FOREWORD

We are pleased to offer Wholesaler Group Size & Compensation: Variable Annuities, one in a series of product-specific surveys. It is designed to provide reliable and comprehensive information supporting the marketing strategies unique to the distribution of variable annuity products through financial intermediaries.

DGL Consultants wishes to express our appreciation to those industry professionals whose time, effort and expertise helped to ensure that the comparisons in this report address the need for relevant wholesaler compensation data by the Variable Annuity Industry.

We had three primary goals in completing this report, which required the accumulation of data that was sufficiently detailed, so as to be meaningful. First, we wanted to collect the most timely compensation data. Second, we wanted to measure the size of the sales force. And third, we wanted to evaluate the size of the sales force and compensation relative to distribution channels. We believe that this report achieves its goals by providing reliable sales force and compensation benchmarks for the variable annuity wholesaler position.

This report is designed to provide you with the analysis needed to gauge your company's wholesaler pay levels against industry peers. It is not a replacement to our Annual Sales Compensation Survey, but rather a supplemental source of information that benchmarks the relationship of compensation relative to distribution channel and wholesaler group scale.

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EXECUTIVE SUMMARY

Wholesaler Group Size & Compensation: Variable Annuities survey results are based on the responses of over 100 participants, representing 30 Variable Annuity Companies divided into three sales force size peer groups.

Profile of Respondents
The survey, designed as a national field and telephone survey, is administered during January and February of the current year. In general, survey respondents consist of Wholesalers, Divisional and National Sales Managers. Multiple participants within the same company are directly contacted in order to verify responses to survey questions. Participants are asked to provide total compensation information for (base compensation plus incentive commission and/or bonus) including the earnings of top, average and low performing Wholesalers. The deliberate nature of this methodology, combined with the number of respondents, ensures that the research results are highly reliable.

Sales Force Size and Compensation Levels
This report includes data specific to the Wholesaler position. Compensation data is calculated to provide benchmark pay levels — Average, Median, 25th Percentile and 75th Percentile. In addition, data is further segmented in comparison to size of the sales force and by distribution channel.

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SAMPLE DATA

Data below shows that total cash levels widened relative to the Median as the 25th Percentile decreased by -0.6%, from $123,900 to $123,100 and the 75th Percentile increased by 4.9%, from $254,000 to $266,500.