National Life Group Reports Record Earnings; Net Income Exceeds $100 Million for First Time

(March 7, 2007) Montpelier, VT — National Life Group achieved strong financial results in 2006, management has reported, establishing records in total earnings, total assets and total equity.

Net income on a consolidated basis increased $13.1 million, or 13 percent, to $110.6 million in 2006 from $97.5 million in 2005. The increase was primarily due to strong investment performance and growth in business in force.

While overall sales were down 8 percent in 2006, life insurance sales were up 20 percent. Sales of annuities and Sentinel funds were both off for the year. The strong sales in life insurance stemmed in large part from the successful introduction of new indexed universal life and whole life products and the addition of several new independent distribution organizations.

As of Dec. 31, 2006, National Life Group had $19.3 billion of assets under management and served more than 700,000 customers. About $13 billion was attributable to life insurance and annuity account values under management with more than 500,000 policy and contract holders. Approximately $4 billion was attributable to mutual fund and client managed assets, representing more than 225,000 customers.

The company’s total equity rose 8.4 percent to $1.4 billion.

“Profitability was very strong for the fourth consecutive year,” said National Life Group Chairman and CEO Thomas H. MacLeay. “We have a solid and diverse portfolio of products and services that help our customers meet their financial goals.”

National Life Group is made up of the flagship company, National Life Insurance Company, founded in Montpelier in 1850, Sentinel Asset Management Inc., Equity Services, Inc., and Life Insurance Company of the Southwest of Dallas, Texas. In 2006, the Group sold American Guaranty and Trust Company to Royal Bank of Canada.