Communication with Royal Skandia 3 December

Communication with Royal Skandia 3 December

Email from Royal Skandia 18 November 2008:

Thank you for your email dated 7 November 2008.

We have communicated and will continue to communicate directly with our
policyholders regarding this issue. Our website has up to date
information on this, including a Q&A which answer a number of your
questions and links to other relevant websites. Together with the Manx
Insurance Association we are lobbying the Isle of Man Government on
behalf of investors to seek clarification and to ensure policyholder
interests are represented. Royal Skandia is seeking the best outcome for
its customers which it hopes will include the recovery of these assets.

Regards

Mark Halewood
General Manager

KSFIOM Response 20 November:

Thank you for your email received 17 November. Unfortunately it fails to address any of the issues raised in our email of 7 November to you and it is disappointing to say the least that it took 10 days to acknowledge bondholders' concerns and yet still failed to provide little more than a grudging acknowlegment of the situation they find themselves in through no fault of their own. The trade press media has been very keen to find out what life offices have been saying to us. As an industry, the offshore bond sector must realise the dreadful situation bondholders find themselves in, the amounts of money at stake that represent people's future livelihoods and the support that we as a group have been providing to bondholders in the absense of anything more concrete or viable being forthcoming from the life companies themselves.

Perhaps you could review the original correspondence and let us know if there is anything further you can add at this time to answer the queries raised.

yours sincerely

KSFIOM Depositors Action Group

From: RSK FM Customer Helpdesk
Date: Wed, Dec 3, 2008 at 12:59 PM
Subject: Privileged - Kaupthing Singer & Friedlander (Isle of Man)
To: ksfiompress(?)googlemail [dot] com

Thank you for your recent email; we have updated our response following the Liquidator's meeting on Thursday.

Communication

We remain committed to communicating directly with policyholders. We have written to our policyholders on three occasions, 15th and 28th October 2008 and 27th November, via email and/or letter to outline the situation. On each of these occasions we reiterated that our priority is to work on behalf of policyholders to provide clarity and certainty with regards to the funds invested in Kaupthing Singer & Friedlander (IOM) Limited (KSF). As you are also no doubt aware we set up a helpdesk phone number and email address for enquiries from policyholders and have provided regular updates on our website, along with addresses for other useful websites. We have recently added a Q&A document to our website following the Liquidators meeting. All of our communications have also been sent to the advisers and brokers of those affected policyholders.

In addition to direct communications we have been lobbying the KSF liquidators as well as the Isle of Man regulators, authorities and related industry bodies, on behalf of policyholders. Royal Skandia alongside the Manx Insurance Authority petitioned the court for a deferral in liquidation proceedings until 27th November and further supported the second deferral until 26 January 2008. We believe this will give the relevant Governments and interested parties more time to reach an agreement on the release of funds which would benefit depositors equally. We attended both the initial meeting and the meeting on 27 November, after which we updated our website to ensure swift and informative communication with policyholders, advisers and brokers.

Responsibility

Royal Skandia offers a unit-linked environment in which the customer can house a portfolio which invests in a very wide range of assets. We don't advise on the underlying investments and it is up to the customer and their financial adviser to agree on the appropriateness of the underlying assets as they would with any other type of investment. There is no endorsement of the types of asset that can be held within our bond. We do not offer any advice, guidance or any due diligence, nor do we have a "selected panel". In the same way that we do not provide information on the parent companies of individual equities or funds that investors can hold via our product we do not provide information on the parent companies of deposit taking banks.

That said, we fully understand the concerns of our customers and their advisers. Recent events could not have been foreseen and go against previously sound investment theory. We continue to do everything we can to get a good result for our customers and will keep them informed of progress.

Contractual Obligation

Cash deposit contracts vary from instant access to fixed term contracts ranging from 1 week to 5 years and it is the decision of the policyholder, together with the adviser to choose which contract (and the terms of that contract)

Time to Act

We appreciate that this is a very difficult and distressing time for policyholders. We can assure you that we do take our responsibilities seriously and that we are seeking the best outcome for our policyholders.

Yours faithfully

Mark Halewood

General Manager

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