1)
Analysis of admissible assets

Name of insurer                              ST ANDREW'S LIFE ASSURANCE PLC

Global business

Financial year ended                         31 December 2010

Category of assets                           Total long term insurance business assets
                                                      Company              GL/                                              Category
                                                      registration         UK/      day month year      Units                  of
                                                      number               CM                                                assets


                                              R13            3104670         GL     31    12     2010      £000               10
                                                                                               As at end of this        As at end of the
                                                                                                financial year           previous year


                                                                                                      1                        2
 Land and buildings                                                                 11
 Investments in group undertakings and participating interests
                                              Shares                                21
 UK insurance dependants
                                              Debts and loans                       22
                                              Shares                                23
 Other insurance dependants
                                              Debts and loans                       24
                                              Shares                                25
 Non-insurance dependants
                                              Debts and loans                       26
                                              Shares                                27
 Other group undertakings
                                              Debts and loans                       28
                                              Shares                                29
 Participating interests
                                              Debts and loans                       30
 Other financial investments
 Equity shares                                                                      41
 Other shares and other variable yield participations                               42
 Holdings in collective investment schemes                                          43                      343976                     614078

 Rights under derivative contracts                                                  44                          70287                   4500
                                              Approved                              45                           994
 Fixed interest securities
                                              Other                                 46
                                              Approved                              47
 Variable interest securities
                                              Other                                 48
 Participation in investment pools                                                  49
 Loans secured by mortgages                                                         50

 Loans to public or local authorities and nationalised industries or undertakings   51

 Loans secured by policies of insurance issued by the company                       52
 Other loans                                                                        53
 Bank and approved credit & financial         One month or less withdrawal          54
 institution deposits                         More than one month withdrawal        55
 Other financial investments                                                        56
 Deposits with ceding undertakings                                                  57
                                              Index linked                          58
 Assets held to match linked liabilities
                                              Property linked                       59                    11574322                 12504872




                                                                       9
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                                                                                                                                   Form 13
                                                                                                                                  (Sheet 2)
Analysis of admissible assets

Name of insurer                            ST ANDREW'S LIFE ASSURANCE PLC

Global business

Financial year ended                       31 December 2010

Category of assets                         Total long term insurance business assets
                                                   Company               GL/                                               Category
                                                   registration          UK/    day month year         Units                  of
                                                   number                CM                                                 assets


                                            R13          3104670           GL   31   12     2010        £000                 10

                                                                                          As at end of this            As at end of the
                                                                                           financial year               previous year


                                                                                                   1                          2
 Reinsurers' share of technical provisions

 Provision for unearned premiums                                                60

 Claims outstanding                                                             61

 Provision for unexpired risks                                                  62

 Other                                                                          63

 Debtors and salvage
                                             Policyholders                      71                             11087                   6215
 Direct insurance business
                                             Intermediaries                     72                              3833                   5254

 Salvage and subrogation recoveries                                             73
                                             Accepted                           74
 Reinsurance
                                             Ceded                              75                              2739                   2197

                                             due in 12 months or less           76
 Dependants
                                             due in more than 12 months         77
                                             due in 12 months or less           78                             36281                  19531
 Other
                                             due in more than 12 months         79
 Other assets

 Tangible assets                                                                80
 Deposits not subject to time restriction on withdrawal with approved
                                                                                81
 institutions

 Cash in hand                                                                   82

 Other assets (particulars to be specified by way of supplementary note)        83

 Accrued interest and rent                                                      84                                13

 Deferred acquisition costs (general business only)                             85

 Other prepayments and accrued income                                           86


 Deductions from the aggregate value of assets                                  87


 Grand total of admissible assets after deduction of admissible assets
 in excess of market risk and counterparty limits (11 to 86 less 87)
                                                                                89                     12043532                   13156647




                                                                    10
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                                                                                                                                    Form 13
                                                                                                                                   (Sheet 3)
Analysis of admissible assets

Name of insurer                              ST ANDREW'S LIFE ASSURANCE PLC

Global business

Financial year ended                         31 December 2010

Category of assets                           Total long term insurance business assets
                                                     Company                  GL/                                           Category
                                                     registration             UK/   day month year          Units              of
                                                     number                   CM                                             assets

                                              R13          3104670             GL   31    12     2010        £000             10

                                                                                               As at end of this        As at end of the
                                                                                                financial year           previous year


                                                                                                        1                      2

Reconciliation to asset values determined in accordance
with the insurance accounts rules or international
accounting standards as applicable to the firm for the
purpose of its external financial reporting

 Total admissible assets after deduction of admissible assets
                                                                                    91                      12043532               13156647
 in excess of market risk and counterparty limits (as per line 89 above)

 Admissible assets in excess of market and counterparty limits                      92

 Inadmissible assets directly held                                                  93                         124815                227162

 Capital resources requirement deduction of regulated related
                                                                                    94
 undertakings

 Ineligible surplus capital and restricted assets in regulated related
                                                                                    95
 insurance undertakings

 Inadmissible assets of regulated related undertakings                              96

 Book value of related ancillary services undertakings                              97
 Other differences in the valuation of assets (other than for assets
                                                                                    98
 not valued above)

 Deferred acquisition costs excluded from line 89                                   99                         218064                274816

 Reinsurers' share of technical provisions excluded from line 89                    100                        136190                  98000

 Other asset adjustments (may be negative)                                          101                        176180                  41682

 Total assets determined in accordance with the insurance accounts
 rules or international accounting standards as applicable to the firm              102                     12698781               13798307
 for the purpose of its external financial reporting (91 to 101)



 Amounts included in line 89 attributable to debts due from related
 insurers, other than those under contracts of insurance or reinsurance
                                                                                    103




                                                                         11
22032011:14:11:08




                                                                                                                        Form 14
Long term insurance business liabilities and margins

Name of insurer                           ST ANDREW'S LIFE ASSURANCE PLC
Global business
Financial year ended                      31 December 2010
Total business/Sub fund                   LTBF Non Profit
Units                                     £000                                         As at end of            As at end of
                                                                                       this financial          the previous
                                                                                            year                   year
                                                                                             1                      2




 Mathematical reserves, after distribution of surplus                             11             11650171               12567905

 Cash bonuses which had not been paid to policyholders prior
                                                                                  12
 to end of the financial year
 Balance of surplus/(valuation deficit)                                           13               128041                 215717

 Long term insurance business fund carried forward (11 to 13)                     14             11778212               12783622

                                           Gross                                  15                99260                 109989

 Claims outstanding                        Reinsurers' share                      16
                                           Net (15-16)                            17                99260                 109989

                                           Taxation                               21
 Provisions
                                           Other risks and charges                22                                          2130

 Deposits received from reinsurers                                                23
                                           Direct insurance business              31                    1428               20904

 Creditors                                 Reinsurance accepted                   32
                                           Reinsurance ceded                      33                     464                   467

                                           Secured                                34
 Debenture loans
                                           Unsecured                              35
 Amounts owed to credit institutions                                              36
                                           Taxation                               37                56600                  31334
 Creditors
                                           Other                                  38               107568                 208201

 Accruals and deferred income                                                     39
 Provision for "reasonably foreseeable adverse variations"                        41
 Total other insurance and non-insurance liabilities (17 to 41)                   49               265320                 373025

 Excess of the value of net admissible assets                                     51
 Total liabilities and margins                                                    59             12043532               13156647



 Amounts included in line 59 attributable to liabilities to related companies,
                                                                                  61                60534                  60598
 other than those under contracts of insurance or reinsurance

 Amounts included in line 59 attributable to liabilities in respect of property
                                                                                  62             11574322               12504872
 linked benefits


 Total liabilities (11+12+49)                                                     71             11915491               12940930

 Increase to liabilities - DAC related                                            72
 Reinsurers' share of technical provisions                                        73               136190                  98000

 Other adjustments to liabilities (may be negative)                               74               245381                 231589

 Capital and reserves and fund for future appropriations                          75               401719                 527788

 Total liabilities under insurance accounts rules or international accounting
 standards as applicable to the firm for the purpose of its external financial    76             12698781               13798307
 reporting (71 to 75)




                                                                        12
22032011:14:11:08




                                                                                                                                Form 15

  Liabilities (other than long term insurance business)

  Name of insurer                            ST ANDREW'S LIFE ASSURANCE PLC
  Global business

  Financial year ended                       31 December 2010
                                                         Company                         GL/
                                                         registration                    UK/    day   month   year        Units
                                                         number                          CM

                                              R15                       3104670           GL    31    12      2010        £000
                                                                                                  As at end of         As at end of
                                                                                                 this financial        the previous
                                                                                                      year                 year
                                                                                                        1                   2

    Technical provisions (gross amount)

    Provisions for unearned premiums                                                       11
    Claims outstanding                                                                     12
    Provision for unexpired risks                                                          13
                                              Credit business                              14
    Equalisation provisions
                                              Other than credit business                   15
    Other technical provisions                                                             16
    Total gross technical provisions (11 to 16)                                            19

    Provisions and creditors

                                              Taxation                                     21
    Provisions
                                              Other risks and charges                      22
    Deposits received from reinsurers                                                      31
                                              Direct insurance business                    41
    Creditors                                 Reinsurance accepted                         42
                                              Reinsurance ceded                            43
    Debenture                                 Secured                                      44
    loans                                     Unsecured                                    45
    Amounts owed to credit institutions                                                    46
                                              Taxation                                     47
    Creditors                                 Foreseeable dividend                         48
                                              Other                                        49
    Accruals and deferred income                                                           51
    Total (19 to 51)                                                                       59
    Provision for "reasonably foreseeable adverse variations"                              61
    Cumulative preference share capital                                                    62
    Subordinated loan capital                                                              63
    Total (59 to 63)                                                                       69


    Amounts included in line 69 attributable to liabilities to related insurers, other
                                                                                           71
    than those under contracts of insurance or reinsurance


    Amounts deducted from technical provisions for discounting                             82
    Other adjustments (may be negative)                                                    83
    Capital and reserves                                                                   84                 479336              301279

    Total liabilities under insurance accounts rules or international accounting
    standards as applicable to the firm for the purpose of its external financial          85                 479336              301279
    reporting (69-82+83+84)




                                                                             13
22032011:14:11:08




                                                                                                               Form 16

Profit and loss account (non-technical account)

Name of insurer                         ST ANDREW'S LIFE ASSURANCE PLC

Global business

Financial year ended                    31 December 2010
                                                    Company               GL/
                                                    registration          UK/    day   month    year      Units
                                                    number                CM

                                         R16                 3104670       GL    31    12       2010     £000

                                                                                  This financial        Previous
                                                                                      year                year

                                                                                         1                 2


 Transfer (to)/from the                    From Form 20                     11
 general insurance business
 technical account                         Equalisation provisions          12

 Transfer from the long term insurance business
                                                                            13                 170000             50000
 revenue account

                                  Income                                    14                   862               4338

                                  Value re-adjustments on
 Investment income                                                          15                                    12114
                                  investments
                                  Gains on the realisation of
                                                                            16                 17333
                                  investments
                                  Investment management
                                  charges, including interest
                                                                            17                                      23

                                  Value re-adjustments on
 Investment charges
                                  investments
                                                                            18                  6966

                                  Loss on the realisation of
                                  investments
                                                                            19                                    10082

 Allocated investment return transferred to the general
 insurance business technical account
                                                                            20
 Other income and charges (particulars to be specified
 by way of supplementary note)
                                                                            21
 Profit or loss on ordinary activities before tax
 (11+12+13+14+15+16-17-18-19-20+21)
                                                                            29                 181229             56347

 Tax on profit or loss on ordinary activities                               31                  3173               757

 Profit or loss on ordinary activities after tax (29-31)                    39                 178056             55590
 Extraordinary profit or loss (particulars to be specified
 by way of supplementary note)
                                                                            41

 Tax on extraordinary profit or loss                                        42

 Other taxes not shown under the preceding items                            43

 Profit or loss for the financial year (39+41-(42+43))                      49                 178056             55590

 Dividends (paid or foreseeable)                                            51

 Profit or loss retained for the financial year (49-51)                     59                 178056             55590




                                                                     14
22032011:14:11:08




                                                                                                                                          Form 17

Analysis of derivative contracts

Name of insurer                       ST ANDREW'S LIFE ASSURANCE PLC

Global business

Financial year ended                  31 December 2010

Category of assets                    Total long term insurance business assets

                                                   Company        GL/                                                                  Category
                                                   registration   UK/                   day month      year           Units               of
                                                   number         CM                                                                    assets

                                      R17           3104670              GL             31     12    2010             £000               10

                                                                          Value as at the end                      Notional amount as at the end
                                                                          of this financial year                        of this financial year
  Derivative contracts

                                                                        Assets               Liabilities          Bought / Long      Sold / Short
                                                                          1                      2                     3                  4

                     Fixed-interest securities          11                         8                                                          1797
                     Interest rates                     12
                     Inflation                          13
                     Credit index / basket              14
  Futures and        Credit single name                 15
  contracts
                     Equity index                       16                         9                       82                                 6718
  for
  differences        Equity stock                       17
                     Land                               18
                     Currencies                         19
                     Mortality                          20
                     Other                              21
                     Swaptions                          31
                     Equity index calls                 32

  In the money       Equity stock calls                 33
  options            Equity index puts                  34
                     Equity stock puts                  35
                     Other                              36                     2100                                      723830
                     Swaptions                          41
                     Equity index calls                 42
  Out of the         Equity stock calls                 43
  money
  options            Equity index puts                  44                    68187                                                        476154
                     Equity stock puts                  45
                     Other                              46                                                             1121752
  Total (11 to 46)                                      51                    70304                        82          1845582             484669
  Adjustment for variation margin                       52                       (17)                 (110)
  Total (51 + 52)                                       53                    70287                        (28)


                            THE NOTIONAL AMOUNTS IN COLUMNS 3 AND 4 ARE NOT A MEASURE OF EXPOSURE.
                                    Please see instructions 11 and 12 to this Form for the meaning of these figures.




                                                                          15
22032011:14:11:08




                                                                                                             Form 40
 Long-term insurance business : Revenue account


 Name of insurer                       ST ANDREW'S LIFE ASSURANCE PLC
 Total business / subfund              LTBF Non Profit
 Financial year ended                  31 December 2010
 Units                                 £000


                                                                        Financial year            Previous year
                                                                              1                        2


   Income

   Earned premiums                                                 11                802153                  1951207

   Investment income receivable before deduction of tax            12                435728                   435791

   Increase (decrease) in the value of non-linked assets brought
                                                                   13                    (7714)                   10948
   into account

   Increase (decrease) in the value of linked assets               14                735292                  1150929

   Other income                                                    15                    4786                     3775

   Total income                                                    19               1970245                  3552650



   Expenditure

   Claims incurred                                                 21               2593199                  1357593

   Expenses payable                                                22                170720                   195404

   Interest payable before the deduction of tax                    23                    2049                     2618

   Taxation                                                        24                    39687                (24996)

   Other expenditure                                               25                                             2461

   Transfer to (from) non technical account                        26                170000                       50000

   Total expenditure                                               29               2975655                  1583080



   Business transfers - in                                         31

   Business transfers - out                                        32

   Increase (decrease) in fund in financial year (19-29+31-32)     39              (1005410)                 1969570

   Fund brought forward                                            49             12783622                  10814052

   Fund carried forward (39+49)                                    59             11778212                  12783622




                                                                   16
22032011:14:11:08




                                                                                                           Form 41
Long-term insurance business : Analysis of premiums


Name of insurer                    ST ANDREW'S LIFE ASSURANCE PLC
Total business / subfund           LTBF Non Profit
Financial year ended               31 December 2010
Units                              £000



                                                                                  Total Financial    Total Previous
                                       UK Life         UK Pension   Overseas
                                                                                       year               year

                                          1                2           3                4                  5


  Gross

  Regular premiums            11          183354                           152           183506             185485

  Single premiums             12          632469                           4971          637440            1774137




  Reinsurance - external

  Regular premiums            13              19709                                         19709              18149

  Single premiums             14               (461)                                         (461)              (297)




  Reinsurance - intra-group

  Regular premiums            15

  Single premiums             16               (455)                                         (455)             (9437)




  Net of reinsurance

  Regular premiums            17          163645                           152           163797             167336

  Single premiums             18          633385                           4971          638356            1783871




  Total

  Gross                       19          815823                           5123          820946            1959622

  Reinsurance                 20              18793                                         18793              8415

  Net                         21          797030                           5123          802153            1951207




                                                           17
22032011:14:11:08




                                                                                                                Form 42
Long-term insurance business : Analysis of claims


Name of insurer                        ST ANDREW'S LIFE ASSURANCE PLC
Total business / subfund               LTBF Non Profit
Financial year ended                   31 December 2010
Units                                  £000


                                                                                        Total Financial   Total Previous
                                              UK Life         UK Pension   Overseas
                                                                                             year              year

                                                1                 2           3               4                 5

 Gross
 Death or disability lump sums    11              252783                          986           253769           237406

 Disability periodic payments     12

 Surrender or partial surrender   13            2358338                                       2358338           1140168

 Annuity payments                 14                    141                                         141               164

 Lump sums on maturity            15                 6707                                          6707              3356

 Total                            16            2617969                           986         2618955           1381094


 Reinsurance - external
 Death or disability lump sums    21                11867                                         11867              9745

 Disability periodic payments     22

 Surrender or partial surrender   23

 Annuity payments                 24

 Lump sums on maturity            25

 Total                            26                11867                                         11867              9745


 Reinsurance - intra-group
 Death or disability lump sums    31                 1293                                          1293              2177

 Disability periodic payments     32

 Surrender or partial surrender   33                12596                                         12596             11579

 Annuity payments                 34

 Lump sums on maturity            35

 Total                            36                13889                                         13889             13756


 Net of reinsurance
 Death or disability lump sums    41              239623                          986           240609           225484

 Disability periodic payments     42

 Surrender or partial surrender   43            2345742                                       2345742           1128589

 Annuity payments                 44                    141                                         141               164

 Lump sums on maturity            45                 6707                                          6707              3356

 Total                            46            2592213                           986         2593199           1357593




                                                                 18
22032011:14:11:08




                                                                                                             Form 43
Long-term insurance business : Analysis of expenses


Name of insurer                    ST ANDREW'S LIFE ASSURANCE PLC
Total business / subfund           LTBF Non Profit
Financial year ended               31 December 2010
Units                              £000


                                                                                    Total Financial    Total Previous
                                          UK Life        UK Pension   Overseas
                                                                                         year               year

                                            1                2           3                4                  5

  Gross
  Commission - acquisition    11                39532                        3394             42926           106096

  Commission - other          12                32992                                         32992

  Management - acquisition    13                13898                         432             14330              24174

  Management - maintenance    14                79217                         769             79986              62409

  Management - other          15                                                                                  2178

  Total                       16              165639                         4595           170234            194857


  Reinsurance - external
  Commission - acquisition    21                 (137)                                         (137)              (186)

  Commission - other          22

  Management - acquisition    23

  Management - maintenance    24

  Management - other          25

  Total                       26                 (137)                                         (137)              (186)


  Reinsurance - intra-group
  Commission - acquisition    31

  Commission - other          32

  Management - acquisition    33

  Management - maintenance    34                 (349)                                         (349)              (361)

  Management - other          35

  Total                       36                 (349)                                         (349)              (361)


  Net of reinsurance
  Commission - acquisition    41                39669                        3394             43063           106282

  Commission - other          42                32992                                         32992

  Management - acquisition    43                13898                         432             14330              24174

  Management - maintenance    44                79566                         769             80335              62770

  Management - other          45                                                                                  2178

  Total                       46              166125                         4595           170720            195404




                                                             19
22032011:14:11:08




                                                                                                       Form 44
 Long-term insurance business : Linked funds balance sheet


 Name of insurer                         ST ANDREW'S LIFE ASSURANCE PLC
 Total business
 Financial year ended                    31 December 2010
 Units                                   £000


                                                                   Financial year           Previous year
                                                                         1                       2


  Internal linked funds (excluding cross investment)

  Directly held assets (excluding collective investment
                                                             11               3117383                  4154499
  schemes)

  Directly held assets in collective investment schemes of
                                                             12               7177407                  6471364
  connected companies

  Directly held assets in other collective investment
                                                             13               1443928                  1878079
  schemes

  Total assets (excluding cross investment) (11+12+
                                                             14              11738718                 12503942
  13)

  Provision for tax on unrealised capital gains              15                 (28103)                 (41890)

  Secured and unsecured loans                                16

  Other liabilities                                          17                 176174                      29963

  Total net assets (14-15-16-17)                             18              11590647                 12515869



  Directly held linked assets
  Value of directly held linked assets                       21



  Total

  Value of directly held linked assets and units held
                                                             31              11590647                 12515869
  (18+21)

  Surplus units                                              32                     16671                   11715

  Deficit units                                              33                       346                     718

  Net unit liability (31-32+33)                              34              11574322                 12504872




                                                              20
22032011:14:11:08




                                                                                                         Form 45
 Long-term insurance business : Revenue account for internal linked funds


 Name of insurer                          ST ANDREW'S LIFE ASSURANCE PLC
 Total business
 Financial year ended                     31 December 2010
 Units                                    £000


                                                                     Financial year           Previous year
                                                                           1                       2


   Income
   Value of total creation of units                          11                   688476                 1420184

   Investment income attributable to the funds before
                                                             12                   433035                  429619
   deduction of tax

   Increase (decrease) in the value of investments
                                                             13                   735292                 1150929
   in the financial year

   Other income                                              14                        388                    1501

   Total income                                              19                  1857191                 3002233



   Expenditure
   Value of total cancellation of units                      21                  2511388                  824818

   Charges for management                                    22                   160296                  156414

   Charges in respect of tax on investment income            23                       40165                   41028

   Taxation on realised capital gains                        24                       1848                     651

   Increase (decrease) in amount set aside for tax on
                                                             25                       24084               (41222)
   capital gains not yet realised

   Other expenditure                                         26                       44632                   43676

   Total expenditure                                         29                  2782413                 1025365



   Increase (decrease) in funds in financial year (19-29)    39                  (925222)                1976868

   Internal linked fund brought forward                      49                12515869                 10539001

   Internal linked funds carried forward (39+49)             59                11590647                 12515869




                                                             21
22032011:14:11:08




                                                                                                           Form 46
Long-term insurance business : Summary of new business


Name of insurer                    ST ANDREW'S LIFE ASSURANCE PLC
Total business
Financial year ended               31 December 2010
Units                              £000



                                                                                   Total Financial   Total Previous
                                       UK Life        UK Pension   Overseas
                                                                                        year              year

                                          1               2           3                  4                 5

  Number of new policyholders/
  scheme members for direct
  insurance business

  Regular premium business    11              87916                       1708               89624          137829

  Single premium business     12              27902                       1053               28955             72864

  Total                       13          115818                          2761            118579            210693



  Amount of new regular
  premiums

  Direct insurance business   21              22631                           96             22727             39475

  External reinsurance        22

  Intra-group reinsurance     23

  Total                       24              22631                           96             22727             39475



  Amount of new single
  premiums

  Direct insurance business   25          632469                          4971            637440           1771849

  External reinsurance        26

  Intra-group reinsurance     27

  Total                       28          632469                          4971            637440           1771849




                                                          22
22032011:14:11:08




                                                                                                                                                                         Form 47
                    Long-term insurance business : Analysis of new business


                    Name of insurer                                                          ST ANDREW'S LIFE ASSURANCE PLC
                    Total business
                    Financial year ended                                                     31 December 2010
                    Units                                                                    £000
                    UK Life / Direct Insurance Business


                                                                                                    Regular premium business                   Single premium business
                    Product
                     code                                     Product description                Number of                                  Number of
                    number                                                                     policyholders /      Amount of premiums    policyholders /   Amount of premiums
                                                                                              scheme members                             scheme members
                        1                                               2                             3                     4                    5                  6
                      300     Regular premium non-profit WL/EA OB                                        11919                   2682
  23




                      325     Level term assurance                                                       44730                   9280                3182                   407

                      330     Decreasing term assurance                                                  28677                   9911                2679                  9666

                      360     Income protection non-profit (guaranteed premiums)                          2582                    610                2571                  8127

                      700     Life property linked single premium                                                                                   19469                614269

                      720     Life property linked endowment regular premium - target cash                      7                 149
22032011:14:11:08




                                                                                                                                                            Form 47
                    Long-term insurance business : Analysis of new business


                    Name of insurer                                                ST ANDREW'S LIFE ASSURANCE PLC
                    Total business
                    Financial year ended                                           31 December 2010
                    Units                                                          £000
                    Overseas / Direct Insurance Business


                                                                                          Regular premium business                Single premium business
                    Product
                     code                                    Product description       Number of                               Number of
                    number                                                           policyholders /   Amount of premiums    policyholders /   Amount of premiums
                                                                                    scheme members                          scheme members
                        1                                               2                   3                  4                    5                  6
                      325     Level term assurance                                              1708                  96

                      330                                                                                                               1054                  4971
  24




                              Decreasing term assurance

                      360     Income protection non-profit (guaranteed premiums)
22032011:14:11:08




                                                                                                                        Form 48
Long-term insurance business : Assets not held to match linked liabilities


Name of insurer                       ST ANDREW'S LIFE ASSURANCE PLC
Category of assets                    10 Total long term insurance business assets
Financial year ended                  31 December 2010
Units                                 £000



                                                                                      Expected
                                                                                                                     Return on
                                                       Unadjusted     Economic      income from    Yield before
                                                                                                                      assets in
                                                         assets       exposure        assets in    adjustment
                                                                                                                   financial year
                                                                                      column 2

                                                           1             2              3               4                5

 Assets backing non-profit liabilities
 and non-profit capital requirements

 Land and buildings                               11

 Approved fixed interest securities               12           1007      181700             1589            0.87

 Other fixed interest securities                  13                         7577             61            0.81

 Variable interest securities                     14                      15741              105            0.67

 UK listed equity shares                          15

 Non-UK listed equity shares                      16

 Unlisted equity shares                           17

 Other assets                                     18       468203        264192             1759            0.67

 Total                                            19       469210        469210             3514            0.75

 Assets backing with-profits liabilities
 and with-profits capital requirements

 Land and buildings                               21

 Approved fixed interest securities               22

 Other fixed interest securities                  23

 Variable interest securities                     24

 UK listed equity shares                          25

 Non-UK listed equity shares                      26

 Unlisted equity shares                           27

 Other assets                                     28

 Total                                            29



 Overall return on with-profits assets
 Post investment costs but pre-tax                31

 Return allocated to non taxable 'asset shares'   32

 Return allocated to taxable 'asset shares'       33




                                                                 25
22032011:14:11:08




                                                                                                            Form 50
Long-term insurance business : Summary of mathematical reserves


Name of insurer                    ST ANDREW'S LIFE ASSURANCE PLC
Total business / subfund           LTBF Non Profit
Financial year ended               31 December 2010
Units                              £000

                                                                                    Total Financial   Total Previous
                                          UK Life       UK Pension   Overseas
                                                                                         year              year

                                            1               2           3                 4                 5


  Gross
  Form 51 - with-profits      11
  Form 51 - non-profit        12                69764                       569               70333             37677
  Form 52                     13
  Form 53 - linked            14           11670242                                      11670242          12601642
  Form 53 - non-linked        15                45786                                         45786             26626
  Form 54 - linked            16
  Form 54 - non-linked        17
  Total                       18           11785792                         569          11786361          12665945


  Reinsurance - external
  Form 51 - with-profits      21
  Form 51 - non-profit        22                40268                           2             40270              1270
  Form 52                     23
  Form 53 - linked            24
  Form 53 - non-linked        25
  Form 54 - linked            26
  Form 54 - non-linked        27
  Total                       28                40268                           2             40270              1270


  Reinsurance - intra-group
  Form 51 - with-profits      31
  Form 51 - non-profit        32
  Form 52                     33
  Form 53 - linked            34                95920                                         95920             96770
  Form 53 - non-linked        35
  Form 54 - linked            36
  Form 54 - non-linked        37
  Total                       38                95920                                         95920             96770


  Net of reinsurance
  Form 51 - with-profits      41
  Form 51 - non-profit        42                29496                       567               30063             36407
  Form 52                     43
  Form 53 - linked            44           11574322                                      11574322          12504872
  Form 53 - non-linked        45                45786                                         45786             26626
  Form 54 - linked            46
  Form 54 - non-linked        47
  Total                       48           11649604                         567          11650171          12567905




                                                            26
22032011:14:11:08




                                                                                                                                                                                            Form 51
                    Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts)


                    Name of insurer                                                ST ANDREW'S LIFE ASSURANCE PLC
                    Total business / subfund                                       LTBF Non Profit
                    Financial year ended                                           31 December 2010
                    Units                                                          £000
                    UK Life / Gross


                                                                                     Number of
                    Product                                                                                        Amount of                                                             Amount of
                                                                                   policyholders /   Amount of                     Nominal value    Discounted
                     code                            Product description                                          annual office                                     Other liabilities   mathematical
                                                                                       scheme         benefit                        of units      value of units
                    number                                                                                         premiums                                                               reserves
                                                                                     members
                       1                                      2                           3             4              5                6                7                 8                 9
                      300     Regular premium non-profit WL/EA OB                          48465         166546             9460                                                                 13080
  27




                      325     Level term assurance                                        800294       16454708            78067                                                                 19064

                      330     Decreasing term assurance                                   279728       11523140            63988                                                                 15195

                      360     Income protection non-profit (guaranteed premiums)          111725         811078             1655                                                                  4340

                      395     Annuity non-profit (PLA)                                        54            150                                                                                   1310

                      440     Additional reserves non-profit OB                                                                                                                                  16775
22032011:14:11:08




                                                                                                                                                                                              Form 51
                    Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts)


                    Name of insurer                                                ST ANDREW'S LIFE ASSURANCE PLC
                    Total business / subfund                                       LTBF Non Profit
                    Financial year ended                                           31 December 2010
                    Units                                                          £000
                    UK Life / Reinsurance ceded external


                                                                                     Number of
                    Product                                                                                          Amount of                                                             Amount of
                                                                                   policyholders /   Amount of                       Nominal value    Discounted
                     code                            Product description                                            annual office                                     Other liabilities   mathematical
                                                                                       scheme         benefit                          of units      value of units
                    number                                                                                           premiums                                                               reserves
                                                                                     members
                       1                                     2                            3             4                5                6                7                 8                 9
                      300     Regular premium non-profit WL/EA OB                                           63030             2771                                                                  9362
  28




                      325     Level term assurance                                                      8379959              10753                                                                 18350

                      330     Decreasing term assurance                                                 6920163               5659                                                                 12421

                      360     Income protection non-profit (guaranteed premiums)                            27138              397                                                                   135
22032011:14:11:08




                                                                                                                                                                                             Form 51
                    Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts)


                    Name of insurer                                                ST ANDREW'S LIFE ASSURANCE PLC
                    Total business / subfund                                       LTBF Non Profit
                    Financial year ended                                           31 December 2010
                    Units                                                          £000
                    Overseas (Irish Republic) / Gross


                                                                                     Number of
                    Product                                                                                          Amount of                                                            Amount of
                                                                                   policyholders /   Amount of                      Nominal value    Discounted
                     code                            Product description                                            annual office                                    Other liabilities   mathematical
                                                                                       scheme         benefit                         of units      value of units
                    number                                                                                           premiums                                                              reserves
                                                                                     members
                       1                                      2                           3             4                5               6                7                 8                 9
                      325     Level term assurance                                         77515         174102              783                                                                   65

                      330     Decreasing term assurance                                       4996          60099                                                                                 111
  29




                      360     Income protection non-profit (guaranteed premiums)              3498            901                                                                                 130

                      440     Additional reserves non-profit OB                                                                                                                                   262
22032011:14:11:08




                                                                                                                                                                                     Form 51
                    Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts)


                    Name of insurer                                          ST ANDREW'S LIFE ASSURANCE PLC
                    Total business / subfund                                 LTBF Non Profit
                    Financial year ended                                     31 December 2010
                    Units                                                    £000
                    Overseas (Irish Republic) / Reinsurance ceded external


                                                                               Number of
                    Product                                                                                 Amount of                                                             Amount of
                                                                             policyholders /   Amount of                    Nominal value    Discounted
                     code                        Product description                                       annual office                                     Other liabilities   mathematical
                                                                                 scheme         benefit                       of units      value of units
                    number                                                                                  premiums                                                               reserves
                                                                               members
                       1                                  2                         3             4             5                6                7                 8                 9
                      330     Decreasing term assurance                                                             33832                                                                   2
  30
22032011:14:11:08




                                                                                                                                                                                                     Form 53
                    Long-term insurance business : Valuation summary of property linked contracts


                    Name of insurer                                                          ST ANDREW'S LIFE ASSURANCE PLC
                    Total business / subfund                                                 LTBF Non Profit
                    Financial year ended                                                     31 December 2010
                    Units                                                                    £000
                    UK Life / Gross


                                                                                               Number of
                    Product                                                                                                  Amount of                                                            Amount of
                                                                                             policyholders /   Amount of                    Nominal value    Discounted
                     code                           Product description                                                     annual office                                    Other liabilities   mathematical
                                                                                                 scheme         benefit                       of units      value of units
                    number                                                                                                   premiums                                                              reserves
                                                                                               members
                       1                                       2                                    3             4              5               6                7                 8                 9
                      700     Life property linked single premium                                   305702        9535002                       11546757        11526075                43678       11569754
  31




                      710     Life property linked whole life regular premium                           3873       196461            1679            5775             5775                 24             5799

                      715     Life property linked endowment regular premium - savings                    16          195               8             203              203                  0              204

                      720     Life property linked endowment regular premium - target cash           13386         434268            6300         132812          132812                  477         133289

                      795     Miscellaneous property linked                                             3337       126061            1143            5377             5377               1606             6983
22032011:14:11:08




                                                                                                                                                                                                      Form 53
                    Long-term insurance business : Valuation summary of property linked contracts


                    Name of insurer                                                          ST ANDREW'S LIFE ASSURANCE PLC
                    Total business / subfund                                                 LTBF Non Profit
                    Financial year ended                                                     31 December 2010
                    Units                                                                    £000
                    UK Life / Reinsurance ceded intra-group


                                                                                               Number of
                    Product                                                                                                 Amount of                                                              Amount of
                                                                                             policyholders /   Amount of                   Nominal value     Discounted
                     code                          Product description                                                     annual office                                      Other liabilities   mathematical
                                                                                                 scheme         benefit                      of units       value of units
                    number                                                                                                  premiums                                                                reserves
                                                                                               members
                       1                                      2                                     3             4             5               6                 7                  8                 9
                      700     Life property linked single premium                                                                                   95680             95680                                95680

                      720     Life property linked endowment regular premium - target cash                                                            240               240                                  240
  32
22032011:14:11:08




                                                                                                                                                                                         Form 55
                    Long-term insurance business : Unit prices for internal linked funds                                                                                                (Sheet 1)


                    Name of insurer                      ST ANDREW'S LIFE ASSURANCE PLC
                    Total business
                    Financial year ended                 31 December 2010
                    Units                                £000


                                                                                                                                         Unit           Price at       Price at       Change in
                                        Fund name                          Type of fund           Net assets            Main series   management        previous       current       price during
                                                                                                                                        charge       valuation date valuation date       year
                                              1                                   2                   3                      4            5                6              7               8

                     All Share Tracker Life SP Fund       01 - life - stock market managed fund           901559 Series 2                     1.40        123.9995       142.3212             14.78

                     Cautious Growth Life                 03 - life - defensive managed fund              172849 Series 2                     1.35                       104.4000

                     Cautious Managed Life                03 - life - defensive managed fund           2244590 Series 2                       1.40        115.4071       125.3949              8.65

                     Gilt and Fixed Interest Life         04 - life - other managed fund               1231235 Series 2                       1.40        122.9021       127.4927              3.74
  33




                     Guar Inv Plan December 08 Life       04 - life - other managed fund                  284824 Series 2                     1.75        547.0989       575.6314              5.22

                     Guar Inv Plan June 09 Life           04 - life - other managed fund                  310148 Series 2                     1.75        520.8378       549.5633              5.52

                     Guar Inv Plan March 09 Life          04 - life - other managed fund                  242533 Series 2                     1.75        527.5073       557.2003              5.63

                     Guar Inv Plan September 09 Life      04 - life - other managed fund                  318222 Series 2                     1.75        512.2811       537.7920              4.98

                     Halifax Balanced Investment          02 - life - balanced managed fund               150480 Series 10                    1.25        126.3423       137.6808              8.97

                     High Income Life SP Fund             05 - life - UK equity                           795328 Series 2                     1.40        139.5989       156.6802             12.24

                     Index Linked Gilt Fund               04 - life - other managed fund                  321288 Series 2                     1.40        141.7261       150.5009              6.19

                     International Growth Life SP Fund    06 - life - overseas equity                     504639 Series2                      1.40        118.2383       130.0669             10.00

                     Life Balanced                        02 - life - balanced managed fund               213030 Series 1                     0.75         48.5100        54.2500             11.83

                     Life Foundation                      02 - life - balanced managed fund               202747 Series 1                     0.75         53.0000        58.5200             10.42

                     Life Opportunity                     01 - life - stock market managed fund           195007 Series 1                     0.75         52.3900        58.8800             12.39

                     Managed Income Fund                  04 - life - other managed fund               1083141 Series 10                      1.25        452.4537       474.3700              4.84

                     Money Life SP fund                   04 - life - other managed fund                  226214 Series 2                     1.40        116.4855       115.4784             (0.86)

                     Pelican Life SP Fund                 05 - life - UK equity                        1142492 Series 2                       1.40        125.1250       141.2791             12.91
22032011:14:11:08




                                                                                                           Form 58
 Long-term insurance business : Distribution of surplus


 Name of insurer                            ST ANDREW'S LIFE ASSURANCE PLC
 Total business / subfund                   LTBF Non Profit
 Financial year ended                       31 December 2010
 Units                                      £000


                                                                       Financial year           Previous year
                                                                             1                       2

  Valuation result
  Fund carried forward                                            11              11778212                12783622

  Bonus payments in anticipation of a surplus                     12

  Transfer to non-technical account                               13                170000                      50000

  Transfer to other funds / parts of funds                        14

  Subtotal (11 to 14)                                             15              11948212                12833622

  Mathematical reserves                                           21              11650171                12567905

  Surplus including contingency and other reserves held towards
                                                                  29                298041                  265717
  the capital requirements (deficiency) (15-21)


  Composition of surplus
  Balance brought forward                                         31                215717                  182362

  Transfer from non-technical account                             32

  Transfer from other funds / parts of fund                       33

  Surplus arising since the last valuation                        34                    82324                   83355

  Total                                                           39                298041                  265717


  Distribution of surplus
  Bonus paid in anticipation of a surplus                         41

  Cash bonuses                                                    42

  Reversionary bonuses                                            43

  Other bonuses                                                   44

  Premium reductions                                              45

  Total allocated to policyholders (41 to 45)                     46

  Net transfer out of fund / part of fund                         47                170000                      50000

  Total distributed surplus (46+47)                               48                170000                      50000

  Surplus carried forward                                         49                128041                  215717

  Total (48+49)                                                   59                298041                  265717


  Percentage of distributed surplus allocated to policyholders
  Current year                                                    61

  Current year - 1                                                62

  Current year - 2                                                63

  Current year - 3                                                64




                                                                  34
22032011:14:11:08




                                                                                                                          Form 60
Long-term insurance capital requirement
Name of insurer                       ST ANDREW'S LIFE ASSURANCE PLC
Global business
Financial year ended                  31 December 2010
Units                                 £000
                                      LTICR        Gross                  Net           Reinsurance     LTICR            LTICR
                                      factor     reserves /            reserves /          factor      Financial        Previous
                                                 capital at            capital at                        year             year
                                                    risk                  risk
                                        1            2                     3                4             5                6

 Insurance death risk capital component
 Life protection reinsurance     11    0.0%

 Classes I (other), II and IX    12    0.1%          1108471               1099191                               554             1356

 Classes I (other), II and IX    13    0.15%             120655                118468           0.50               90             288

 Classes I (other), II and IX    14    0.3%         27952868              12580872                            41929             78263

 Classes III, VII and VIII       15    0.3%              632470                632710           1.00            1898             3322

 Total                           16                 29814464              14431241                            44471             83229

 Insurance health risk and life protection reinsurance capital component
 Class IV supplementary
 classes 1 and 2 and life        21                                                                             1106              393
 protection reinsurance

 Insurance expense risk capital component
 Life protection and permanent
                                 31     0%
 health reinsurance
 Classes I (other), II and IX    32     1%                68289                 28153           0.85             580              311
 Classes III, VII and VIII
                                 33     1%           2164154               2164154              1.00           21642            33916
 (investment risk)
 Classes III, VII and VIII
                                 34     1%
 (expenses fixed 5 yrs +)
 Classes III, VII and VIII
                                 35    25%                                                                      3095             2234
 (other)
 Class IV (other)                36     1%                 2043                  1908           0.93               19              39

 Class V                         37     1%

 Class VI                        38     1%

 Total                           39                                                                            25336            36500

 Insurance market risk capital component
 Life protection and permanent
                                 41     0%
 health reinsurance
 Classes I (other), II and IX    42     3%                68289                 28153           0.85            1741              932
 Classes III, VII and VIII
                                 43     3%           2164154               2164154              1.00           64925           101748
 (investment risk)
 Classes III, VII and VIII
                                 44     0%
 (expenses fixed 5 yrs +)
 Classes III, VII and VIII
                                 45     0%           9551876               9455956
 (other)
 Class IV (other)                46     3%                 2043                  1908           0.93               57             117

 Class V                         47     0%

 Class VI                        48     3%

 Total                           49                 11786362              11650171                            66723            102797


 Long term insurance capital
                                 51                                                                           137636           222919
 requirement




                                                                  35
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

NOTES TO THE FORMS

*0201* Waiver and modification rules

        The FSA, on the application of St Andrew's Life Assurance plc, made a Direction under Section 148
        of the Financial Services and Markets Act 2000 on 4 May 2007. The effect of the direction is to
        modify GENPRU 2 Annex 7R and INSPRU 2.1.33R so as to permit the firm to value debts arising
        from amounts advanced as commission to approved credit institutions and wholly owned
        subsidiaries of approved credit institutions in respect of certain long term insurance policies sold on
        or before 3 May 2012, and to take such debts fully into account.

        The FSA, on the application of the firm, made a direction under section 148 of the Financial
        Services and Markets Act 2000 in December 2010. The effect of the direction is to modify the
        provisions of INSPRU 3.1.35R and IPRU(INS) Appendix 9.3 so that a more appropriate rate of
        interest is used for assets taken in combination.


*0301* Form 3 reconciliation of net admissible assets to total capital resources after deductions

                                                                                                       £’000
         Total of admissible assets - other than long term business assets                           479,336
         Form 13 Line 89
         Total of admissible assets - long term business assets                                12,043,532
         Form 13 Line 89

         Less:
         Mathematical reserves, after distribution of surplus                                 (11,650,171)
         Form 14 Line 11
         Total other insurance and non-insurance liabilities                                        (265,320)
         Form 14 Line 49
         Total liabilities - other than long term insurance business                                    -
         Form 15 Line 69

         Net admissible assets / total capital resources after deductions                           607,377
         Form 3 Line 79



*0310* Details of positive and negative valuation differences

        There are no positive and negative valuations differences




                                                      36
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

NOTES TO THE FORMS (Continued)

*0313* Reconciliation of profit and loss and other reserves to Form 16

                                                                                                 £’000
                                                             st
         Profit and Loss Account and other reserves as at 31 December 2009                    469,067
         Form 3 Line 12 Column 4
         Profit and Loss Account and other reserves as at 31st December 2010                  521,054
         Form 3 Line 12 Column 3

         Movement in Profit and Loss Account and Other Reserves                                 51,987

         Reporting basis difference                                                             38,393

         Add Long Term Business Fund loss/ (profit) retained for the financial year             87,676

         Profit retained for the financial year - Form 16 Line 59                             178,056



*1100* Form has been omitted on account of de minimis limits as per IPRU(INS)Rule 9.11.


*1200* Form has been omitted on account of de minimis limits as per IPRU(INS)Rule 9.11.


*1301* & *1308* Aggregate value of certain securities

        The company held no investments meeting the specified criteria.

*1304* & *1310* Set off of amounts

        Amounts have been set off to the extent permitted by generally accepted accounting principles.




                                                     37
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

NOTES TO THE FORMS (Continued)

*1305* & *1319* Maximum Counterparty Limit

The Company’s investment guidelines set maximum counterparty limits in order to maintain the admissibility
of assets in accordance with INSPRU 2.1.22. Shareholder and Non-profit funds have mandates which are
reviewed annually.

The maximum approved counterparty limits for the SWIP Defensive Gilt fund (0-5 year Gilts) and SWIP GLF
(stable NAV cash fund) are £1bn and £6bn respectively across the Lloyds Banking Group Insurance
Division as a whole. The table below considers the remaining Shareholder and Non Profit fund limits for
approved and unapproved counterparties.

 Credit rating of bond         Maximum percentage of Fund               Maximum absolute amount

 AAA Sovereigns/AAA            10%                                      £200m

 Supranationals/AAA

 Government Agencies

 AAA                           5%                                       £60m

 AA                            3%                                       £50m

 A                             2%                                       £40m

 BBB or below                  0%                                       £0m



There were no breaches of counterparty limits during the year.

*1306* & *1312* Amount and nature of exposure at the year end to large counterparties

        At 31st December 2010 there were two exposures to a counterparty greater than 5% of the base
        capital resources requirement and long term insurance business liabilities, excluding property linked
        liabilities and net of reinsurance ceded.


        Counterparty                    Nature of assets                                         £000

        Lloyds Banking Group plc        Direct insurance business                               31,559
                                        intermediary debtors
                                        Bank accounts                                            5,675
        Northern Trust                  Custodian bank accounts                                 34,797




                                                     38
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

NOTES TO THE FORMS (Continued)

*1318* Details of other adjustments to assets

                                                                                                     £000
         Reclassification of unit linked liabilities included in Net Asset Value of unit           176,174
         linked funds on Form 13 Line 59
         Other asset adjustments                                                                        6
         Other adjustments to assets – Form 13 Line 101                                           176,180

*1401* Provision for adverse changes

        No provision for adverse changes under either GENPRU 1.3.30R to GENPRU 1.3.33R or INSPRU
        3.2.17R and INSPRU 3.2.18R has been made.

        The Company considers asset valuations in the context of the requirements of GENPRU 1.3.30R to
        GENPRU 1.3.33R. The need for a provision for adverse variation is also considered by the
        Actuarial Function Holder. The Company's mark to model valuations are formally reviewed and
        signed off to provide additional comfort over robustness. The Company reviews any potential
        liquidity issues on assets on a regular basis and incorporates valuation adjustments if required.

        The Company reviews its investments to identify whether any provisions are required pursuant to
        INSPRU 3.2.17R and INSPRU 3.2.18R. Sufficient cover is held for all positions to match reasonably
        foreseeable adverse variations and no non-approved derivatives or quasi-derivatives are held.

*1402* Details of contingencies and commitments:

        a)       Charges over assets
                 There are no charges over assets.

        b)       Potential capital gains tax liability
                 There is no potential capital gains tax liability should the Company dispose of its assets,
                 based on asset values as at 31st December 2010.

        c)       Contingent liabilities
                 There are no contingent liabilities.

        d)       Guarantees, indemnities or other contractual commitments affected other than in the
                 ordinary course of insurance business and in respect of related companies.
                 There are no such items.

        e)       Other fundamental uncertainties
                 There are no other uncertainties which it is necessary to disclose.

*1405* Details of other adjustments to liabilities

                                                                                                      £’000
          Reclassification of unit linked liabilities included in Net Asset Value of unit           176,174
          linked funds on Form 13 Line 59
          Deferred Tax                                                                               69,100
          Differences between IFRS and FSA mathematical reserves                                          -
          Other adjustments                                                                             107
          Other adjustments to liabilities - Form 14 Line 74                                        245,381




                                                         39
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

NOTES TO THE FORMS (Continued)

*1501* Provision for adverse changes

        No provision for adverse changes under either GENPRU 1.3.30R to GENPRU 1.3.33R or INSPRU
        3.2.17R and INSPRU 3.2.18R has been made.

        The Company considers asset valuations in the context of the requirements of GENPRU 1.3.30R to
        GENPRU 1.3.33R. The need for a provision for adverse variation is also considered by the
        Actuarial Function Holder. The Company reviews any potential liquidity issues on assets on a
        regular basis and incorporates valuation adjustments if required.

        No derivatives are held outside of the long-term business fund.

*1502* Details of contingencies and commitments:

        a)      Charges over assets
                There are no charges over assets.

        b)      Potential capital gains tax liability
                There is no potential capital gains tax liability should the Company dispose of its assets,
                                                   st
                based on asset values as at 31 December 2010.

        c)      Contingent liabilities
                There are no contingent liabilities.

        d)      Guarantees, indemnities or other contractual commitments effected other than in the
                ordinary course of insurance business and in respect of related companies.
                There are no such items.

        e)      Other fundamental uncertainties
                There are no other uncertainties which it is necessary to disclose.


*1601* Basis of conversion of foreign currency

        Rates of exchange prevailing at the time of the transaction have been used to convert amounts of
        income and expenditure in foreign currencies. Assets and liabilities denominated in foreign
        currencies are expressed in sterling at exchange rates ruling at 31 December 2010.

*1701* Variation margins in the Long Term Business Fund
        The aggregate amount of variation margin which has been received is £28k.


*4002* Details of other income

                                                                                                £'000
        Stock Lending Income                                                                      288
        Management fees receivable                                                              1,393
        Underwriting Commission                                                                    43
        Renewal Commission                                                                        543
        Release of provision                                                                    2,071
        Other Income                                                                              448
        Other income – Form 40 Line 15                                                          4,786




                                                       40
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

NOTES TO THE FORMS (Continued)

*4005* Basis of conversion of foreign currency

        Rates of exchange prevailing at the time of the transaction have been used to convert amounts of
        income and expenditure in foreign currencies. Assets and liabilities denominated in foreign
        currencies are expressed in sterling at exchange rates ruling at 31 December 2010.

*4008* Provision of management services and name of the party providing such services:

        Scottish Widows Investment Partnership Limited, a subsidiary of Lloyds Banking Group plc, and
        Insight Investment Funds Management Limited provided investment management services to the
        Company during the year.

        Invista Real Estate Investment Management Limited, a subsidiary of HBOS Insurance & Investment
        Group Limited provides investment management services in respect of property investments.

        There are four providers of administration services to the Company in the period:

        Aviva plc provided certain administration services to the Company.

        St Andrews Group plc, a wholly owned subsidiary of HBOS plc, provided management services
        under a management agreement in respect of the creditor insurance business.

        Vertex provide administration services in respect of the Third Party Agreement on the life business
        in respect of whole of life policies, term assurance policies, capital investment bond and secure life
        plan, which are currently in run off.

        Opal provide administration services in respect of the Third Party Agreement on the life business in
        respect of whole of life policies.

*4009* Material Connected Party Transactions

        The intercompany transactions which exceeded 5% of the insurer's liabilities arising from the long
        term business amount, excluding property linked and reinsurance are as follows:

        Name of connected person         Relationship with       Amount      Description of transaction
                                         connected person           £m
        HBOS plc                         Fellow group               260      Insurance business
                                         undertaking                         transactions
        HIFM Cautious Managed            Fellow group                   83   Net investment in OEIC
        Institutional Class 1 Acc        undertaking                         subsidiary during year
        HIFM UK Gilt institutional       Fellow group                   39   Net investment in OEIC
        income shares                    undertaking                         subsidiary during year
        Halifax Life Ltd                 Parent undertaking             34   Reassurance business
                                                                             transactions
        Halifax brokerage Ireland Ltd    Fellow group                   31   Insurance business
                                         undertaking                         transactions
        Halifax reinsurance Ltd          Fellow group                   22   Reassurance business
                                         undertaking                         transactions
        HBOS Financial Services Ltd      Fellow group                 (43)   Expense recharge
                                         undertaking                         transactions
        Lloyds Bank plc                  Ultimate parent             (103)   Insurance business
                                         undertaking                         transactions
        Bank of Scotland plc             Fellow group                (211)   Insurance business
                                         undertaking                         transactions

        No amounts were written off in the period in respect of debts due to or from connected parties.



                                                     41
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

NOTES TO THE FORMS (Continued)

*4401* Basis of linked asset valuation

        Linked assets are valued using the FSA Handbook Rules in GENPRU 1.3.

        Financial assets and instruments used to cover linked liabilities are stated at market value. Stock
        exchange securities and investments in collective investment schemes have been valued at bid
        prices.

        Investment property is shown at open market value as determined by independent valuation.
        Investment property valuations are carried out by persons who are members of the Royal Institute
        of Chartered Surveyors and were conducted in accordance with the "RICS Statement of Asset
        Valuation and Guidance Notes".

        Other assets have been valued using appropriate international financial reporting standards
        applicable to the firm for the purpose of its external financial reporting.

        The Rules in GENPRU 1.3.30 to GENPRU 1.3.33 may require management to make adjustments
        to these valuations.

*4402* Aggregate value of rights under derivative contracts

        The value of rights and liabilities under derivatives contracts in the linked funds are:


                                                                  £'000            £'000             £'000
                                                                                 Variation              Net
                                                                   Gross
                                                                                  margin
        Derivative rights                                       160,818                 16         160,834
        Derivative liabilities                                  (24,739)            9,037          (15,702)
        Net                                                     136,079             9,053          145,132

*4502* Details of items reported as "other income" or "other expenditure"

        Other income                                                                                 £000

        Underwriting Commission                                                                       100
        Stock Lending Income                                                                          288
        Other income – Form 45 Line 14                                                                388

        Other expenditure                                                                            £000

        Income distribution                                                                        44,632
        Other expenditure – Form 45 Line 26                                                        44,632


*4802* No payment of interest is assumed in the event of assets in default.


*4803* Where fixed and variable interest securities can be redeemed over a period at the option of the
       guarantor or issuer, the latest possible redemption date has been assumed


*4900* Form has been omitted on account of de minimis limits as per IPRU(INS) Rule 9.11.




                                                      42
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

NOTES TO THE FORMS (Continued)

*5103* Product code 440 covers an endowment provision, waiver of premium reserve, additional claims
       reserve, profit commission reserve and a reserve for future renewal commission payments.


*5303* The Critical Illness Plan is shown on Form 53 under product code 795.


*5700* Form has been omitted on account of de minimis limits as per IPRU(INS) Rule 9.11.


*6001* Gross annual office premiums for long-term insurance business class IV are £6.8m. The capital
       component has been estimated by taking 18% of gross annual office premiums and multiplying by
       the reinsurance ratio.




                                                  43
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

ADDITIONAL INFORMATION REQUIRED BY RULE 9.29 OF THE ACCOUNTS AND STATEMENTS
RULES

(a) The use of derivatives within each fund is set out in fund management mandates which are in line with
    company policy as set out by the Board. A summary of the uses to which they are put is as follows:

All derivatives that are held should satisfy the principles of efficient portfolio management (EPM):
              • The transactions must be economically appropriate;
              • The exposure must be fully covered; and
              • The transactions must be entered into for one or of
                         i.      the reduction of risk;
                         ii.     the reduction of cost;
                         iii.    the generation of additional capital or income for the fund with an acceptably
                                 low level of risk; and
                         iv.     obtaining exposure to the performance of HBOS plc shares through
                                 Contracts for Differences where a direct holding of the shares is not
                                 permitted

Unless they are exchange traded, derivatives may only be executed within the limits of credit exposure with
counterparties as approved by the Board of HBOS Financial Services from time to time. Where appropriate
a change of control clause should be included in the agreement.

Over the counter (OTC) contracts should meet the requirements of the International Swaps and Derivatives
Association (ISDA).

All derivative positions comply with the requirements of INSPRU 3.2.5, which includes the requirement for
the positions to be covered with appropriate margining and collateralisation arrangements being applied.

They should not create, or potentially create, an open ended liability (net of coverage from the underlying
asset).

From time to time bespoke derivative arrangements are put in place to mitigate against specific risks – in
these cases the terms of instruction will specify limitations consistent with the fund mandates. The primary
objectives of these policies are to minimise any unintended risks.

Any proposed use of derivatives which falls outwith the limits of the relevant fund management mandate
must be authorised by either the relevant committee or the full HBOS FS Board.

Compliance with fund managements is reviewed regularly with breaches reported on a monthly basis. Data
relating to derivative positions is also provided on a regular basis to enable Life Company oversight of the
actions of the fund manager.

(b) The use of contracts which, at the time the contract is entered into, are not reasonably likely to be
    exercised is restricted to those instruments used for the protection of free assets.

(c) During the financial year, the Company did not enter into any contracts described in (b) above.

(h) At no time during the year did the Company enter into a derivative or quasi-derivative contract which
    required a significant provision to be made for it under INSPRU 3.2.17R or did not fall within the
    definition of a permitted derivative contract

(i) No consideration was received by the insurer during the financial year in return for granting rights under
     derivative or quasi-derivative contracts.




                                                      44
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

STATEMENT OF INFORMATION ON SHAREHOLDER CONTROLLER AS REQUIRED BY RULE 9.30
OF THE INTERIM PRUDENTIAL SOURCEBOOK FOR INSURERS.

The immediate shareholder controller of the Company during the financial year was Clerical Medical
Investment Group Limited. Halifax Life Limited is a wholly owned and controlled subsidiary of Clerical
Medical Investment Group Limited.

Clerical Medical Investment Group Limited is a wholly owned and controlled subsidiary of HBOS Financial
Services Limited.

HBOS Financial Services Limited is a wholly owned and controlled subsidiary of HBOS Insurance &
Investment Group Limited.

HBOS Insurance & Investment Group Limited is a wholly owned and controlled subsidiary of HBOS plc.

HBOS plc is a wholly owned and controlled subsidiary of Lloyds Banking Group plc.

Clerical Medical Investment Group Limited holds all the issued shares of the company and is thereby
entitled to exercise all the associated voting powers at any general meeting of the Company.




                                                   45
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

APPENDIX 9.4 FOR THE PERIOD ENDING 31 DECEMBER 2010

ABSTRACT OF VALUATION REPORT

1.    Introduction

(1)   The valuation date is 31 December 2010.

(2)   The previous valuation date was 31 December 2009.

(3)   Not applicable.


2.    Product range

      New products

      No new products were introduced during 2010.

      Changes to existing products

      Linked policies
                                      nd
      Personal Investment Plan – 2         series

      For policies starting on or after 25th January 2010, the benefit payable on death will
      depend on whether the death was caused by an accident:

              Where death is not as a result of an accident, we will pay the value of the
              plan at the next valuation following death (plus any loyalty bonus due on
              growth plans only)
              If death is the direct result of an accident, we will increase the death benefit.
              We pay 110% of the value of the plan (plus any loyalty bonus due on growth
              plans only).

      For policies starting on or after 29th June 2010, the following changes were made:

      (i) A charge will be incurred if the policyholder's regular withdrawals exceed 7.5%, or
      if a partial withdrawal or full surrender is made within the first three years of the
      policy. The level of these charges is:
               Less than 1 year:         3%
               1 to 2 years:             2%
               2 to 3 years:             1%
               More than 3 years:        No charge.

      (ii) The base Annual Management Charge has been reduced from 1.40% to 1.35%.
      For policies with net contributions (i.e. total premiums less total withdrawals)
      exceeding £125,000 the AMC is reduced by a further 0.15%.

      (iii) A 2% charge on the initial premium was introduced


      Non-linked policies

      The following products were closed to new business during 2010:
               Total Mortgage Protection Plan
               Level Term Assurance (PFA) – Reinsurance Range
               Decreasing Term Assurance (PFA) – Reinsurance Range
               Family Income Benefit – Reinsurance Range



                                              46
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

ABSTRACT OF VALUATION REPORT (CONTINUED)

3.    Discretionary charges and benefits

(1)   Not applicable.

(2)   There were no changes to premiums on reviewable protection policies.

(3)   Not applicable.

(4)   Monthly service charges on linked policies are increased annually in line with the
      Average Earnings Index (AEI) or the Retail Prices Index. In 2010 these increases
      were as follows:

       Products                                     Old Charge      New Charge     Index used
       Investment Plan                                 £2.52          £2.58           AEI
       Savings and Protection Mortgage Plan            £5.99          £6.14           AEI
       Savings Plan                                    £5.99          £6.14           AEI
       Mortgage Repayment Plan                         £2.52          £2.58           AEI
       Flexible for Life Plan                          £2.52          £2.58           AEI
       Critical Illness Plan                           £2.52          £2.58           AEI
       Regular Investment Plan                         £2.52          £2.58           AEI
       Tax Free Home Plan                              £4.32          £4.46           RPI
       (Home Protection Benefits)

      The charge increases are based on July to July increases in the relevant indices. In
      the previous year the RPI-linked plan charges remained unchanged due to a
      reduction in the RPI index. For 2010, the charge increases on these policies reflect
      the change in RPI over the 2 year period:

                          July 2008        July 2010         Increase
       RPI                  216.5            223.6             3.3%

                          July 2009        July 2010         Increase
       AEI                  137.6            141.2             2.6%

(5)   There were no changes to benefit charges on linked contracts.

(6)   Not applicable.

(7)   Unit Pricing for Internal Linked Funds

(a)   (i) Creation and cancellation of units of internal linked funds:

      The Company’s policy is to match the units allocated for policies (the “liability units”)
      closely to the units available within each corresponding unit fund (the “asset units”).
      The excess of asset units over the liability units is called the box of units. The
      Company’s policy is to avoid negative unit boxes, however, for practical reasons
      these can arise from time to time. The Company's policy also places a limit on the
      maximum size of the box of units for each fund, after allowing for any units reserved
      for new policies which have already been accepted but have yet to be issued.
      Whenever units in a fund are created or cancelled, cash or assets of equivalent value
      at the bare price are added or deducted respectively.

      Within the above policy, the Company’s practice is to create or cancel units such that
      each fund’s box size is the smallest practical commensurate with efficient dealing in
      the investments permitted under the guidelines for the fund.

(a)   (ii) Unit Prices:


                                               47
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

ABSTRACT OF VALUATION REPORT (CONTINUED)

      The unit prices make allowance for the actual or expected outgoings from the fund,
      actual tax charges and prospective tax liabilities attributable to the fund and are
      computed for each fund normally each working day as follows:-

      i)      The assets of the fund are valued, together with any accrued income and
              uninvested cash as follows:-
      a)      The maximum value of any asset may not exceed the market value at which
              it may be purchased, increased by any charges which may be expected; and
      b)      The minimum value of any asset may not be less than the market value at
              which it may be sold, reduced by any charges which may be expected.
      c)      The mid-market value of any asset is the average of the maximum and
              minimum values.

      ii)     For listed securities, prices quoted on a recognised Stock Exchange are
              used. Otherwise, the value of assets is determined by the Company in
              conjunction with its investment managers.

      iii)    Any other charges incurred or expected are deducted or added.

      iv)     For single priced funds, the price of the units is the sum of the mid-market
              values of the assets divided by the number of units in issue.

      (v)     For dual priced funds, the price will be on a bid or offer basis as appropriate.
      a)      The bid price of the units is the sum of the bid-market values divided by the
              number of units in issue.
      b)      The offer price of the units is the bid price increased for a bid/offer spread.

(a)   (iii) Valuation of Assets:

      For all funds the assets are valued on a mid-market basis, where the mid-market
      value of the assets is the average of the valuations on an offer and a bid basis as
      described above. A dilution levy may be applied to large transactions, at the
      discretion of the company, to avoid dilution of existing investments.

(a)   (iv)    For the purpose of calculating the unit price of each fund the assets are
      valued at 12pm. Allocations and deallocations of units from policies use the price at
      the next valuation following receipt of instructions, except for switch transactions
      where a cut-off point of 5pm applies, with instructions received after this time
      receiving the price at the next but one valuation point.

(b)   There is no change in the pricing basis for any funds. Unit-linked contracts can be
      invested in any of the unit-linked funds within the range of funds available to them.
      The total value of units held within the contract is determined based on the prices of
      the units in each of the fund in which the contract is invested.

(c)   Units held in collective investment schemes have been valued consistently with the
      underlying investments, using the price applicable at the 12pm valuation point.

(8)   Taxation deductions for internal linked funds

      Tax at 20% of realised chargeable gains is deducted from the funds quarterly in
      arrears. There is no settlement of tax on unrealised gains and losses which remain as
      a provision within the funds.




                                            48
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

ABSTRACT OF VALUATION REPORT (CONTINUED)

(9)    Taxation provisions for internal linked funds

       For all unit-linked funds, provision held in the internal linked fund is made on a daily
       basis for tax on both realised and unrealised chargeable gains. A provision is then
       made on the basis that there is adequate provision to meet the future incidence of tax
       payments as they fall due. Realised and unrealised chargeable gains include the
       retrospective element of deemed disposals of OEICS.

       Provision was made during 2010 on the internal linked funds for realised chargeable
       gains at a rate of 20% and unrealised chargeable gains where the rate of 20% is
       discounted     to    net    present     value    using    a    discount    rate  of
       1.1%. Provision for unrelieved capital losses is made at a rate ranging between 0%
       and 17% depending on the expectation that gains will arise in the future to offset
       those losses.

(10)   When a unit-linked fund invests through an external fund link and the external fund
       provider charges the Company, then these charges are passed on to investors in the
       fund as an addition to the existing charges. The end result is therefore profit neutral
       for the company.


4.     Valuation basis

(1)    Valuation methods

       Non-linked policies

       Term Assurances – Creditor business

       In the case of single premium creditor term assurances and disability cover a reserve
       equivalent to the greater of the (net of agent’s commission) unearned premium
       (without any cancellation charge), and the discounted value of the future benefits
       increased by 10% to provide for expenses, is held. This reserve covers any return of
       premium that is due upon the early repayment of the loan and consequent
       cancellation of the insurance contract including outstanding instalments (where
       applicable) for which the company takes credit.

       For revolving credit term assurances a reserve equivalent to the monthly instalment
       premium (net of agent’s commission) at the valuation date is held which covers the
       cost of outstanding risk.

       Additional reserves were held for creditor business to cover IBNR, pending claims,
       continuing claims, accrued profit commission, and for premiums receivable prior to
       the investigation date for which no valuation data had then been established.

       Term Assurances - Total Mortgage Protection Plan & PFA Products

       A gross premium method of valuation was adopted with explicit reserves for
       expenses after the valuation date. There was no minimum reserve.

       An additional reserve was held to cover Incurred But Not Reported (IBNR) claims.

       Term Assurances (Pre 9 April 2001)

       For conventional term assurance products issued by the Company a modified net
       premium method of valuation was adopted. In accordance with INSPRU 1.2.43, a
       zillmer adjustment was used to reduce the new business strain. This amounted to



                                              49
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

ABSTRACT OF VALUATION REPORT (CONTINUED)

      £50 + 12.5% * annual office premium * min (11, term), or 3.5% of the sum assured if
      less.

      An explicit expense reserve was established in order to provide for any future excess
      of expenses over the margin between annual office premium and zillmerised net
      premium. For joint life policies, benefits for each life were valued separately - half the
      zillmer adjustment was applied to each life and the whole of any explicit expense
      reserve was applied to the first life. Any negative reserves which arose were
      eliminated at a policy level.

      Optional Benefits
      For critical illness benefits on policies issued by the Company, explicit morbidity rates
      were assumed in the net premium valuation. For other optional benefits on all
      conventional term assurance products, the reserves were a percentage of the annual
      premium for the benefit.

      Term Assurances (Post 9 April 2001)

      For conventional term assurances (with the exception of the Over 50's Plan) a gross
      premium valuation basis was used with specific reserves for expenses after the
      valuation date.

      For the Over 50's Plan, a net premium valuation basis was used.


      Linked policies

      For property linked business, a gross premium valuation method was used.


      Comments applying to products in general

      For business reinsured from St. Andrew's Life to other HBOS group companies the
      reserve is the same as the reinsurer's valuation liability.

      Derivative contracts are used within the internal linked funds and the main fund for
      efficient portfolio management. All such contracts are fully covered. Consequently,
      no additional reserve has been made for derivative contracts.


(2)   Interest Rates

      Valuation interest rates used in the valuation were as follows:

                                                31/12/2009                  31/12/2010
       Term Assurances                        2.11% p.a. (net)            1.51% p.a. (net)
       Linked Products                        2.11% p.a. (net)            1.51% p.a. (net)


(3)   Risk Adjusted Yields

      The Company’s policy is to invest non-linked assets in fixed interest securities, cash
      and near cash instruments. The yields on the underlying assets are adjusted to allow
      for the maximum of 97.5% of the underlying yield.




                                             50
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

ABSTRACT OF VALUATION REPORT (CONTINUED)

(4)&(5) Mortality and Morbidity Rates

       Mortality and morbidity rates are based on UK experience. A small part of the
       creditor business is written outside the UK, in other EU countries.

       Non-linked Policies

       Term Assurances – Creditor business

       The following mortality tables have been used in the valuation:

        Product                      31/12/2009                           31/12/2010
        Creditor                    100% AM92U                           100% AM92U

       Term Assurances - Total Mortgage Protection Plan & PFA Products

       For Total Mortgage Protection Plans and PFA Products the following mortality has
       been used:-

                                          31/12/2009                       31/12/2010
        Male NS                          86%TMN00U                        81%TMN00U
        Male S                          109% TMS00U                      93% TMS00U
        Female NS                       104% TFN00U                      110% TFN00U
        Female S                        115% TFS00U                      110% TFS00U

       Specimen morbidity rates are shown below. The annual rates for critical illness cover
       only (per £1,000 sum assured) are:

        Age          Male NS              Male S             Female NS           Female S
        25             0.297              0.416                0.617               0.679
        35             0.614              0.929                1.709               1.940
        45             2.124              3.677                4.332               5.549
        55             6.762              12.561               9.528              13.234
        65            18.832              33.877               22.601             31.143


       At 31/12/2009, the specimen morbidity rates were:

        Age          Male NS              Male S             Female NS           Female S
        25             0.339              0.535                0.550              0.7103
        35             0.701              1.194                1.523               2.028
        45             2.427              4.728                3.862               5.801
        55             7.728              16.149               8.493              13.835
        65            21.523              43.556               20.147             32.559




                                             51
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

ABSTRACT OF VALUATION REPORT (CONTINUED)

     Term Assurances (Pre 9 April 2001)

     For term assurance policies the following mortality has been used:-

                             31/12/2009                          31/12/2010
      Male NS         55% TMC00U + 60% Male CI          52% TMC00U + 54% Male CI Table
                               Table
      Male S          55% TMC00U + 60% Male CI          52% TMC00U + 54% Male CI Table
                               Table
      Female NS      55% TFC00U + 60% Female CI           58% TFC00U + 60% Female CI
                               Table                                Table
      Female S       55% TFC00U + 60% Female CI           58% TFC00U + 60% Female CI
                               Table                                Table

     No explicit allowance has been made for possible future increases to mortality.

     The critical illness rates assumed are based on the base table (CIBT93) published in
     the report “A Critical Review” by the Critical Illness Healthcare Study Group.

     Term Assurances (Post 9 April 2001)

     For conventional term assurance policies apart from the Over 50's plan the following
     mortality has been used:-

                           31/12/2009                           31/12/2010
      Male NS       61% TMC00U + 66% Male CI           52% TMC00U + 54% Male CI Table
                              Table
      Male S        61% TMC00U + 66% Male CI           52% TMC00U + 54% Male CI Table
                             Table
      Female       61% TFC00U + 66% Female CI            58% TFC00U + 60% Female CI
      NS                     Table                                 Table
      Female S     61% TFC00U + 66% Female CI            58% TFC00U + 60% Female CI
                              Table                                Table

     For all conventional term assurances, no explicit allowance has been made for
     possible future increases to mortality.


     For the Over 50's Plan the following mortality has been used:-

                                     31/12/2009                         31/12/2010
      Male NS                       80% AMC00U                        116% AMC00U
      Male S                       145% AMC00U                        165% AMC00U
      Female NS                     95% AFC00U                        143% AFC00U
      Female S                     160% AFC00U                        165% AFC00U




                                           52
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

ABSTRACT OF VALUATION REPORT (CONTINUED)

      Linked Policies

      For linked policies, the following mortality has been used:-

       Product                               31/12/2009                   31/12/2010
       Endowment            Male NS      28% AMC00U + 100%           28% AMN00U + 30%
       Assurances                           Male CI Table                Male CI Table
                             Male S      61% AMC00U + 100%           39% AMS00U + 42%
                                            Male CI Table                Male CI Table
                             Female      28% AFC00U +100%                28% AFN00U
                               NS          Female CI Table           +30% Female CI Table
                            Female S     61% AFC00U + 100%            39% AFS00U + 42%
                                           Female CI Table              Female CI Table
       Investment             Male          88% AMC00U                   66% AMC00U
       Bonds                 Female         83% AFC00U                   83% AFC00U

      For linked policies, no explicit allowance has been made for possible future increases
      to mortality.


(6)   Expenses

      Non-linked policies

      The explicit expense allowance per policy is:-

                                                   31/12/2009              31/12/2010
       Term assurances (325 / 330)                   £24.43                  £30.18

      Expenses are before tax relief of 20%.

      Investment expenses are assumed to be 0.154% of the reserve.

      Linked policies

      The explicit expense allowance per policy is:-

                                                   31/12/2009               31/12/2010
       Investment Bonds (700)                        £31.89                   £47.71
       Assurances (720)                              £63.78                   £65.40

      Expenses are before tax relief of 20%.

      Investment expenses are assumed to be 0.154% of the reserve / unit fund for
      products managed through Insight. For products with funds invested through HIFML
      or with links to Invista, investment expenses are assumed to be 0.209% of the
      reserve. The investment expense for Guaranteed Investment Plan also includes an
      assumption to reflect the fee for managing the investment guarantee. For policies
      incepting before September 2008 this fee is 0.55% (paid to Treasury) and for policies
      incepting between September 2008 and December 2009 this fee is 0.6% (paid to
      BNP Paribas)




                                             53
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

ABSTRACT OF VALUATION REPORT (CONTINUED)

(7)    Unit Growth Rates and Expense Inflation

       For policies linked to internal linked funds, the following growth rates were used:-

        Type of business        Life / Pension           31/12/2009               31/12/2010
        All products                  Life               4.45% p.a.               3.99% p.a.

       The assumption for expense inflation and policy fee inflation is 4.70% p.a.


(8)    Future bonus rates in the valuation basis

       Not applicable.


(9)    Lapse rates

       The average lapse rates used in the valuation were as follows:

        Product                                                    Average lapse rate for the
                                                                      policy years (%p.a.)
                                                                  1-5     6-10 11-15 16-20
        Total Mortgage Protection Plan (LTA) (325)      lapse
        Total Mortgage Protection Plan (DTA) (330)               21.7     14.4     11.6    11.6
        (LIFE)
        Total Mortgage Protection Plan (LTA) (325)      lapse
        Total Mortgage Protection Plan (DTA) (330)               26.5     15.3     11.6    11.6
        (CI)
        Total Mortgage Protection Plan (LTA) (325)      lapse
        Total Mortgage Protection Plan (DTA) (330)               27.7     16.7     13.2    13.2
        (ACI)
        Protection Plan (325)                           lapse    19.2    12.6      9.3      9.3
        Temporary Term Assurance (325)                  lapse    19.2    12.6      9.3      9.3
        Level Term Assurance (325)                      lapse    19.2    12.6      9.3      9.3
        Loan Assurance Plan (330)                       lapse    24.6    16.3      14.0    14.0
        Loan Protection Plan (330)                      lapse    24.6    16.3      14.0    14.0
        Personal Investment Plan Retail (2nd Series)    surre
                                                                  3.2     4.6        4.2      4.2
        (700)                                           nder
        Personal Investment Plan BOSIS (2nd             surre
                                                                  2.7     5.9        5.3      5.3
        Series) (700)                                   nder

       For all other products no allowance is made for lapses in the valuation.


(10)   Other material basis assumptions

       All covered in the above sections.


(11)   Derivatives

       No derivative assets were hypothecated to liabilities in setting the valuation interest
       rate.




                                             54
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

ABSTRACT OF VALUATION REPORT (CONTINUED)

(12)   Impact of methodology changes

       There has been no further change in valuation method in respect of changes in
       INSPRU valuation rules since the previous year-end.


5.     Options and Guarantees

(1)    There is no requirement to hold any additional explicit reserves in respect of
       guaranteed annuity rate options.

(2)    There is no requirement to hold any additional explicit reserves in respect of
       guaranteed surrender values and guaranteed unit-linked maturity values that are
       greater than £10m.

(3)    There is no requirement to hold any additional explicit reserves in respect of
       guaranteed insurability options.

(4)    There are no other Guarantees or Options.


6.     Expense reserves

(1)    The total renewal (including terminal) expense loadings in the valuation are £37.5m.
       This figure includes both explicit and implicit expense allowances.

       An allowance for investment expenses, expressed as a percentage of the total
       mathematical reserve has been calculated as £35.8m.

(2)    Where the net premium valuation method is used, the net premium is restricted to
       80% of the office premium in order that the difference between the office and net
       premium is sufficient to cover the future expenses on the contracts.

(3)    The amount of modelled maintenance expenses is different to the maintenance
       expenses shown at line 14 of Form 43 because the latter includes additional
       expenses that are covered elsewhere in the Valuation.

(4)    An estimate has been made for the valuation surplus for SAL for the 12 months after
       the valuation date, combined with the expected new business strain based on
       planned new business volumes. This gives a surplus of £67.4m so no additional
       reserve is required.

(5)    Maintenance expense overrun reserve

       Explicit expense allowances are included in the calculation of the mathematical
       reserves. No maintenance expense overrun reserve is required. Explicit allowances
       are set in line with an analysis of actual and expected spend, with an additional
       prudential margin.

(6)    Not applicable.

7.     Mismatching reserves

(1)    Not applicable.

(2)    Not applicable.




                                            55
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

ABSTRACT OF VALUATION REPORT (CONTINUED)

(3)   Currency Matching

      All non-unit reserves are matched by assets in the same currency.

(4)   Resilience Capital Requirement

      A resilience capital requirement (RCR) has been calculated in accordance with
      INSPRU 3.1.10. The RCR was determined by identifying assets which, after applying
      the scenario set out below, had a value equal to the firm's long term insurance
      liabilities under that scenario. The amount of the RCR was then calculated by
      deducting the long term insurance liabilities from the value of the assets identified
      above, prior to applying the scenario below.

      For the purposes of calculating the RCR, the most onerous scenario under INSPRU
      3.1.16 was a fall in the market value of equities by 10%, a fall in real estate value of
      20%, and an increase in the yields of fixed interest investments of 80 basis points.

(5)   There are no assets invested outside the UK and so no testing was necessary.

(6)   After carrying out this test, an RCR of £2.7m is required. Under the scenario
      described above, the aggregate amount of the liabilities increases by £7.2m. The
      aggregate amount by which the assets allocated to match these liabilities increases
      from the amount shown in Form 13 was £4.5m.

(7)   No further reserve was made in respect of the resilience capital requirement test.


8.    Other special reserves

      No other reserves are significant enough to include.

9.    Reinsurance

(1)   The company did not cede any reinsurance on a facultative basis to a reinsurer who
      is not authorised to carry on insurance business in the UK.
(2)
       (d) Reinsurer        1. Gen Re             2. Halifax Life Limited
       (e) Nature &         Original Terms        Original Terms
       Extent of cover      Reinsurance           Reinsurance covering
       under treaty         covering TMPP         Personal Investment
                            LTA and DTA           Plan and Flexible
                            policies sold after   Protection Plan
                            1/3/2004
       (f) Treaty           Nil                   Nil
       Premiums (£000)
       (g) Amounts          Nil                   Nil
       Deposited
       (h) Closed to        Yes                   No
       New Business
       (i) Undischarged     No                    No
       Obligation
       (j) Mathematical     37,851                95,680
       Reserves Ceded
       (£000)
       (k) Retention        10% of all claims     Nil
                            notified after        100% reinsured
                            31/12/2010.



                                             56
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

ABSTRACT OF VALUATION REPORT (CONTINUED)

(l)   Gen Re and HLL are authorised to carry on business in the UK.

(m)   HLL is a connected company of the insurer. Gen Re is not.

(n)   The company is exposed to the credit default risk of the reinsurer.

(o)   No provision has been made for the refunding of any reinsurance commission in the
      event of lapse or surrender of a contract.

(p)   There are no financing arrangements.

(3)   Not Applicable


10.   Reversionary (or annual) bonus

      Not applicable.




                                            57
RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES
ST ANDREW'S LIFE ASSURANCE PLC
FINANCIAL YEAR ENDED 31st DECEMBER 2010

DIRECTORS’ CERTIFICATE REQUIRED BY RULE 9.34 OF THE ACCOUNTS AND STATEMENTS
RULES

We certify:

1.    (a)     that the return has been properly prepared in accordance with the requirements in IPRU(INS),
              GENPRU and INSPRU, as modified by waivers dated 4 May 2007 and 30 December 2010
              issued under section 148 of the Financial Services and Markets Act 2000, and;

      (b)      we are satisfied that:

              (i)      throughout the financial year in question, the insurer has complied in all material respects
                       with the requirements in SYSC and PRIN as well as the provisions of IPRU(INS),
                       GENPRU, and INSPRU; and

              (ii)     it is reasonable to believe that the insurer has continued so to comply subsequently, and
                       will continue so to comply in future.

2.    (a)     that in our opinion, premiums for contracts entered into during the financial year and the
              resulting income earned are sufficient, under reasonable actuarial methods and assumptions,
              and taking into account the other financial resources of the insurer that are available for the
              purpose, to enable the insurer to meet its obligations in respect of those contracts and, in
              particular, to establish adequate mathematical reserves;

      (b)     that the sum of the mathematical reserves and the deposits received from reinsurers as shown
              in Form 14, constitute proper provision at the end of the financial year in question for the long-
              term insurance liabilities (including all liabilities arising from deposit back arrangements, but
              excluding other liabilities which had fallen due before the end of the financial year) including any
              increase in those liabilities arising from a distribution of surplus as a result of an actuarial
              investigation as at that date into the financial condition of the long-term insurance business; and

      (c)     that we have in preparing the return, taken and paid due regard to advice from every actuary
              appointed by the insurer to perform the actuarial function in accordance with SUP 4.3.13R.




            P D Loney                                                                    Director


            K Luscombe                                                                   Director


            A G Kane                                                                     Director

            Date : 28 March 2011




                                                         58
ST ANDREW'S LIFE ASSURANCE PLC
GLOBAL BUSINESS
FINANCIAL YEAR ENDED 31st DECEMBER 2010

Independent auditors’ report to the directors pursuant to rule 9.35 of the Interim Prudential
Sourcebook for Insurers

We have audited the following documents prepared by the insurer pursuant to the Accounts and Statements
Rules set out in Part I and Part IV of Chapter 9 to IPRU(INS) the Interim Prudential Sourcebook for Insurers,
GENPRU the General Prudential Sourcebook and INSPRU the Prudential Sourcebook for Insurers (‘the
Rules’) made by the Financial Services Authority under section 138 of the Financial Services and Markets
Act 2000:

    •   Forms 2, 3, 13 to 17, 40 to 45, 48, 58 and 60, (including the supplementary notes) (‘the Forms’);

    •   the statement required by IPRU(INS) rule 9.29 (‘the statement’); and

    •   the valuation report required by IPRU(INS) rule 9.31(a) (‘the valuation report’);.

We are not required to audit and do not express an opinion on:

    •   Forms 46, 47, 50 to 55 (including the supplementary notes)

    •   the statements required by IPRU(INS) rules 9.30; and

    •   the certificate required by IPRU(INS) rule 9.34(1).


Respective responsibilities of the insurer and its auditors

The insurer is responsible for the preparation of an annual return (including the Forms, the statement and
the valuation report) under the provisions of the Rules. The requirements of the Rules have been modified
                                                                                                th
by directions issued under section 148 of the Financial Services and Markets Act 2000 on 4 May 2007 and
   th
30 December 2010. Under IPRU(INS) rule 9.11 the Forms, the statement and the valuation report are
required to be prepared in the manner specified by the Rules and to state fairly the information provided on
the basis required by the Rules. The methods and assumptions determined by the insurer and used to
perform the actuarial investigation as set out in the valuation report are required to reflect appropriately the
requirements of INSPRU 1.2.

It is our responsibility to form an independent opinion as to whether the Forms, the statement and the
valuation report meet these requirements, and to report our opinion to you. We also report to you if, in our
opinion:
     • adequate accounting records have not been kept, or returns adequate for our audit have not been
         received from branches not visited by us; or
     • the Forms, the statement and the valuation report are not in agreement with the accounting records
         and returns; or
     • we have not received all the information we require for our audit.

This report has been prepared for the directors of the insurer to comply with their obligations under
IPRU(INS) rule 9.35 and for no other purpose. We do not, in providing this report, accept or assume
responsibility for any other purpose save where expressly agreed by our prior consent in writing.




                                                      59
ST ANDREW'S LIFE ASSURANCE PLC
GLOBAL BUSINESS
FINANCIAL YEAR ENDED 31st DECEMBER 2010

Basis of opinion

We conducted our work in accordance with Practice Note 20 'The audit of insurers in the United Kingdom
(Revised)' issued by the Auditing Practices Board. Our work included examination, on a test basis, of
evidence relevant to the amounts and disclosures in the Forms, the statement and the valuation report. The
evidence included that previously obtained by us relating to the audit of the financial statements of the
insurer for the financial year. It also included an assessment of the significant estimates and judgements
made by the insurer in the preparation of the Forms, the statement and the valuation report.

We planned and performed our work so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the
Forms, the statement and the valuation report are free from material misstatement, whether caused by fraud
or other irregularity or error and comply with IPRU(INS) rule 9.11.

In accordance with IPRU(INS) rule 9.35(1A), to the extent that any document, Form, statement, analysis or
report to be examined under IPRU(INS) rule 9.35(1) contains amounts or information abstracted from the
actuarial investigation performed pursuant to IPRU(INS) rule 9.4, we have obtained and paid due regard to
advice from a suitably qualified actuary who is independent of the insurer.

Opinion

In our opinion:

(i) the Forms, the statement and the valuation report fairly state the information provided on the basis
required by the Rules as modified and have been properly prepared in accordance with the provisions of
those Rules; and

(ii) the methods and assumptions determined by the insurer and used to perform the actuarial investigation
as set out in the valuation report appropriately reflect the requirements of INSPRU 1.2.




PricewaterhouseCoopers LLP
Chartered Accountants

28 March 2011




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