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DTCC Releases November Report On Annuity Product Activity

New York, January 4, 2012 - The Depository Trust & Clearing Corporation (DTCC) Insurance & Retirement Services (I&RS) released today November reports on activity in the market for annuity products from its award-winning Analytic Reporting for Annuities online information service, which is based on the transactions that DTCC processes for the industry. Analytic Reporting for Annuities is a service offering of National Securities Clearing Corporation, a DTCC subsidiary.

The charts for this release can be viewed at http://www.dtcc.com/news/press/releases/2012/nov.pdf.

According to DTCC I&RS:

• Inflows for all annuity types processed in November declined by 4.6%, or over $330 million, to $6.9 billion from $7.2 billion in October.
• Subtracting out flows from inflows, net cash flows decreased by 18%, or over $400 million, to $1.9 billion from over $2.3 billion in October.
• The top 10 insurance companies accounted for over 69% of all inflows processed in November.
• Five hundred forty five (545) annuity products saw positive net flows in November, while 2,231 annuity products saw negative net flows, where the amount redeemed exceeded the amount invested.
• The overall trend in inflows has been slightly down for the year, while the trend in net flows has been slightly up.

Transactions processed by DTCC show an increasing percentage of inflows being directed into IRA accounts and a decreasing percentage of inflows directed into non-qualified accounts.

Net cash flows (subtracting out flows from inflows) reflect the greater persistence, or “stickiness” of investments into qualified plan accounts. Regular IRA accounts took the lion's share of positive net flows in November with over 81%, 401k plans attracted almost 12% of net flows, while non-qualified accounts attracted only slightly less than 3% of net flows.

“In a year that has seen significant product changes from many of the leading providers, it’s interesting to analyze the effect of these changes: specifically, the impact of announcing and implementing changes, and ultimately, the effect in the months that follow. These are just a few of the questions that can be answered with Analytic Reporting for Annuities from DTCC,” said Tom Pistole, former Vice President and Divisional Sales Manager at Sun Life Financial, who is a DTCC consultant.

Since the beginning of the year, 81% of positive net flows have gone into regular IRA accounts, 12% have gone into 401k accounts, 3% have gone into non-qualified accounts, and 4% have gone into other account types.

DTCC-RIIA Agreement
In August 2011, DTCCjoined forces with the Retirement Income Industry Association (RIIA) to analyze cash flows by RIIA-defined broker/dealer distribution channels and product categories. For the six channels defined by RIIA, the following are the percentages of inflows processed by the I&RS in November:

• Independent broker/dealers – 30%
• Wirehouses – 18%
• Regional broker/dealers – 15%
• Bank broker/dealers – 14%
• Insurance broker/dealers – 8%
• Others – 17%

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About DTCC

DTCC, through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC's depository provides custody and asset servicing for more than 3.6 million securities issues from the United States and 121 other countries and territories, valued at US$36.5 trillion. In 2010, DTCC settled nearly US$1.66 quadrillion in securities transactions. DTCC has operating facilities and data centers in multiple locations in the United States and overseas. For more information, please visit www.dtcc.com.

About Analytic Reporting

Analytic Reporting for Annuities is an award winning online information solution containing aggregated data from transactions processed by the I&RS of DTCC. I&RS is the central messaging connection for annuity and life insurance transactions, enabling insurance companies to provide broker/dealers with daily financial transaction information. I&RS processes approximately 150 million transactions each month.

Because Analytic Reporting is based on processed transactions, not surveyed data, Analytic Reporting gives DTCC customers a unique and unprecedented view of their own business as well as the market for annuity products so that they can discover key trends and identify opportunities. With updates approximately two weeks after each month-end, Analytic Reporting allows users to assess their business and access industry intelligence to support management decisions about sales, sales management, marketing and product offerings. Analytic Reporting is a hosted turnkey solution, available online anywhere, anytime to DTCC customers. DTCC customers don't have to store or manage the data. They don't have to develop applications or run SQL queries to obtain the business information they rely on for decision-making.

See DTCC’s web site at http://www.dtcc.com/analytics for more information about the service.