STATE OF NEW YORK INSURANCE DEPARTMENT REPORT ON EXAMINATION OF THE FIRST FORTIS LIFE INSURANCE COMPANY AS OF DECEMBER 31, 2002

D The Company violated Section 3234(b)(3) of the New York Insurance Law by failing to include an identification of the service for which the claim was made on its explanation

On November 30, 1997, the Company entered into an asset purchase and sale agreement, an indemnity reinsurance agreement, an assumption reinsurance agreement, a trust agreement, and

The Company violated Section 4228(e)(9)(B) of the New York Insurance Law by issuing a loan to an agent exceeding the expected compensation of the agent over the next 12 months. This

60 by not: requiring proof of receipt by the applicant of the Important Notice and the completed Disclosure Statements and by not examining the Disclosure Statements to ascertain

The Company violated Section 403(d) of the New York Insurance Law by failing to include the required fraud warning statement in its application and claim forms.. Section

The Company violated Section 1202(b)(2) of the New York Insurance Law by not having their independent committee nominate candidates for director for election by shareholders

A The Company violated Section 403(d) of the New York Insurance Law by failing to include the fraud warning on its Group Life claim forms.. Respectfully submitted, /s/.

A review of a sample of the Company’s credit life, credit disability and annuity claim files revealed that the Company maintains its files as required by Department Regulation No. J