Exhibit 1, Part 1/Part2

[SYA-AH]

I actually have 2 questions regarding Exhibit 1.

First, does anyone know the reason why the NAIC breaks premium out by First Year and Renewal? Is it possibly just an informational look at how each company is performing?

Second, for each LOB commission split, they can be broken out by first year, single, and renewal. For our BOLI commissions, we have been reporting as single, but they could be classified as renewal. BOLI business is kind of a single sum premium business, but since our BOLI was issued a long time ago, would it be more appropriate to classify as renewal?

[Russ]

Simple answer to your first question regarding the reporting requirement for first year and renewal premiums is that it is required per SSAP 51R. Paragraph 5 states ?Premiums shall be recognized as income on the gross basis (amount charged to the policyholder) when due from policyholders under the terms of the insurance contract. As a result, premium income shall include first year and renewal premiums,??.
I cannot find any specific guidance on how commission should be reported to BOLI contracts but I would offer that the commission paid in the new the policy is issued would be reported on the Single line and subsequent years? commission on the BOLI contracts should be reported in the Renewal line.

[Booke_Question]

Should companies report A&H premiums between first year and renewal year for A&H premiums? Do you know if there is some reference in SSAP 54R or elsewhere in the APP manual?

Thanks.