NAIC NUMBER UNION LABOR LIFE INSURANCE

					UNION LABOR LIFE INSURANCE COMPANY

   EXAMINATION: DECEMBER 31, 2007




                               NAIC NUMBER 69744
                                         TABLE OF CONTENTS


                                                                                                               Page


Salutation................................................................................................      1
Scope of Examination ............................................................................               2
Status of Prior Examination Findings................................................... .                       3
History ....................................................................................................    3
     General............................................................................................        3
     Capital Stock...................................................................................           3
     Dividends to Stockholder................................................................                   3
     Management....................................................................................             4
            Board of Directors .................................................................                4
            Officers ..................................................................................         4
            Committees ............................................................................             5
     Conflicts of Interest ........................................................................             5
     Corporate Records ..........................................................................               5
     Acquisition and Dissolution............................................................                    5
Affiliated Companies .............................................................................              5
Organizational Chart ………………………………………………….                                                                       6
Intercompany Agreements .....................................................................                   7
Fidelity Bond and Other Insurance ........................................................                      8
Pension, Stock Ownership and Insurance Plans.....................................                               8
Statutory Deposits ..................................................................................          10
Territory and Plan of Operation .............................................................                  11
Insurance Products and Related Practices ..............................................                        11
Reinsurance ............................................................................................       12
Accounts and Records ............................................................................              12
Financial Statements...............................................................................            13
     Balance Sheet..................................................................................           14
            Assets .....................................................................................       14
            Liabilities, Surplus and Other Funds .....................................                         15
     Summary of Operations ..................................................................                  16
     Capital and Surplus Account ..........................................................                    17
     Analysis of Examination Changes to Surplus.................................                               19
     Comparative Financial Position of the Company ...........................                                 20
Notes to Financial Statements ................................................................                 21
Comments and Recommendations .........................................................                         23
Subsequent Events..................................................................................            26
Conclusion..............................................................................................       27
Signatures ...............................................................................................     28
                                                   Baltimore, Maryland
                                                   December 16, 2008
Honorable Alfred W. Gross
Chairman, NAIC Financial Condition (E) Committee
Insurance Commissioner
SCC Bureau of Insurance Commonwealth of Virginia
1300 East Main Street
Richmond, Virginia 23219

Honorable Merle D. Scheiber
Secretary, Midwestern Zone, NAIC
Director of Insurance
South Dakota Division of Insurance
Department of Revenue and Regulation
445 East Capitol Avenue
Pierre, South Dakota 57501

Honorable Joel Ario
Secretary, Northeastern Zone, NAIC
Insurance Commissioner
Pennsylvania Department of Insurance
1326 Strawberry Square
Harrisburg, Pennsylvania 17120

Honorable James J. Donelon
Secretary, Southeastern Zone, NAIC
Insurance Commissioner
Department of Insurance State of Louisiana
1702 N. Third Street
Baton Rouge, Louisiana 70802

Honorable Morris Chavez
Secretary, Western Zone, NAIC
Insurance Commissioner
Department of Insurance
Pera Building
1120 Paseo De Peralta
Sante Fe, New Mexico, 87504

Honorable Ralph S. Tyler
Insurance Commissioner
Maryland Insurance Administration
525 St. Paul Place
Baltimore, Maryland 21202
Dear Sirs:
  In accordance with Section 2-205 of the Insurance Article of the Annotated Code of
Maryland, we have examined the financial condition and activities of



                  THE UNION LABOR LIFE INSURANCE COMPANY


(hereinafter called the “Company”), at its home offices located at 8403 Colesville Road, Silver
Spring, MD, and the following Report on Examination is submitted.


                                SCOPE OF EXAMINATION

    This examination, covering the period from January 1, 2003 to December 31, 2007, including
any material transactions and/or events noted occurring subsequent to December 31, 2007, was
conducted under the Association Plan of the National Association of Insurance Commissioners
(NAIC) by examiners of the Maryland Insurance Administration, representing the Northeastern
Zone of the NAIC. The Midwestern, Southeastern and Western Zones were invited to
participate, but did not respond to the examination call.
    Our examination was conducted in accordance with examination policies and standards
established by the Maryland Insurance Administration and procedures recommended by the
NAIC and, accordingly, included such tests of the accounting records and such other procedures
as we considered necessary in the circumstances.
    Our examination included a review of the Company's business policies and practices,
management and corporate matters, a verification and evaluation of assets and a determination of
the existence of liabilities. In addition, our examination included tests to provide reasonable
assurance that the Company was in compliance with applicable laws, rules and regulations. In
planning and conducting our examination, we gave consideration to the concepts of materiality
and risk, and our examination efforts were directed accordingly.
    The Company was audited annually by an independent public accounting firm. The firm
expressed unqualified opinions on the Company’s financial statements for calendar years 2003
through 2007. We placed substantial reliance on the audited financial statements for calendar
years 2003, 2004, 2005 and 2006, and consequently performed only minimal testing for those
periods. We concentrated our examination efforts on the year ended December 31, 2007. We
reviewed the working papers prepared by the independent public accounting firm related to the
audit for the year ended December 31, 2007 and directed our efforts to the extent practical to
those areas not covered by the firm’s audit.




                     STATUS OF PRIOR EXAMINATION FINDINGS
                                               2
   Our examination included a review to determine the current status of the 12 exception
conditions commented upon in our preceding Report on Examination dated April 28, 2004,
which covered the period January 1, 1998 to December 31, 2002. We determined that the
Company had satisfactorily addressed all 12 of those exception conditions.


                                           HISTORY

General:

    The Company was incorporated on October 26, 1925, as a capital stock life insurance
company in the state of Maryland. The Company was formed to write all insurance connected
with life risks; to grant, purchase and dispose of annuities; and to make and issue policies of
insurance against injury, disablement or death resulting from traveling or general accident and
against disability resulting from sickness. The Company was founded by the American
Federation of Labor, primarily to provide life insurance protection to union workers at the lowest
possible cost.

    During 1987, ULLICO Inc., a holding company, was formed and a reorganization was
effected whereby all shares of capital stock of the Company were exchanged for equal shares of
ULLICO Inc. Through this exchange of shares of capital stock, ULLICO Inc. became the parent
of the Company. The ownership of ULLICO Inc.’s capital stock is confined primarily to
American labor unions and affiliates of the labor movement.

    The Company’s major markets include providing, through labor unions, group life and health
insurance, and group annuities to union workers. These product lines represent approximately
89.1% of the total direct premiums written during 2007.

Capital Stock:

   The Company's Articles of Incorporation authorized the Company to issue 360,000 shares of
common capital stock with a par value of $25 per share. As of December 31, 2007 the number
of shares outstanding was 143,148 with an aggregate par value of $3,578,700, all issued to the
Company's parent, ULLICO Inc.

Dividends to Stockholder:

   During the period under examination, the Company declared and paid the following ordinary
dividends to its sole stockholder, ULLICO Inc.:
                 Year          Type                      Amount
                 2005          Cash                      $8,800,000
                 2006          Cash                      $5,000,000

   Since these dividends were not extraordinary, approval by the Administration was not
required. However, the Company did notify the Administration in advance of these dividends.

                                                3
Management:
   The following persons were elected and serving as the Company's directors as of December
31, 2007:

Name and Address                   Principal Occupation

Mark E. Singleton, Chairman        Chairman and Chief Executive Officer
Washington, District of Columbia    The Union Labor Life Insurance Company

Anne E. Bossi                      President
Silver Spring, Maryland             The Union Labor Life Insurance Company

Adam M. Fried                      Vice President, Enterprise Risk Management
Silver Spring, Maryland             The Union Labor Life Insurance Company

Damon Gasque                       Acting Chief Financial Officer and Treasurer
Silver Spring, Maryland             The Union Labor Life Insurance Company

Cathy A. Humphrey                  Vice President, Investment Operations
Silver Spring, Maryland             The Union Labor Life Insurance Company

James J. Kennedy                   Senior Vice President, Market Development
Washington, District of Columbia    ULLICO Inc.

Herbert A. Kolben                  Senior Vice President, Real Estate Investment Banking
Washington, District of Columbia    Group
                                    The Union Labor Life Insurance Company

Joseph R. Linehan                  Vice President, Asset Management
Washington, District of Columbia    ULLICO Inc.

James M. Paul                      Senior Vice President, Human Resources
Washington, District of Columbia    ULLICO Inc.

   The following persons were elected and serving as the Company’s officers at the Vice
President level and above as of December 31, 2007:

Mark E. Singleton                  Chairman and Chief Executive Officer
Anne E. Bossi                      President
Damon Gasque                       Vice President, Acting Chief Financial Officer and
                                    Assistant Treasurer




                                             4
Cathy A. Humphrey                      Vice President of Investment Operations
Herbert A. Kolben                      Senior Vice President, Real Estate Investment Banking
                                        Group
Joseph R. Linehan                      Vice President of Asset Management
James M. Paul                          Senior Vice President of Human Resources
Teresa E. Valentine                    Senior Vice President, General Counsel and Secretary

  The Company did not maintain any committees of the Board of Directors (Board) as of
December 31, 2007. This is consistent with the Company’s By-laws.

Conflicts of Interest:
   Directors and officers of the Company regularly respond to conflict of interest questionnaires.
If possible conflicts were disclosed, they were scrutinized further by Company officials. Our
review of the responses to the questionnaires completed for 2007 disclosed that there were no
significant conflicts of interest reported. Furthermore, no additional potential conflicts of interest
were noted during our examination.
Corporate Records:

   We reviewed the minutes of the meetings of the Board and the shareholders for the period
under examination. Based on our review, it appeared that the minutes documented most of the
Company’s significant transactions and events and approval of those transactions and events
through 2007. However, the resolution of certain issues brought up in Board meetings that were
discussed in executive session were not adequately documented in the Board minutes. See
further comments regarding this condition in the “Comments and Recommendations” section of
this Report under the caption “Corporate Governance/Enterprise Risk Management”.

Acquisition and Dissolution:

   Effective December 31, 2004, the Union Standard of America Life Insurance Company
("USA Life"), a Maryland Corporation, was merged into the Company with the Company being
the surviving company. USA Life was previously a wholly owned subsidiary of the
Company. The Articles of Merger, which were approved by the Maryland Insurance
Commissioner, state that the Company assumes and is liable for all the liabilities and obligations
of USA Life. The Company's 2004 Statutory Annual Statement reflected the merger of all
applicable assets and liabilities. Additionally, the Company's investment in USA Life's capital
stock was eliminated.


                                  AFFILIATED COMPANIES
   The Company is a wholly owned subsidiary of ULLICO Inc., a Maryland holding company.
The stock of ULLICO Inc. is not publicly traded. ULLICO Inc. is a privately owned company
with its shares being held by unions, union affiliated benefit trusts, other labor affiliated
organizations, individuals affiliated with the labor movement, and directors and officers of
ULLICO Inc. According to Company management, there was only one stockholder of ULLICO
Inc. that owned more than 10 percent of ULLICO Inc’s voting stock.
                                                  5
   As of December 31, 2007, the Company had two wholly owned subsidiaries: ULLICO Life
Insurance Company, a Texas life and health insurer; and URE Fund LLC. In addition, the
Company and its affiliate, ULLICARE, Inc. were limited partners of ULLICARE Limited
Partnership, whereby ULLICARE, Inc. owned 99% of ULLICARE Limited Partnership and
Union Labor Life owned the remaining 1%.

    The ULLICO Inc. holding company structure as of December 31, 2007, is depicted in the
following chart:


                             ORGANIZATIONAL CHART

                                                                          Domiciliary
                                                                          Jurisdiction
ULLICO Inc.                                                                Maryland
 -The Union Labor Life Insurance Company (insurer) – 100%                  Maryland
    -URE Fund LLC – 100%                                                   Delaware
    -ULLICO Life Insurance Company (insurer) – 100%                        Texas
 -UNIONCARE, Inc. – 100%                                                   Maryland
 -ULLICO Casualty Company (insurer) – 100%                                 Delaware
 -ULLICO Insurance Group, Inc.                                             Delaware
 -ULLICO Management Company – 100%                                         Maryland
 -MRCo, Inc. – 100%                                                        Maryland
 -ULLICARE, Inc. – 100%                                                    Maryland
    -ULLICARE Limited Partnership – 99% (1% owned by Union
       Labor Life)                                                         Maryland
 -Trust Fund Advisors, Inc. – 100%                                         Maryland
 -ULLICO International Company, LLC – 100%                                 Delaware
 -ULLICO Investment Company, Inc. – 100%                                   Maryland
 -ULLICO Standard of American Casualty Company – 100%                      California




                                           6
                               INTERCOMPANY AGREEMENTS

Consolidated Income Tax Allocation Agreement:

    The Company, along with various other subsidiaries of the ULLICO Inc. holding company
system, is a party to a Federal income tax sharing agreement with its parent, ULLICO Inc. The
agreement, which was originally effective on December 31, 1987, was most recently amended on
May 2, 2005.

    In accordance with this agreement, the Company filed consolidated Federal income tax
returns with ULLICO Inc. for each year under examination. The agreement provides that a
consolidated Federal income tax return shall be filed by the parent for each taxable year the
affiliated group is required or permitted to file such a return and this agreement is in effect. The
agreement also provides that the consolidated tax liability of the affiliated group will be
allocated to each member based on the income tax liability of each member as computed on a
separate company basis. If a member’s tax liability as computed on a separate return basis
exceeds the member’s share of the consolidated tax liability, then the member must also pay an
additional amount calculated as the excess of the tax liability computed on a separate return basis
over the member’s share of the consolidated tax liability.

Consolidated Services Agreement:

   Effective January 1, 2007 the Company entered into a “Consolidated Services Agreement”
with its affiliated and subsidiary companies, referred to as the ULLICO Group. The agreement
replaced the previous intercompany Consolidated Services Agreement that was dated back to
1999.

    The services which may be performed in whole or in part under the agreement may include,
but are not limited to, accounting, tax and auditing, legal, actuarial, financial management,
underwriting, claims management, risk management, employee benefits and personnel
administration, sales, electronic data processing operations, communications operations, and
investment services. The agreement provides that the Company will reimburse ULLICO Inc. for
the cost of all specific operating expenses incurred and any expenses allocated to the Company
for services performed on their behalf. During 2007, the Company paid $22,861,049 under this
agreement.

Investment Advisory Agreement:

   Effective March, 1, 1990, the Company entered into an investment advisory agreement with
an affiliated company, Trust Fund Advisors, Inc. (TFA). The agreement, which was most
recently amended on May 24, 2001, provides that TFA will act as an investment manager with
respect to certain employee benefit plans under the Company’s Separate Account business. With
the exception of two specific Separate Account funds that are managed internally, all Separate
Account funds at the time of the original agreement are managed under the original agreement
with amendments having been added for each new Separate Account fund that has been created
since the original agreement became effective. Further, the agreement also provides for TFA to
enter into “Sub-Advisory Agreements” to retain sub-advisers to provide investment advisory
                                                 7
assistance. The Company incurred expenses totaling approximately $607,105 in 2007 for
services rendered by TFA.

Sub-Advisory Agreement:
    Effective October 1, 1994, the Company entered into an investment sub-advisory agreement
with TFA, an affiliated company, to furnish TFA with investment research, administrative and
statistical services in connection with TFA’s activities as investment manager with respect to
certain employee benefit plans (the “Plans”) under the Company’s Separate Account business.
Specifically, the agreement provides that the Company shall be responsible for providing TFA
and the Plans, investment advisory assistance and portfolio management advice in connection
with the Plans’ investment in real estate (equity and debt). During 2007, under this agreement,
the Company received approximately $401,688 as reimbursement for services rendered to TFA.
Reinsurance Agreement:

   As of December 31, 2007, the Company assumed business through a reinsurance agreement
with an affiliate. See the “Reinsurance” section of this Report for details regarding the
Company’s reinsurance contracts.

    All of the aforementioned intercompany agreements have been submitted and approved by
the Maryland Insurance Administration in accordance with Section 7-703 of the Insurance
Article of the Annotated Code of Maryland.


                      FIDELITY BOND AND OTHER INSURANCE

    The Company is a named insured on a fidelity bond issued to its parent, ULLICO Inc. Other
affiliated insurance and non-insurance companies are also named insured’s on the bond, which
provides coverage in the aggregate amount of $10,000,000, with a single loss limit of $5,000,000
and with a single loss deductible of $100,000. The coverage exceeds the minimum amount of
fidelity bond coverage recommended by the NAIC for the Company and the insurance
subsidiaries. In addition, the Company has procured other business property and liability
coverage. Based on our review, the Company’s insurance coverage appeared to be adequate.


               PENSION STOCK OWNERSHIP AND INSURANCE PLANS

Employee Retirement Plan:

   The Company participated in a defined benefit qualified pension plan, sponsored by its parent
ULLICO Inc., covering substantially all of its employees and certain employees of ULLICO Inc.
and its subsidiaries. The Plan, known as the ULLICO Inc. Pension Plan and Trust, which became
effective on December 31, 1994, was comprised of two separate pension plans. The ULLICO
Inc. Pension Plan and Trust, and the Zenith Administrators, Inc. Central Region Pension Plan.
The Plan replaced the Retirement Plan of the Union Labor Life Insurance Company, originally
effective January 1, 1962, and the Zenith Administrators, Inc. Central Region Pension Plan,

                                               8
originally effective January 1, 1985. Plan benefits were based on years of service and the
employee’s final three years average annual compensation. The Company is not directly liable
for obligations applicable to the benefits under these plans. ULLICO Inc.’s policy for funding
the Plan was to contribute such amounts as were necessary to provide assets sufficient to meet
benefits to be paid to plan members and to contribute annually an amount not less than the
required contribution nor greater than the maximum tax deductible contribution. The Company
made no contributions to the plan and the plan was adequately funded in accordance with the
Plan’s policy and the Employee Retirement Income Security Act. Effective on December 31,
2007, the Zenith Administrators, Inc. Central Region Pension Plan was merged into the ULLICO
Inc. Pension Plan and Trust.

Supplemental Defined Benefit Pension Plan:

    The Company participates in an unfunded supplemental defined benefit pension plan
sponsored by ULLICO Inc. The Company is not directly liable for obligations for benefits under
this plan since it was determined to be a holding company plan. Eligible employees could
become qualified for postretirement benefits if they reach retirement age while working for the
Company. ULLICO Inc. allocates benefit payments made on eligible participants to the business
unit from which they entered benefit status. The Company made no contributions to the plan and
was not required to recognize any pension expense during 2007.

Postretirement Benefit Plan:

     The Company provides its retired employees the same medical coverage it provides to its
active employees up to age 65. At age 65, when Medicare becomes the primary payer, active
coverage is replaced with a plan that provides up to 100% coverage when coordinated with
benefits payable by Medicare. Dental and vision coverage is the same as active employees for
all retirees regardless of age. The postretirement life insurance benefit is 200% of final salary for
management employees and 150% of final salary for union employees. Substantially all of the
Company’s employees may become eligible for those benefits if they reach normal retirement
while working with the Company. This Plan has been amended effective January, 1998,
whereby post retirement benefits, including life insurance, are eliminated for management hires
after January 1, 1998. In addition, the life insurance benefit was lowered to 50% of final salary
for management employees hired prior to January 1, 1998. The Company is not directly liable
for obligations for benefits under this plan, since it was determined to be a plan of the holding
company. ULLICO Inc. allocates benefit payments made on eligible participants to the business
unit from which they entered benefit status. The Company made contributions to the plan
totaling $939,000 during 2007.

Employee Savings and Investment Plan:

   The Company participated in a defined contribution savings and investment plan sponsored
by its parent ULLICO Inc., covering substantially all of the Company’s employees and certain
employees of ULLICO Inc. and ULLICO Inc’s subsidiaries. The Plan, known as the ULLICO
Inc. 401(k) Plan and Trust (the Plan) was effective December 31, 1994 and replaced a number of
similar plans established by various subsidiaries and affiliates of ULLICO Inc. The plan qualifies
as a salary reduction plan under Section 401(k) of the Internal Revenue Code (IRS). Under the
                                                 9
Plan, all employees are considered eligible employees and may participate in the Plan, once they
meet the eligibility and participation requirements. Participants may contribute any amount up to
the IRS limitation rules. The Company matched employee contributions up to 3% of the
employee’s annual compensation. The Company made contributions of $376,000 in 2007. These
contributions included amounts applicable to the Company Profit Sharing and to Company
Matching as outlined in the ULLICO Inc. 401(k) Plan and Trust.

Stock Ownership Plan:

   There was no stock ownership plan for the Company’s stock.

Other Insurance and Benefits:

  The Company provides medical, dental, vision and life insurance benefits to employees at
minimal cost to the employees.


                                    STATUTORY DEPOSITS

   In compliance with Section 4-106 of the Annotated Code of Maryland, the Company had
deposited in trust with the Maryland State Treasurer, United States Treasury Notes with a par
value of $3,580,000 and a market value of $3,710,598, as of December 31, 2007. These funds
were held for the protection of all policyholders.
    In addition, the Company had statutory deposits, consisting of United States Treasury Notes
and other bond issues, with the following jurisdictions. These deposits were held for the
protection of the policyholders in those jurisdictions. These deposits and the above mentioned
bonds deposited with the Maryland State Treasurer are included in the Company’s balance sheet
under the captions “Bonds”.
                                     Par Value              Market Value
               Arkansas        $       215,000         $      225,548
               Florida                 580,000                592,551
               Georgia                  50,000                 50,309
               Idaho                   225,000                232,769
               Maryland              3,580,000              3,710,598
               Massachusetts           100,000                103,453
               Missouri                640,000                671,398
               New Mexico              125,000                131,133
               North Carolina          435,000                450,021
               South Carolina          550,000                568,992
               Virginia                530,000                548,592

              Total             $    7,030,000        $    7,285,364




                                               10
                        TERRITORY AND PLAN OF OPERATION
    As of December 31, 2007, the Company was authorized to transact the business of insurance
in fifty (50) states and the District of Columbia.

    During the prior examination period, in 2002 pursuant to a consent order, the Company
agreed to a suspension of its authority to write new business in the State of Florida. During the
period of suspension the Company was not permitted to write business within the State of
Florida but they were required to continue to administer and service all insurance policies and
honor all current and future claims arising from policies currently issued in Florida.
Subsequently on November 14, 2007 the Company's licenses were reinstated and they remained
in good standing as of the December 31, 2007. All other State licenses were in good standing as
of December 31, 2007.

     The Company’s business was primarily comprised of group life and health insurance and
group annuities sold primarily to the union member market. These product lines represent 89.1%
of the total direct premiums written during 2007. The majority of this business is marketed
directly by Company representatives to persons representing the union labor market. The
Company also utilizes independent agents and brokers and direct marketing to individuals for a
limited amount of its business. During the current examination period the Company ceased
actively marketing group health business. The existing group health business is currently in run-
off.

    The majority of the Company’s direct business was written in California (18.9%), District of
Columbia (6.3%), Florida (7.3%), Maryland (4.8%), New Jersey (14.4%), and New York
(16.8%). $110,393,733 in direct premiums was written from these jurisdictions, accounting for
68.5% of the total direct business written during 2007.


                   INSURANCE PRODUCTS AND RELATED PRACTICES
     The Maryland Insurance Administration’s Life and Health Market Conduct Unit conducted
a market conduct examination for the period January 1, 2001 through December 31, 2003. The
final report was dated October 24, 2006. The Report contained numerous law violations most of
which were related to the claims area. There were no findings which have an impact on our
financial examination. During this examination, we did not review the following market conduct
related areas:

       Policy Forms
       Fair Underwriting Practices
       Advertising and Sales Material
       Treatment of Policyholders:
          Claims Processing (Timeliness)
          Complaints




                                               11
                                       REINSURANCE

Assumed Reinsurance:

    The Company assumed reinsurance on group life, group health, group annuity, and
individual life business from various insurance companies. The assumed business included a
quota share of risk premiums and claims for employer specific and aggregate stop loss benefits
issued by ULLICO Casualty Company, an affiliated company.

    During 2007, the Company had earned premium income relating to business assumed
totaling $50,289,701. As of December 31, 2007, the Company reported liabilities and reserves
relating to its assumed business totaling $38,284,749. Approximately half of this liability or
$19,120,607 is derived from a Group Health Stop Loss Agreement with Canada Life Assurance
Company.

Ceded Reinsurance:

    The Company ceded business through automatic and facultative contracts with a number of
reinsurance companies. The reinsurance coverage and the Company’s retention vary, depending
on the type and kind of business reinsured. During 2007, the Company ceded premiums totaling
$15,940,836 and received or derived reinsurance ceded benefits totaling $10,760,524. The
largest ceded contract that the Company maintains is with United Teacher Associates Insurance
Company. The agreement is a 100% quota share group health cession whereby the Company
cedes 77.2% or $12,321,310 of the ceded premiums noted above. The agreement also accounts
for 60.9% or $6,553,398 of the total ceded benefits noted above.

    For the year ended December 31, 2007, the Company had taken reserve credits for ceded
business totaling $7,645,705. To the extent that reinsurance companies are unable to meet their
obligations relating to the reinsured business, the Company would remain liable.


                                  ACCOUNTS AND RECORDS
     The Company's general accounting records consisted of an automated general ledger and
various subsidiary ledgers (e.g., cash receipts, cash disbursements). Our review did not disclose
any significant deficiencies in these records. However, our review did disclose certain areas in
which the Company’s electronic data processing system controls could be improved. These
items are discussed in the “Comments and Recommendations” section of this Report, under the
caption “Management Information Systems Controls”.




                                               12
                              FINANCIAL STATEMENTS
   The following financial statements reflect the financial condition of the Company as of
December 31, 2007, as determined by this examination:
         STATEMENT                                                    PAGE(S)
         Balance Sheet:                                                  14
             Assets                                                      14
             Liabilities, Surplus and Other Funds                        15
         Summary of Operations                                           16
         Capital and Surplus Account                                     17
         Analysis of Examination Changes to Surplus                      19
         Comparative Financial Position of the Company                   20
    The accompanying Notes to Financial Statements are an integral part of these Financial
Statements.




                                             13
                                                            BALANCE SHEET
                                                               ASSETS

                                                                                    Nonadmitted        Net Admitted         Assets per
                                                                  Assets
                                                                                      Assets              Assets           Examination
Bonds                                                       $    321,150,424    $                  $     321,150,424   $     321,150,424
Preferred stocks                                                     421,850                                 421,850             421,850
Common stocks                                                     11,454,021                              11,454,021          11,454,021
Mortgage loans on real estate: First liens                        14,753,216                              14,753,216          14,753,216
Cash- ($4,148,384)
 cash equivalents- $43,184,146,
 short-term investments- $8,809,787                               47,845,549                              47,845,549          47,845,549
Contract loans                                                     1,332,587                               1,332,587           1,332,587
Investment income due and accrued                                  3,277,043                               3,277,043           3,277,043
Premiums and considerations:
  Uncollected premiums and agents' balances in the course
      of collection                                               14,077,840             459,437          13,618,403          13,618,403
  Deferred premiums, agents' balances and
     installments booked but deferred and not yet due              2,873,087                               2,873,087           2,873,087
Reinsurance:
  Amounts recoverable from reinsurers                              1,808,562                               1,808,562           1,808,562
  Funds held by or deposited with reinsured companies             28,678,476                              28,678,476          28,678,476
  Other amounts receivable under reinsurance contracts               274,601                                 274,601             274,601
Amounts receivable relating to uninsured plans                       193,538             193,356                 182                 182
Net deferred tax asset                                            16,121,475           5,971,475          10,150,000          10,150,000
Guaranty funds receivable or on deposit                               58,583                                  58,583              58,583
Electronic data processing equipment and software                    717,012                                 717,012             717,012
Furniture and equipment, including health care delivery            4,896,604           4,896,604                   0                   0
assets
Receivables from parent, subsidiaries and affiliates               3,020,051                               3,020,051           3,020,051
Health care and other amounts receivable                             426,736                                 426,736             426,736
Aggregate write-ins for other than invested assets                 2,303,361             761,201           1,542,160           1,542,160
                                                                                                                   0                   0
Total assets excluding Separate Accounts business                475,684,616          12,282,073         463,402,543         463,402,543


From Separate Accounts Statement (NOTE 1)                   $   3,594,631,975                      $   3,594,631,975   $    3,594,631,975

Total                                                       $   4,070,316,591   $     12,282,073   $   4,058,034,518   $    4,058,034,518
                        LIABILITIES, SURPLUS AND OTHER FUNDS


Aggregate reserve for life policies and contracts (NOTE 3)                $    209,067,906
Aggregate reserve for accident and health contracts (NOTE 3)                    29,532,904
Liability for deposit-type contracts                                             9,038,766
Contract claims:
  Life                                                                          23,030,983
  Accident and health                                                           42,682,470
Policyholders’ dividends due and unpaid                                            205,302
Provision for policyholders’ dividends and coupons payable in following
  calendar year – estimated amounts:
   Dividends apportioned for payment                                               309,940
   Dividends not yet apportioned                                                 6,800,592
Premiums and annuity considerations for life and accident and health
  contracts received in advance, including $205,404 accident and health
  premiums                                                                         699,850
Contract liabilities not included elsewhere:
  Other amounts payable on reinsurance                                            2,698,854
  Interest maintenance reserve                                                    1,979,380
Commissions to agents due or accrued                                                320,442
Commissions and expense allowances payable on reinsurance assumed                   541,103
General expenses due or accrued                                                   8,983,899
Transfers to Separate Accounts due or accrued                                    (2,187,111)
Taxes, licenses and fees due or accrued, excluding federal income taxes             776,327
Current federal and foreign income taxes                                           (132,669)
Amounts withheld or retained by company as agent or trustee                       1,099,376
Amounts held for agents’ account                                                      4,376
Remittances and items not allocated                                                 132,376
Miscellaneous liabilities:
   Asset valuation reserve                                                         427,866
   Funds held under reinsurance treaties with unauthorized reinsurers            3,825,368
   Liability for amounts held under uninsured plans                              2,664,375
Aggregate write-ins for liabilities                                              9,792,875

   Total Liabilities excluding Separate Accounts business                 $    352,295,550

From Separate Accounts Statement (NOTE 1)                                     3,579,534,876

   Total Liabilities                                                      $   3,931,830,426

Common capital stock                                                      $      3,578,700
Gross paid-in and contributed surplus (NOTE 5)                            $    141,056,801
Aggregate write-ins for special surplus funds                                      750,000
Unassigned funds (surplus)                                                     (19,181,409)

Surplus                                                                   $    122,625,392

   Total Capital and Surplus                                              $    126,204,092



                                                      15
Total Liabilities, Capital and Surplus        $   4,058,034,518




                                         16
                                     SUMMARY OF OPERATIONS


Premiums and annuity considerations for life and accident and health contracts                  $ 195,559,879
Net investment income                                                                              23,298,958
Amortization of interest maintenance reserve                                                          623,988
Commissions and expense allowances on reinsurance ceded                                             1,476,739
Reserve adjustments on reinsurance ceded                                                             (156,824)
Miscellaneous Income:
  Income from fees associated with investment management, administration and contract
    guarantees from Separate Accounts                                                               24,294,764
  Aggregate write-ins for miscellaneous income                                                       1,657,262

     Total Revenues                                                                             $ 246,754,766

Death benefits                                                                                  $   49,472,110
Matured endowments                                                                                      42,442
Annuity benefits                                                                                    20,741,414
Disability benefits and benefits under accident and health contracts                                91,615,165
Surrender benefits and withdrawals for life contracts                                                  527,860
Group conversions                                                                                        6,934
Interest and adjustments on contracts or deposit – type contract funds                               1,320,492
Payments on supplementary contracts with life contingencies                                             24,344
Increase in aggregate reserves for life and accident and health contracts                           (5,020,020)

     Total Benefits                                                                             $   158,670,741

Commissions on premiums, annuity considerations, and deposit-type contract funds                      2,569,155
Commissions and expense allowances on reinsurance assumed                                             3,334,280
General insurance expenses                                                                          74,722,235
Insurance taxes, licenses and fees, excluding federal income taxes                                    8,048,619
Increase in loading on deferred and uncollected premiums                                                (18,867)
Net transfers to or (from) Separate Accounts net of reinsurance                                      (5,219,967)
Aggregate write-ins for deductions (NOTE 4)                                                         16,666,666

     Totals Benefits and Expenses                                                               $    258,772,86
                                                                                                              2

Net loss from operations before dividends to policyholders and federal income taxes             $   (12,018,096)
Dividends to policyholders                                                                            4,862,310
Net loss from operations after dividends to policyholders and before federal income taxes       $   (16,880,406)
Federal and foreign income taxes incurred                                                              (398,404)

Net loss from operations after dividends to policyholders and federal income taxes and before
realized capital gains or (losses)                                                              $   (16,482,002)
Net realized capital gains (losses) less capital gains tax                                                    2

     Net loss (NOTE 4)                                                                          $   (16,482,000)




                                                        17
                                CAPITAL AND SURPLUS ACCOUNT
   Total Capital and Surplus as of December 31, 2002                                $    51,131,961

Net Loss, 2003                                                                          (61,479,569)
Change in net unrealized capital gains (losses)                                           5,638,881
Change in net deferred income tax                                                        31,568,207
Change in nonadmitted assets and related items                                          (24,603,440)
Change in reserve on account of change in valuation basis                                10,980,616
Change in asset valuation reserve                                                        16,048,862
Surplus adjustment:
  Paid in                                                                                34,056,801

Net change in capital and surplus for the year                                      $    12,210,358

   Total Capital and Surplus as of December 31, 2003                                $    63,342,319

Net income, 2004                                                                    $    16,757,416
Change in net unrealized capital gains or (losses)                                       (1,316,247)
Change in net deferred income tax                                                        (6,447,916)
Change in nonadmitted assets and related items                                            7,690,022
Change in reserve on account of change in valuation basis, (increase) or decrease         1,127,809
Change in asset valuation reserve                                                         7,122,578

Net change in capital and surplus for the year                                      $    24,933,662

   Total Capital and Surplus as of December 31, 2004                                $    88,275,981

Net income, 2005                                                                    $    47,223,631
Change in net unrealized capital gains or (losses)                                        2,766,941
Change in net deferred income tax                                                       (14,538,721)
Change in nonadmitted assets and related items                                           20,288,625
Change in asset valuation reserve                                                         4,498,311
Dividends to stockholders                                                                (8,800,000)

Net change in capital and surplus for the year                                      $    51,438,787

   Total Capital and Surplus as of December 31, 2005                                $   139,714,768

Net loss, 2006                                                                      $      (353,970)
Change in net unrealized capital gains or (losses)                                          706,232
Change in net deferred income tax                                                          (998,126)
Change in non-admitted assets and related items                                           1,183,627
Change in reserve on account of change in valuation basis, (increase) or decrease         4,259,876
Change in asset valuation reserve                                                          (156,099)
Dividends to stockholders                                                                (5,000,000)

Net change in capital and surplus for the year                                      $      (358,460)




                                                       18
                                             (Continued from previous page)

                   CAPITAL AND SURPLUS ACCOUNT (continued)
   Total Capital and Surplus as of December 31, 2006                               $   139,356,308

Net loss, 2007                                                                     $   (16,482,000)
Change in net unrealized capital gains or (losses)                                         760,292
Change in net deferred income tax                                                        1,780,811
Change in non-admitted assets and related items                                           (189,215)
Change in asset valuation reserve                                                         (119,203)
Surplus (contributed to) withdrawn from Separate Accounts during period (NOTE 2)       (14,000,000)

Other changes is surplus in Separate Accounts Statement (NOTE 2)                        15,097,099

Net change in capital and surplus for the year                                     $   (13,152,216)

   Total Capital and Surplus per examination, as of December 31, 2007              $   126,204,092




                                                       19
         ANALYSIS OF EXAMINATION CHANGES TO SURPLUS
There were no changes to the Company’s surplus as a result of our examination.




          COMPARATIVE FINANCIAL POSITION OF THE COMPANY
                                           20
       The comparative financial position of the Company for the five year period ended
    December 31, 2007 was as follows:

                               2007             2006            2005            2004             2003

Assets                    $   4,058,034,518 $ 3,496,021,007 $ 3,347,082,632 $ 3,084,501,426 $ 2,803,178,670

Liabilities                   3,931,830,426   3,356,664,699   3,207,367,864   2,996,225,445    2,739,836,351

Capital and S urplus           126,204,092     139,356,308      139,714,768      88,275,981      63,342,319

Premiums and Annuity
  Considerations               195,559,879     221,689,022      263,704,818     292,737,391     370,624,557

Net Investment Income           23,298,958      25,273,252       23,924,346      27,671,659      11,618,029

Net Income (Loss)              (16,482,000)       (353,970)      47,223,631      16,757,416     (61,479,569)



   Note:      Amounts in the preceding financial statements for the years ended December 31,
              2003, 2004, 2005 and 2006, were taken from the Company’s Annual Statements
              as filed with the Administration. Amounts for the year ended December 31, 2007
              are amounts per examination.




                                                       21
                  NOTES TO FINANCIAL STATEMENTS

1) The Company maintains Separate Account assets and liabilities, representing net
   deposits and accumulated net investment earnings, less fees, held primarily for the
   benefit of group pension contract holders. The funds, consisting primarily of
   publicly traded long-term bonds, stocks and short-term investments, mortgages
   and real estate, are reported at estimated fair market values and are administered
   separately from the Company’s general account. The contract holder, rather than
   the Company, bears the investment risk. Separate Account contract holders have
   no claim against the general account of the Company. The contracts between the
   Company and the participating unions were reviewed to ensure that the
   agreements indicated that the investment risk was retained by the contract holder.
   It should be noted that one of the funds held in the Separate Account Statement
   bears significant investment risk. Separate Account Fund "J", also known as "J
   for Jobs" consists primarily of commercial mortgage loans that are used to fund
   various union construction projects throughout the United States. Fund J holds in
   excess of $2.8 billion in mortgage loans held at fair value. As noted above, this
   risk is retained by the contract holders and any associated losses would not impact
   the Company's general account.

2) During 2007, the Company made a $14,000,000 contribution in seed money to the
   Separate Accounts. The Company recorded this transaction through the equity
   section of the balance sheet, which is not in conflict with the Statements on
   Statutory Account Principles (SSAP). As of December 31, 2007 the Company
   reported this investment in the Separate Accounts at fair value in the amount of
   $15,097,099, which includes unrealized gains amounting to $1,097,099. The
   unrealized gain on this seed money was incorrectly excluded from the surplus
   account of the Separate Account statement, as is required by SSAP #56. See
   further comments regarding this condition in the “Comments and
   Recommendations” section of this Report under the caption “Separate Accounts
   Statement”.

3) The methodologies utilized by the Company to compute it’s “Aggregate reserve
   for life contracts” and it’s “Aggregate reserve for accident and health contracts”,
   and the adequacy of the reserves as of December 31, 2007, were reviewed by our
   actuaries. The Company reported Aggregate reserves for life policies and
   contracts totaling $209,067,906. These amounts represent management’s best
   estimate of all future policy obligations under its life policies and contracts in
   force as of December 31, 2007 in accordance with current reserving standards.
   The estimated amounts are net of reserves ceded under certain reinsurance
   agreements. If the reinsurers are not able to meet their obligations under these
   agreements, the Company would be ultimately liable for any defaulted amounts.
   Estimated amount of ceded in force at year end was $126,661,917. The reserve
   credit taken as of December 31, 2007 amounted to $785,371. The methodologies
   and assumptions utilized by the Company to compute reserves as of December


                                       22
   31, 2007, were reviewed by our actuaries and were determined to be reasonable
   and adequate.

   The Company reported “Aggregate reserves for accident & health contracts”
   totaling $29,532,904. These amounts represent management’s best estimate of all
   future policy obligations under its accident and health contracts in force as of
   December 31, 2007 in accordance with current reserving standards. The
   estimated amounts are net of reserves ceded under certain reinsurance
   agreements. If the reinsurers are not able to meet their obligations under these
   agreements, the Company would be ultimately liable for any defaulted amounts.
   The reserve credit taken as of December 31, 2007 amounted to $6,860,334. The
   Company also received the benefit of ceded unearned premiums totaling
   $3,114,819. The methodologies and assumptions utilized by the Company to
   compute reserves as of December 31, 2007, were reviewed by our actuaries, who
   determined the Company’s accident and health reserves to be reasonable and
   adequate. During the course of their review, our actuaries noted certain issues
   relating to the Company’s reserving process related to the “Aggregate reserves for
   accident & health contracts”. Please see the “Comments and Recommendations”
   section of this Report for additional details.
4) In 2002, the Department of Labor Employee Benefits Security Administration
   (DOL) began an investigation of the ULLICO Inc. Pension Plan and the Zenith
   Administrators, Inc. Pension Plan (the Plans). The investigation eventually
   extended to the Company. The investigation focused on the provision of
   investment and other services to the Plans by the Company, as well as on the fee
   arrangements for Separate Account J. On November 19, 2007 the Company
   reached an agreement with the DOL to resolve the investigation and pursuant to a
   consent decree entered by the U.S. District Court for the District of Columbia, the
   DOL released potential claims against the Company in exchange for a payment
   from Union Labor Life in the amount of $20 million. Of that amount,
   approximately $16.7 million was returned to the investors of Separate Account J
   (prior to December 31, 2007). The remaining $3.3 million has been reserved for
   excise tax and required ERISA payments. The Company also agreed to
   implement a new, simplified fee structure related to the Company’s management
   of Separate Account J. The Company properly included a liability on its balance
   sheet for this payable amount as part of Aggregate Write-Ins for Liabilities. The
   Company was not required to admit that any fees examined by the DOL were
   unlawful or that the Company acted in violation of the law in any way.
5) During the examination period “Gross paid-in and contributed surplus” increased
   by $34,056,801 as a result of contributions made by the Company’s parent,
   ULLICO Inc. All of these funds were contributed during 2003.




                COMMENTS AND RECOMMENDATIONS

                                       23
Board Minutes:

     We reviewed the minutes of the Board of Directors meetings for the period under
examination. Based on our review, the minutes did not document the board’s review and
approval of certain significant events. Specifically, certain issues brought up in board of
directors meetings were sent into executive session and not adequately documented in the
board minutes as to whether or not there were adequate resolutions. We recommend the
minutes of the Board of Directors’ meetings clearly document the resolution of all
significant issues discussed at the meetings.

Separate Accounts Statement

     During 2007, the Company contributed $14,000,000 in seed money to a fund within
the Separate Account statement. As of December 31, 2007 the Company reported an
unrealized gain on this seed money, which was invested as described above in NOTE 2
of the Notes to Financial Statements. The unrealized gain totaled $1,097,099. The
unrealized gain on this seed money was incorrectly excluded from the surplus account of
the Separate Account statement, which is in violation of SSAP #56. SSAP #56 requires
that all contributed seed money and all gains on contributed seed money are to be held in
the surplus account of the Separate Account statement until such time as they are
returned to the General Account. We recommend that the Company comply with
SSAP #56 by reporting all gains on seed money contributed from the General
Account to the Separate Account, in the surplus account of the Separate Account
statement until such time as it is returned to the General Account.

Custodial Arrangements:

     Code of Maryland Regulation 31.04.09 provides that domestic insurance companies
may have bonds or stocks registered in the names of nominees and deposited in a
depository trust company approved by the Commissioner if a custody agreement with a
bank or trust company, meeting certain requirements, is filed with the Administration for
approval. The Regulation further provides that insurance companies failing to comply
with this requirement shall report securities held under non-approved custodial
arrangements as “Assets-Not Admitted”.

     Our examination disclosed that as of December 31, 2007, the Company owned
securities "pledged as collateral" in the amount of $4,710,000 which were not held
by financial institutions within an approved custodial agreement. It was determined the
amount involved two securities, one with a par value of $4,100,000, related to a
reinsurance agreement and the other with a par value of $610,000, related to the lease for
its home offices both registered and held under a non-approved custodian’s nominee
name. We brought this condition to the Company’s attention during the course of the
examination. Subsequently, the Company obtained and submitted custodial agreements
that have now been approved by the Administration. Given that the applicable securities
are now held with approved custodians, no financial adjustment will be made. However,

                                            24
we recommend that in the future, the Company strictly comply with the
aforementioned provisions of the Code of Maryland Regulations.

Accident & Health Actuarial Review:

    The Company reported “Aggregate Reserves for Accident and Health Contracts” and
“Accident and Health Contract Claims” in the amount of $29,532,904 and $42,682,470,
respectively. These amounts represented the actuarially determined value of all claims
that had been incurred but still unpaid or incurred but not reported as of December 31,
2007. The methodologies utilized by the Company to compute these amounts and the
adequacy of these amounts as of December 31, 2007 were reviewed by our actuary and
were determined to be reasonable and adequate. However, our actuaries noted certain
instances where methodologies and actuarial assumptions are in need of improvement
(e.g. the Company assumed large rate increases associated with their Medicare Supplement
Business in their gross premium valuation, however they did not include a provision for
increased policy terminations, which are typically associated with large or multiple rate
increases). We recommend that the Company correct existing methodologies and
actuarial assumptions that the examination’s actuary identified as in need of
improvement and utilize them in future reserve projections.

Management Information Systems Controls:

    The Company uses an electronic data processing system to process the majority of its
critical applications. These include the general ledger, premium processing, claims
processing functions and the reserve systems. Our examination included a review and
evaluation of the general and security access procedures and controls in place over the
Company’s system. In this regard, we noted that the Company had not developed a
business continuity plan to be utilized in the event of a major disaster that could disrupt
its computer operations. Such a plan would address areas not specifically included in the
disaster recovery plan such as alternate processing facilities in the event that the current
processing center is unavailable for use, procedures for manual processing of non-
automated or less critical business functions, alternate facilities in the event that the home
office was unavailable for use, and procurement of other items not included in the
disaster recovery plan. The lack of a business continuity plan presents the risk that the
Company may be unable to effectively restore certain operating functions on a timely
basis in the event of a disaster. We recommend that the Company develop and
maintain a business continuity plan covering areas not specifically included in its
disaster recovery plan. Furthermore, we recommend that these plans be
periodically tested (e.g., annually) and communicated with all related parties to
assure that they are current and functioning as intended.




                                             25
Additional Comments and Recommendations:

   In addition to the above Comments and Recommendations, during our examination,
we made a number of other suggestions and recommendations to the Company with
regard to record keeping and other procedures relating to its operations.




                                       26
                         SUBSEQUENT EVENTS

1) Mortgage-backed Securities:

   In September 2008 the Federal Government placed Fannie Mae and Freddie Mac
   into conservatorship due to the collapse of the sub-prime mortgage market. At
   the time of the collapse, the Company owned Fannie Mae preferred stock. The
   stock was impaired in the third quarter of 2008. As a result of the impairment, the
   Company incurred a $2.2 million realized loss. The Company’s 2008 interim
   financial statements were reviewed by the examiners for the possibility of
   additional related losses and our review disclosed nothing that would indicate the
   potential for additional losses.

2) 2008 Financial Results:

   Through September 30, 2008, the Company reported positive results from
   operations that have resulted in a net increase in surplus amounting to $9.5
   million on net income of $4.8 million. Also contributing to the increase in
   surplus was a significant decrease in non-admitted assets resulting from a
   decrease in the non-admitted portion of the Company’s net deferred tax asset. We
   reviewed the entries related to the change in the non-admitted portion of the net
   deferred tax asset that occurred in 2008. Our review noted that the change is in
   compliance with SSAP No. 10, paragraphs 5 – 11 of the NAIC’s Accounting
   Practices and Procedures Manual.




                                       27
                                    CONCLUSION

   Our examination disclosed that as of December 31, 2007 the Company had:

       Admitted Assets                                             $ 4,058,034,518

       Liabilities and Reserves                                    $ 3,931,830,426

       Common Capital Stock                                        $     3,578,700

       Gross Paid-In and Contributed Surplus                           141,056,801

       Aggregate Write-Ins for Special Surplus Funds                      750,000

       Unassigned Funds (Surplus)                                      (19,181,409)

       Total Capital and Surplus                               $       126,204,092

       Total Liabilities, Capital and Surplus                      $ 4,058,034,518

    Based on our review, the accompanying balance sheet properly presents the statutory
financial position of the Company at December 31, 2007, and the accompanying
statement of income properly presents the statutory results of operations for the period
then ended. The supporting financial statements properly present the information
prescribed by the Annotated Code of Maryland, the Code of Maryland Regulations and
the National Association of Insurance Commissioners.
   Title 4 of the Insurance Article of the Annotated Code of Maryland specifies the
minimum level of capital and surplus required for the Company. We concluded that the
Company’s capital and surplus funds exceeded the minimum requirements as of
December 31, 2007.




                                            28
                                   SIGNATURES
    In addition to the undersigned, the following examiners representing the Maryland
Insurance Administration participated in certain phases of this examination:
       George P. Hutschenreuter, CFE, Maryland Insurance Administration
       Purushrotem Shrestha, Maryland Insurance Administration
       Stephen Georgie, Maryland Insurance Administration
       Jack Rucidlo, CFE, INS Regulatory Insurance Services
       James M. Perkins, CFE, INS Regulatory Insurance Services

   The actuarial portions of this examination were completed by Robert H. Katz and
Robert Stolte of the Office of the Chief Actuary of the Maryland Insurance
Administration, and Michael Mayberry, F.S.A., M.A.A.A., of Lewis & Ellis, Inc.


                                          Respectfully submitted,

                                          Original Signature on File
                                          ___________________________
                                          Gregg S. Bealuk, CFE
                                          Examiner-In-Charge
                                          INS Regulatory Insurance Services,
                                          Representing      the    Maryland
                                          Insurance Administration




                                          Under the Supervision of,

                                          Original Signature on File
                                          ____________________________
                                          Donald A. Crawley, CFE
                                          Assistant Chief Examiner
                                          Maryland Insurance Administration
                                          Representing the Northeastern Zone




                                         29
MARTIN O’MALLEY                                                                    RALPH S. TYLER
    Governor                                                                        Commissioner

ANTHONY G. BROWN                                                                 ELIZABETH SAMMIS
    Lt. Governor                                                                  Deputy Commissioner

                                                                                  LESTER C. SCHOTT
                                                                                 Associate Commissioner
                                                                                Examination and Auditing

                           525 St. Paul Place, Baltimore, Maryland 21202-2272
                             Direct Dial: 410-468-2120 Fax: 410-468-2101
                                Email: dpalmer@mdinsurance.state.md.us
                                 1-800-492-6116 TTY: 1-800-735-2258
                                      www.mdinsurance.state.md.us

                                        February 10, 2009

    Mark E. Singleton
    President
    Union Labor Life Insurance Company
    1625 Eye Street, N.W.
    Washington, DC. 20006

    Dear Mr. Singleton:

        Enclosed is a draft copy of the Report on Examination of the affairs and financial
    condition of Union Labor Life Insurance Company, as of December 31, 2007, dated
    December 16, 2008. Please call our attention to any errors or omissions.

         Unless a written request for a Hearing with respect to the Report (in accordance with
    the provisions of Sections 2-209 and 2-210, Insurance Article of the Annotated Code of
    Maryland) is received on or before March 12, 2009, the Report will become final, and
    will be filed as a public document within this Administration.

        The Report on Examination contains a section entitled “Comments and
    Recommendations” that discloses certain areas requiring action. Please submit a
    statement covering the corrective measures which will be taken.

        If the Company’s position on any of these points is contrary to the Examiner’s
    findings, an explanation should be submitted covering each contested comment and/or
    recommendation.

        All of your comments concerning these matters must be in writing and shall be
    furnished to this Administration within thirty (30) days from the date of this letter
    (March 12, 2009). In addition to the hard copy mailed to the Administration, also
    please send our response electronically in Microsoft Word format to
    pgiles@mdinsurance.state.md.us.

        The Report on Examination should be called to the attention of your Board of
    Directors at its next meeting. Each Director should review the Report and acknowledge
such review over his signature. Documentation of such review should be maintained for
future verification.

    If you have any questions or if you would like to discuss these recommendations,
please do not hesitate to call me at 410-468-2120.

                                                 Sincerely,

                                                 Original Signature on File

                                                 David Palmer, CFE
                                                 Chief Examiner
February 20, 2009



David Palmer, CFE
Chief Examiner
Maryland Insurance Administration (MIA)
525 St Paul Place
Baltimore, Maryland 2102-2272


RE: Response to the recommendations on the Report of Examination of the affairs and
    Financial condition of the Union Labor Life Insurance Company

Dear Mr. Palmer,


Below are our responses to the MIA’s comments and recommendations;


Board Minutes:

Management agrees with the recommendation. The minutes of the meetings of the Board
of Directors will clearly document Board approval of all significant transactions and
events.

Separate Accounts Statement

Management agrees with the recommendation and will comply with SSAP #56. The
reclassification is reflected in the “green book” in 2008 Annual Statement.

Custodial Agreement

Management agrees with the recommendation and will strictly comply with the
mentioned provisions of the Code of Maryland Regulation.

Accident & Health Actuarial Review

Management agrees with the recommendation and will correct existing methodologies
and actuarial assumptions where appropriate and will utilize the methodologies in future
reserve projections.




                                            1
Management Information Systems and Controls:


Management agrees with the recommendation. ULLICO Inc. the parent company and its
subsidiaries have completed an assessment of the business continuity needs within the
organization and will be developing comprehensive continuity plans in 2009.




Other Comments and Recommendations

Management has taken into consideration all of the other comments and
recommendations given by the MIA not published in this report.


Finally, Mr. Gasque’s title as of December 31, 2007 was Acting CFO and Treasurer, not
Asst. Treasurer.

On behalf of Union Labor management and the finance staff, we would like to thank the
MIA for their support as we worked through all of the issues from the last exam. This
report is a testament to the strong working relationship between the current management
team and the MIA.



Sincerely,

Original Signature on File

Mark E. Singleton, Chairman & CEO
Union Labor Life Insurance Co.




                                           2
MARTIN O’MALLEY                                                                            RALPH S. TYLER
    Governor                                                                                Commissioner

ANTHONY G. BROWN                                                                           BETH SAMMIS
    Lt. Governor                                                                         Deputy Commissioner

                                                                                          LESTER C. SCHOTT
                                                                                         Associate Commissioner
                                                                                        Examination and Auditing

                           525 St. Paul Place, Baltimore, Maryland 21202-2272
                             Direct Dial: 410-468-2120 Fax: 410-468-2101
                                Email: dpalmer@mdinsurance.state.md.us
                                 1-800-492-6116 TTY: 1-800-735-2258
                                      www.mdinsurance.state.md.us

                                          March 3, 2009


    Mark E. Singleton
    President
    Union Labor Life Insurance Company
    1625 Eye Street, N.W.
    Washington, DC. 20006

    Dear Mr. Singleton:

         We are in receipt of your letter, dated January 15, 2009, which addresses the
    corrective action taken by the Union Labor Life Insurance Company, to comply with
    the recommendations made in the Report on Examination as of December 31, 2007,
    dated December 16, 2008. Your response adequately addresses the recommendations
    made in the Report.

         During our next examination of the Company, we will review the implementation of
    the corrective actions taken.

         As the February 20, 2009 letter did not request a hearing, pursuant to § 2-209 of the
    Insurance Article, Annotated Code of Maryland, the Report is Final and is attached for
    your records. The Report will be forwarded electronically, along with a copy of this
    letter, to each Commissioner whose name is set forth on Page 1 of the Report, as well as
    to each of the participating zone examiners, to the National Association of Insurance
    Commissioners, and to each state in which the Company is licensed, according to your
    Annual Statement.

                                                           Sincerely,

                                                           Original Signature on File

                                                           David A. Palmer, CFE
                                                           Chief Examiner

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:13
posted:7/3/2012
language:
pages:36