Our life sales are up 34 percent, our financial position is strong, and we have made dramatic improvements in how we handle new business and underwriting.

Today I want to share with you how we are doing – and I want to thank you for all that you do for National Life Group.

You are a major contributor to our success!

Our financial strength remains strong. We have just completed our annual meetings with the rating agencies. These sessions really put us, our company, and our financial and operational plans under a microscope. I am very pleased with the positive feedback we have received.

A.M. Best, in upholding our rating of A (Excellent), cited National Life’s “competitive positions in its niche markets (fixed indexed life insurance and annuities), profitable operations, conservative risk profile and diverse distribution channels.”

A.M. Best’s report said:

• “Despite difficult economic conditions, National Life continues to deliver solid business growth.”
• “Aside from 2008, National Life’s capitalization has improved steadily over the last five years.”

Standard & Poor’s singled out as strengths our conservative, long-term approach to product design and our diversified product offering. S&P describes our investment portfolio as high quality and says our competitive position is strong.

Moody’s noted as a positive our growing independent distribution, saying, “National Life has been improving the productivity and cost effectiveness of its career distribution channel; it has also been developing its Independent Agents channel through building relationships with a growing number of independent agents. As a result, management has experienced strong growth recently in fixed and indexed life insurance, as well as in indexed annuity sales to middle- and upper income customers.”

Sales have been strong in the first six months. Thank you for all that you have done to make the first half of this year such a success. I am especially pleased with the life sales results. Submitted life applications are up 16 percent over last year and life sales are up 34 percent. Overall sales are up 15 percent, thanks to the strong life production and a 51 percent increase in mutual fund sales. Annuity sales are off 27 percent but that reflects a conscious decision not to chase the market in a low interest rate environment.

I am especially proud of the improvements we have made in handling new business and underwriting. I know that speed matters. Our new large-case and fast-track teams have made a dramatic difference in turnaround times.

We are making major investments in technology – many of which are designed to make it easier for you to do business with us. Our new website is under construction and will make it much easier for you to track business, check commissions, find forms and generate reports. A single login will simplify your ability to navigate.

We took a leadership role in lobbying to overturn the action of the Securities and Exchange Commission to regulate equity indexed annuities. National Life Group was a founding member of the industry coalition that successfully challenged SEC rule 151A in court and in the Congress. This win clears away the uncertainty over regulation and licensing that our industry has faced for the past two years.

I am pleased with where we are at the midpoint of 2010 – and I am very excited about where we are going.

We have a proud history of 161 years. With your help our best days are yet to come.

Thank you for what you do for National Life Group.

Cheers,

Mehran Assadi
President and CEO
National Life Group