Sovereign Life Assurance Company v Dodd

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

NEW SOUTH WALES DISTRICT REGISTRY NSD 1125 OF 2005

IN THE MATTER OF NRG LONDON REINSURANCE COMPANY LIMITED AND NRG VICTORY AUSTRALIA LIMITED AND THE CORPORATIONS ACT 2001

NRG LONDON REINSURANCE COMPANY LIMITED (ABN 77 001 160 792)

NRG LONDON REINSURANCE COMPANY LIMITED (ABN 47 002 971 477)

INTRODUCTION 1 The plaintiffs ("the Scheme Companies") apply for orders pursuant to s 411(1) of the Corporations Act 2001 (Cth) ("the Corporations Act") that meetings of their respective creditors be convened for the purpose of considering and, if thought fit, approving schemes of arrangement between them and those creditors. They also seek an order approving the form of the Explanatory Statement for the schemes, and providing for the manner in which the meetings are to be held. 2 The Scheme Companies are insurance companies. Their businesses are in the nature of reinsurance and are in run-off. In broad terms, the purpose of each scheme is to accelerate the payment of reinsurance claims that have been made, or might be in the future, so as to resolve their potential reinsurance now, and to enable their businesses to be terminated.

"Cut-Off" or "VALUATION" Schemes Generally 3 Schemes such as the present ones are referred to as "cut-off" or "valuation" schemes. While there have been several in England in recent years, this appears to be only the second in Australia, the first being the subject of Conti J's judgment in Re Mercantile Mutual Insurance (Australia) Ltd ("MMIA") (2002) 196 ALR 362.

4 Three general features of the proposed schemes may be noted: · first, the liabilities of the Scheme Companies to be subject to the schemes are all reinsurance liabilities. Accordingly, the "Scheme Creditors" will all be insurance companies or similar entities, that can be expected to be commercially sophisticated and knowledgeable, particularly in relation to the reinsurance considerations involved in any assessment of the schemes; · secondly, the business of both companies has been in run-off for a long time; and · thirdly, in the case of each Scheme Company there is a clear surplus of assets over liabilities. 5 In my view, the Scheme Companies must establish: a. first, that all reasonable steps have been or will be taken to identify the Scheme Creditors and to bring the proposed schemes to the attention of all of them, and that it seems likely that their efforts in these respects will prove successful; b. secondly, that the Explanatory Statement for the proposed schemes provides an adequate description of their effect, and otherwise complies with s 412(1) of the Corporations Act; c. thirdly, that the manner in which the proposed schemes will operate is not so clearly unfair and unreasonable that they should not be allowed to go forward for consideration; d. fourthly, that it is appropriate that there be, as proposed, a single meeting of all the Scheme Creditors of each Scheme Company as distinct from meetings of classes of Scheme Creditors; e. fifthly, that the way in which the value of Scheme Creditors' claims will be determined for the purposes of voting at the meeting of the Scheme Creditors for each Scheme Company is fair and reasonable; f. sixthly, that the proposed schemes comply with the requirements of other provisions of the Corporations Act, including the requirement of s 411(2) that 14 days' notice of the hearing of the application be given to the Australian Securities and Investments Commission ("ASIC") and that ASIC has had a reasonable opportunity to examine the proposed schemes and explanatory memorandum, and to make submissions to the Court in relation to them; g. seventhly, that the Scheme Companies have provided or will provide full disclosure concerning the proposed schemes, not only to the Scheme Creditors, to ASIC and to the Court, but also to the Australian Prudential Regulation Authority ("APRA"), and that APRA has also had a reasonable opportunity to examine the documents and to make submissions to the Court concerning them.

NRG London Reinsurance Company Limited 6 NRG London Reinsurance Company Limited ("NRG London") is incorporated in the United Kingdom. It is an indirect subsidiary of ING Groep NV, a Netherlands incorporated and listed company. 7 NRG London was an active reinsurer until 1991, when it ceased underwriting new risks, and was placed into run-off. 8 As at 31 December 2005, NRG London had total assets of GBP 164,821,000 and total liabilities of GBP 108,500,000 (giving an excess of assets over liabilities of GBP 56,321,000).

NRG London (Australian Branch) 9 NRG London is registered in Australia as a foreign corporation under Part 5B.2 of the Corporations Act and is licensed as a general insurer under the Insurance Act 1973 (Cth) ("the Insurance Act"). Registration of a foreign corporation under the Corporations Actdoes not create a new legal entity (s 601BM). However, because APRA regulates only the Australian operations of NRG London, it is necessary to distinguish between its Australian and non-Australian operations. 10 APRA is concerned with the protection of NRG London's Australian policyholders. There is a general requirement under s 28 of the Insurance Act that insurers maintain "in Australia" (as to which see s 116A of that Act) assets at least equal to the value of their liabilities. Prudential Standards made under the Insurance Actrequire foreign insurers to maintain assets in Australia in excess of their liabilities in Australia, in an amount at least equal to their "Minimum Capital Requirement": Prudential Standard GPS 110, para 25 and Prudential Standard GPS 120, para 18. NRG London must, therefore, maintain a balance sheet for its Australian operations. The accounts so prepared depict the financial condition of a notional entity referred to as a "branch": see Prudential Standard GPS 110, para. 25. 11 The notional division between NRG London's Australian operations and its other operations is reinforced by restrictions that APRA places on NRG London's ability to deal with its Australian assets. NRG London may not reduce its Australian assets (save to the extent of current-year profits) without APRA approval: Prudential Standard GPS 110, paras. 6 and 25; Guidance Note GGN 110.1, paras 20-22. 12 In this way, APRA "quarantines" within Australia assets sufficient to meet NRG London's Australian liabilities. APRA is therefore able to ignore NRG London's non-Australian assets and liabilities. NRG London's Australian assets must not be applied, without APRA approval, towards satisfying its other non-Australian liabilities. (It is possible that NRG London's Australian policyholders may benefit from NRG London's non-Australian operations, in the sense that, at least so far as Australian law is concerned, NRG London remains obliged, and, subject to any contrary requirement of foreign law, able to apply its non-Australian assets towards satisfying its Australian liabilities). 13 For the above reasons, it is convenient to refer to the "Australian branch" of NRG London ("NRG London (Australian Branch)") as if it were a separate legal entity. For the purposes of these proceedings, for example, because the liabilities of NRG London that are to be subject to the scheme are only those "in Australia", it is convenient to refer to them as liabilities of the NRG London (Australian Branch). 14 NRG London (Australian Branch) was established in September 1973, and was an active reinsurer in the Australian market between 1974 and 1991. In 1991, NRG London (Australian Branch) was placed into run-off. Accordingly, it has now been in run-off for approximately the last 15 years. If the NRG London scheme is eventually implemented, NRG London (Australian Branch) will no longer be carrying on business. 15 As at 31 December 2005 NRG London (Australian Branch) had total assets of AUD 21,321,000 and total liabilities of AUD 7,211,000. (an excess of assets over liabilities of AUD 14,110,000).

NRG Victory Australia Limited 16 NRG Victory Australia Limited ("NRG Victory") is incorporated in Victoria. It is also an indirect subsidiary of ING Groep NV. 17 NRG Victory was an active reinsurer in the Australian market between 1956 and 1993, writing both life insurance and reinsurance, and non-life reinsurance. 18 In 1993, NRG Victory ceased underwriting new risks. Unsuccessful attempts were made to sell the company as a composite insurer, and NRG Victory's life business was transferred to Life Reinsurance of Australia Limited pursuant to a scheme under the Life Insurance Act 1945 (Cth) ("the Life Insurance Act"). NRG Victory's non-life reinsurance business remained and was placed into run-off. 19 Accordingly, NRG Victory's business has been in run-off for the last 12 to 13 years. If the NRG Victory scheme is eventually implemented, NRG Victory will no longer be carrying on business. 20 As at 31 December 2005, NRG Victory had total assets of AUD 47,268,000 and total liabilities of AUD 12,905,000 (an excess of assets over liabilities of 34,363,000).

The PROPOSED Schemes 21 With two exceptions, the two proposed schemes are identical. The first exception relates to the way in which the Scheme Creditors are defined. The second relates to the value of Scheme Creditors' claims, above which the respective Scheme Companies have a discretion to terminate the scheme and to "revert to run-off".

The Scheme Creditors 22 In each scheme, the Scheme Creditors are creditors of the particular Scheme Company in respect of a "Claim". A person has a Claim against a Scheme Company if the Scheme Company has a liability to that person under a contract of reinsurance, unless the liability falls within the expression "Excluded Liabilities". 23 Each scheme defines Excluded Liabilities differently. In the NRG London scheme, Excluded Liabilities are all liabilities of NRG London under contracts of reinsurance that were not written through NRG London (Australian Branch). 24 In the NRG Victory scheme, Excluded Liabilities are all liabilities under contracts of life reinsurance that were transferred to Life Reinsurance of Australasia Limited by way of the scheme under the Life Insurance Act in late 1993 (mentioned at [18] above). Strictly, it is unnecessary to exclude such liabilities, since NRG Victory is no longer liable on those contracts. They were expressly excluded "for abundant precaution".

The Compromise or Arrangement 25 In the absence of the proposed schemes, the Scheme Companies' liabilities to the Scheme Creditors would be discharged in response to the making and assessment of claims over a lengthy period of time. Under the proposed schemes, all potential entitlements to reinsurance indemnity that a Scheme Creditor has against a Scheme Company will be valued and paid out now.

The Process by which the Value of Claims will be Determined 26 The first step in the determination of the value of Scheme Creditors' claims is the submission of a "Claim Form". 27 Where it has sufficient information to do so, the Scheme Company will pre-complete a Claim Form stating its estimate of the value of the Scheme Creditor's claim. If the Scheme Creditor agrees with the estimate, it need take no further action. 28 If the Scheme Company has not pre-completed a Claim Form, or if the Scheme Creditor disagrees with the Scheme Company's estimate, the Scheme Creditor will itself complete the Claim Form and submit it to the Scheme Company along with any relevant supporting information. 29 In order to assist the Scheme Companies, the Scheme Adjudicator (see below), and the Scheme Creditors in valuing claims, an "Estimation Methodology" has been prepared by Scott Collings, of Finity Consulting Pty Limited. Mr Collings is a Fellow of the Institute of Actuaries of Australia. He is the actuary appointed by NRG London (Australian Branch) and NRG Victory pursuant to s 39 of the Insurance Act and approved by APRA pursuant to s 40 of that Act. The Estimation Methodology is not a binding statement of the manner in which claims will be valued. It is, however, a statement of what Mr Collings believes is an appropriate actuarial approach to the valuation of most of the claims expected to be made. The Estimation Methodology is set out in Section 5 of the Scheme Booklet to be distributed to Scheme Creditors. 30 If the Scheme Company agrees with the value assigned by the Scheme Creditor, that amount will become the value of the claim. If the Scheme Company does not agree, and discussions do not produce agreement, the question of the value of the claim will be submitted to a "Scheme Adjudicator". 31 The Scheme Adjudicator will consider all relevant information, may consult with advisers, such as actuaries and lawyers, and will determine the value of the claim. 32 Once the value of a claim is agreed or is determined by the Scheme Adjudicator, the Scheme Company will deduct from that amount any amount owing by the Scheme Creditor to the Scheme Company, and pay the balance to the Scheme Creditor (in the unlikely event that there is a balance owing to the Scheme Company, the Scheme Creditor will have to pay that amount to the Scheme Company).

Reversion to Run-Off 33 If the total amount of all claims exceeds a certain amount, the Scheme Company will have the option of terminating the Scheme and reverting to run-off. The amount is the amount for which provision for insurance liabilities has been made in the Scheme Company's accounts. For NRG London (Australian Branch), that amount is $7,032,000, and for NRG Victory, it is $11,788,000. 34 The provision for reversion to run-off gives reassurance that the Scheme Companies will not be rendered insolvent as a result of an unexpectedly high value of Claims. 35 The most significant potential detriment for a Scheme Creditor is the possibility that the value of a Scheme Creditor's claim will prove to be less than the amount of the indemnity to which the Scheme Creditor would have been entitled if run-off had continued. No doubt Scheme Creditors will take into account this disadvantage, and, on the other hand, the extent of the advantage to them of having money in hand, in determining whether to support the scheme.

Identification and Notification of Potential Scheme Creditors 36 A review of the records of NRG London (Australian Branch) and NRG Victory has identified many potential Scheme Creditors. There remains, however, the possibility that some may not have been identified. It must be remembered that we are considering insurers that entered into contracts of reinsurance with a Scheme Company prior to 1991 in the case of NRG London (Australian Branch), and prior to 1993 in the case of NRG Victory. 37 The records of NRG London (Australian Branch) identify only policyholders who have been in contact with NRG London (Australian Branch) since 1 July 1989, in connection, for example, with the payment or receipt of money, the provision of advice regarding premiums, or the notification of a claim. The records of NRG Victory disclose only the identity of all policyholders who have been in contact with it since 1 January 1994. 38 Both Scheme Companies have, however, also made inquiries of managers or agents of various underwriting pools regarding the identity of any remaining claimants on the pools. 39 In summary, all potential Scheme Creditors of both Scheme Companies have been identified except for any who have not had any contact with NRG London (Australian Branch) since 1 July 1989 or with NRG Victory since 1 January 1994. 40 Most potential claimants on NRG London (Australian Branch) and on NRG Victory are Australian insurance companies. Other potential claimants are Australian entities that are not authorized insurers (such as government insurance offices and self-insurers), and some New Zealand, Papua New Guinean and Pacific Islands entities. 41 In order to ensure that those possible further Scheme Creditors learn of the respective schemes, NRG London and NRG Victory will send copies of the Scheme Booklet to all authorised insurers in Australia, and to all brokers who have, to their knowledge, written business for NRG London (Australian Branch) or NRG Victory, as the case may be. 42 NRG London and NRG Victory will also advertise the respective schemes in newspapers in Australia, New Zealand and Papua New Guinea. Those advertisements will provide contact details for potential Scheme Creditors to make inquiries and to obtain copies of the Scheme Booklet. 43 There is a further category of policyholders who may be Scheme Creditors of NRG Victory. Between 1970 and 1974, NRG Victory accepted general insurance risks in South East Asia. It appears from the records of NRG Victory that this business was transferred to another company in 1974. It is not, however, possible to be certain that it was. 44 No claims emanating from South East Asia have been made on NRG Victory, and no contact with NRG Victory has been made on behalf of any South East Asian policyholder since at least 1994. 45 Given the apparent transfer of the South East Asian business to another company, and the lack of any known claims history, it is perhaps unnecessary that any steps be taken to notify potential South East Asian Scheme Creditors of NRG Victory, but in fact the NRG Victory scheme will be advertised in a newspaper in Asia.

The Scheme Booklet 46 Because of the similarity between the two schemes, only one Scheme Booklet has been prepared for distribution to the Scheme Creditors under both schemes. This does not trouble me: the differences between the proposed schemes are so minor that a potential Scheme Creditor under one scheme will not be confused or misled by the presence in the Scheme Booklet of a discussion concerning the other scheme.

47 The Scheme Booklet provides a comprehensive statement of: (a) the way in which the schemes will operate; (b) the principal advantages and disadvantages of the schemes; (c) the financial circumstances of the Scheme Companies; (d) the steps required to be taken by potential Scheme Creditors in relation to the schemes, and the meetings at which the Schemes will be considered for approval; and (e) the absence of any interest on the part of the directors of the Scheme Companies that may be affected by the schemes. 48 The Scheme Booklet has been provided to APRA and ASIC. Certain parts of the Scheme Booklet constitute the Explanatory Statement for the schemes: see Corporations Act ss 411(1), 412(1).

Estimation Methodology 49 The Estimation Methodology provides for a different approach to the valuation of claims, depending upon whether they are "property damage", "specific incident" or "latent injury" claims, and upon whether the claims are "known" or "incurred but not reported" ("IBNR"). 50 For property damage claims and specific incident claims that are known, the value will be the Scheme Creditor's estimate of the value of the particular claim, that is to say, the amount recorded by the Scheme Creditor as the expected settlement cost of the claim. 51 For IBNR property damage claims and IBNR specific incident claims, no methodology has been prescribed. This is because it is considered unlikely that there will be any IBNR claims, and it will be incumbent upon a Scheme Creditor to prove that it has or may have such a claim, and how it should best be valued. 52 For latent injury claims, the valuation methodology applicable to known and IBNR claims will be applied. That is because both types of latent injury claims share certain features which make their valuation a similar exercise. For example, even once the total damage suffered by an individual as a result of exposure to asbestos is known, there are likely to be questions of "sharing", both as between defendants and as between insurers. That is to say, because a person may have been exposed to asbestos from different sources and over a lengthy period of time, a Scheme Company may have an exposure only in respect of certain years or certain sources. As a result, liability for any one claim will usually be apportioned between different entities. The same considerations apply to IBNR asbestos claims. 53 The approach adopted by the Estimation Methodology to the valuation of latent injury claims is to permit the Scheme Creditor a wide discretion as to the way in which it will substantiate its claim. The Estimation Methodology indicates that information should be supplied to establish such matters as the nature of the exposure, the number of policyholders likely to be affected, and the likely frequency of claims. The value of latent injury claims will be determined on the basis of the supporting information supplied by the Scheme Creditor. 54 In all cases, there will be no discount applied to the value of a claim as a result of the proposed early payment, provided the claim is projected to settle within five years of the "Valuation Date" (30 June 2006). For claims that are projected to settle after 30 June 2011, the value of the claim will be discounted by 5.5% per annum, but only for the period from 30 June 2011 to the date of projected settlement.

Classes of Creditors 55 Subsection 411(1) of the Corporations Act empowers the Court to order a meeting or meetings of creditors "or class of creditors" to be convened. There will be a separate meeting for each Scheme Company's Scheme Creditors (cf Re Safety Fix Pty Ltd [1962] VR 467 at 470), but it is not proposed to convene separate meetings for classes of Scheme Creditors of the one Scheme Company. 56 Are there classes of Scheme Creditors for which separate meetings should be convened? 57 If the answer to this question is yes, the proposed scheme to be considered at the class meetings would remain unchanged: there would be no change in the definition of the Scheme Creditors and there would not be a different scheme for each class. The scheme would be binding on either class only if agreed to by the necessary majority of the meeting of that class: see Corporations Act s 411(4). 58 Unless the scheme were to be changed to stipulate that it could proceed as binding on only one class of Scheme Creditors, such as the IBNR Scheme Creditors (see below), the scheme would become binding only if agreed to by both classes at their separate meetings: in effect, each class would have a right of veto. This would be so, even if, for example, the total value of the claims of non-IBNR Scheme Creditors was quite small compared to the value of the total value of the claims of IBNR Scheme Creditors. (In passing, it should be noted that s 411(5), which provides for an aggregation of the votes cast at separate meetings has no application: that subsection applies to multiple meetings of "creditors" or of the same "class of creditors, not to the separate meetings that necessarily arise from the existence of classes of creditors.)

59 Counsel for the Scheme Companies have fairly raised for the Court's consideration two possible bases for the ordering of separate meetings of classes of creditors: · first, the distinction between IBNR and other Scheme Creditors;

· secondly, the distinction between Scheme Creditors that are, and those that are not, indebted to the Scheme Company, giving rise to a set off.

60 I turn to the first possible basis of classification. Non-IBNR claims are to be valued at the settlement cost placed on them by the Scheme Creditor. Therefore, if the circumstances giving rise to the Scheme Company's reinsurance liability under a claim have occurred and been reported, the Scheme Creditor will receive the amount that it would have received in the ordinary course by way of indemnity. The Scheme Creditor will be in the same position as it would have been in if the Scheme Company had continued in run-off. IBNR Scheme Creditors, on the other hand, would be in a different position than that in which they would have been under a run-off, because their future (and contingent) claims will be valued and they will be paid out. As Lewison J observed in Re British Aviation Insurance Co Ltd [2005] EWHC 1621("BAIC") (at [83]), "barring a miracle, the valuation will not be the same as the indemnity." 61 The significance of the notion of a "class" of creditors in the present context has been considered in several cases. In Sovereign Life Assurance Company v Dodd [1892] 2 QB 573 ("Sovereign Life"), Lord Esher MR said (at 579-580): "The Act says that the persons to be summoned to the meeting (all of whom, be it said in passing, are creditors) are persons who can be divided into different classes - classes which the Act of Parliament recognises, though it does not define them. This, therefore, must be done: they must be divided into different classes. What is the reason for such a course? It is because the creditors composing the different classes have different interests; and, therefore, if we find a different state of facts existing among different creditors which may differently affect their minds and their judgment, they must be divided into different classes."

In the same case, Bowen LJ said (at 583) that a "class": "must be confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest." 62 More recently, in Re Hills Motorway Ltd (2002) 43 ACSR 101 ("Hills Motorway"), Barrett J observed (at 104) that: "The test is thus not one of identical treatment. It is one of community of interest. The court must ask itself whether the rights and entitlements of the different groups, viewed in the totality of the scheme's context, are so dissimilar as to make it impossible for them to consult together with a view to their common interest. The focus is not on the fact of differentiation but on its effects. The extent and nature of the differentiation must be measured in terms of the effect on the ability to consult together in a common interest or, in other words, the ability to come together in a single meeting and to debate the question of what is good or bad for the constituency as a whole and where the common good lies. Only if the differentiation destroys that ability - the word used by Bowen LJ is 'impossible' - does class distinction come to prevail." See also Re HIH Casualty and General Insurance Ltd [2006]NSWSC 485 at [63] ff. 63 In MMIA, Conti J referred (at [18], [19]) to "the class question" in the circumstances of a scheme generally similar to the present schemes. His Honour referred to Sovereign Life, Hills Motorway, and Re Hawk Insurance Co Ltd [2001] 2 BCLC 480 at 527, and, applying Bowen LJ's "impossibility of consulting together" test, held that a single meeting of all creditors was appropriate. 64 In BAIC, Lewison J considered (at [83]) that on the facts of that case, policyholders with "known" or "accrued" claims constituted a separate class from policyholders with IBNR claims. His Lordship said (at [92]): "In my judgment in the particular circumstances of a solvent scheme, where a solvent liquidation is not a realistic alternative, those with accrued claims and those with IBNR claims have interests which are sufficiently different as not to make it possible for them sensibly to consult together "in their common interest". In truth, they do not have a common interest at all."

65 The decision in BAIC has not, however, been treated as deciding that policyholders with accrued claims must always be treated as constituting a separate class from policyholders with IBNR claims. In Re NRG Victory Reinsurance Ltd [2006] EWHC 679 ('NRG Victory'), in which the circumstances were very similar to those of the present case, Lindsay J took the view that there was only one class of creditors. His Lordship said (at [17]): "Whether separate classes for ['accrued' and IBNR claims] are truly necessary will depend on a long list of variables such that what is right for one company and one scheme will not necessarily be right for another. Where insurance companies are concerned, much will depend on matters such as the types of business which they covered and in what proportions between those classes of business; whether the business conducted was direct insurance or reinsurance and in what proportions; in what parts of the world, even, that their claimants are to be found; their solvency margins; how recently and when they stopped writing such new business as they used to write; the various times, class by class of business, at which they stopped; how long, accordingly, they have been in run-off and what has been their commutation experience."

66 Finally, in Re Sovereign Marine & General Insurance Co Ltd [2006] EWHC 1335 ("Sovereign Marine"), Warren J also emphasised that each case depends on its own facts (see, for instance, [114]), and ordered the convening of a single meeting of creditors to consider a "cut-off" scheme. 67 BAIC is distinguishable on its facts. In particular, the creditors in that case were not, as they are here, all insurance companies. Indeed, "about 92 percent of its asbestos liabilities [were] owed to direct insureds": BAIC at [6]. 68 In the present case, the following features suggest the appropriateness of convening a meeting of only one class of creditors: (a) The businesses in question are exclusively in the nature of reinsurance: the Scheme Creditors, all being insurers, can be expected to be commercially sophisticated and knowledgeable and to be able to assess where their best interests lie (in Sovereign Marine, Lindsay J regarded this consideration as a relevant distinction from the facts of BAIC);

(b) The whole of the reinsurance businesses (being in fact the whole businesses) of NRG London (Australian Branch) and NRG Victory will be subject to the schemes (as opposed to merely a part of those businesses being subject to the schemes);

(c) The reinsurance businesses of the Scheme Companies have been in run-off for over twelve years (as opposed to a short period of run-off, with corresponding uncertainty about, or instability in, the portfolio's experience).

(d) Both Scheme Companies have assets significantly in excess of their liabilities (so that all policyholders can be confident of receiving payment in full on their claims).

(e) It is not expected that there will be many (or any) IBNR claims for property damage or specific incidents. It is expected that there will be IBNR claims for latent injuries, but in that case Mr. Collings has given evidence that the approach to determining both known and IBNR claims is similar. That is to say, in each case the approach is to determine the value of the claim in accordance with generally accepted actuarial principles.

(f) There is no suggestion that the value of any of the Scheme Companies' IBNR claims will be unable to be estimated.

69 In my opinion, so far as the evidence reveals, it will be possible for Scheme Creditors of both IBNR and non-IBNR descriptions to consult together with a view to their common interest. It is not conclusive that the non-IBNR Scheme Creditors, or some of them, may be expected to think it immaterial to them whether the Scheme proceeds or not. 70 For the above reasons, I do not think it appropriate to order separate meetings of IBNR and non-IBNR Scheme Creditors. 71 It should be emphasised that if the meetings reveal a relevant problem, it will remain open to the Court not to approve the scheme. Indeed, although the observations made by Lewison J in BAIC related to the convening stage, in fact in that case the meeting of creditors had already been held and the question of the appropriateness of the single meeting as against class meetings was being dealt with at the approval hearing, at which some creditors appeared to oppose the granting of the approval. Indeed, in NRG Victory, Lindsay J observed (at [15]): "… until the creditors have in fact had the opportunity of meeting and consulting together, it will be exceptionally difficult to be sure whether it will prove impossible or not for them to consult together with a view to their common interest. It is a somewhat broad test and there could well be cases where the creditors, given the chance to meet, prove more flexible, cohesive or mutually accommodating than their respective lawyers ahead of the event would have expected and that creditors, even lumped together, find no unfairness and more that is in common between them than might have been thought to be divisive."

72 As noted above, the other basis on which it might be suggested that meetings of classes of the Scheme Creditors are called for is that some Scheme Creditors will have a debt owing by them to the Scheme Companies set off against the value of their Claims. One (albeit unlikely) consequence of the application of a set-off is that the Scheme Creditor may be indebted to the Scheme Company. 73 The fact of the existence of a set-off does not, however, change the fundamental nature of the compromise between the Scheme Company and the Scheme Creditors. In all cases, the issue to be decided by the Scheme Creditors is whether they wish to have their claims "accelerated" and valued now, or to call on their reinsurance indemnity in the ordinary course of run-off. It is by no means "impossible" for Scheme Creditors to discuss and consider that issue in circumstances where some of them will have countervailing amounts set off against their claims. 74 For these reasons, I think that it is appropriate for only one meeting of the Scheme Creditors of each Scheme Company to be convened.

Determination of Value for Voting at Meetings 75 The process by which the value of Scheme Creditors' claims will be determined for the purposes of voting at the scheme meetings is set out in the Scheme Booklet. Where a Scheme Company has sufficient information to make its own determination of the value of a Scheme Creditor's claim, it will pre-complete that Scheme Creditor's Claim Form, inserting an estimated value of the claim. The Scheme Creditor may accept that value, or it may reject it and specify a different value. 76 The value of claims for voting purposes will be determined by the Chairperson of the meeting of Scheme Creditors. That decision will be based on: (a) Information provided by the Scheme Creditor; (b) Information available to the Scheme Company from its records; and (c) Advice from the Scheme Actuary. 77 The advice of the Scheme Actuary, who is the Scheme Companies' authorised actuary, Mr Collings, will ensure that the Chairperson will have available to him or her the advice of a suitably qualified and independent expert. That advice will be based upon the principles set out in the Estimation Methodology, referred to earlier. 78 Finally, any remaining concern will, of course, be able to be raised by a Scheme Creditor at the confirmation hearing or, if it is applicable, pursuant to s 1321 of the Corporations Act.

Compliance with the Corporations Act 79 The proposed schemes do not contravene the Corporations Act. In particular, the proposed Explanatory Statement complies with s 112(1).

Disclosure to APRA and ASIC 80 Full details of the Schemes have been provided in a timely manner to both APRA and ASIC. In particular, the Scheme Booklet, incorporating the Explanatory Statement and the proposed schemes, has been provided to them. 81 Both APRA and ASIC were notified of the date of the hearing, and indicated that they did not intend to appear to oppose the making of the orders sought.

Conclusion 82 Orders as sought should be made. I certify that the preceding eighty-two (82) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Counsel for the Plaintiffs: Mr J T Gleeson SC and Mr N J Owens

CORPORATIONS ACT 2001 OF AUSTRALIA NOTICE OF MEETINGS NRG LONDON REINSURANCE COMPANY LIMITED (ABN 77 001 160 792) and NRG VICTORY AUSTRALIA LIMITED (ABN 47 002 971 477) Notice is hereby given that by order made on 5 July 2006, the Federal Court of Australia has directed that meetings of the scheme creditors (as defined in the schemes of arrangement referred to below) of NRG London Reinsurance Company Limited ("NRG London") and NRG Victory Australia Limited ("NRG Victory") be held on 15 August 2006, commencing at 10.00 am and 10:30 am (Sydney time), respectively. The Scheme Creditors of NRG London are defined in the NRG London scheme of arrangement as creditors of NRG London in respect of liabilities (including potential and future liabilities) under reinsurance contracts written through the Australian branch of NRG London, but excluding liabilities under reinsurance contracts not written through the Australian branch of NRG London. The Scheme Creditors of NRG Victory are defined in the NRG Victory scheme of arrangement as creditors of NRG Victory in respect of liabilities (including potential and future liabilities) under reinsurance contracts written through NRG Victory, but excluding liabilities under reinsurance contracts that were transferred to Life Reinsurance of Australasia (now Hannover Life Re of Australasia Ltd) in 1993. The purpose of the meetings is to consider, and if thought fit, agree to schemes of arrangement (with or without modification) proposed between NRG London and its Scheme Creditors and between NRG Victory and its Scheme Creditors. Scheme Creditors may vote in person at the meetings or may appoint another person as their proxy to attend and vote in their place. Any Scheme Creditor may obtain a copy of the proposed scheme of arrangement, the Explanatory Statement and the proxy and voting form required to be furnished pursuant to the Corporations Act by requesting the same by email to schemes@recentre.com.au, by fax to the attention of Ross Littlewood on (61) (02) 9274 3033, or post by issuing a postal service request to Ross Littlewood, NRG London Reinsurance Company Limited, Level 21, Tower Building, Australia Square, 264 George Street, Sydney, New South Wales, 2000. Date: 10 July 2006 Ross Littlewood Director of NRG Victory Australia Limited and Agent in Australia for NRG London Reinsurance Company Limited ANNEXURE "B" Scheme Booklet IN RELATION TO SCHEMES OF ARRANGEMENT pursuant to section 411 of the Corporations Act, 2001 of Australia (the "Schemes") between each of NRG LONDON REINSURANCE COMPANY LIMITED (ABN 77 001 160 792) (a company incorporated in England, with limited liability, registered as a foreign company under the Corporations Act, 2001 of Australia) and NRG VICTORY AUSTRALIA LIMITED (ABN 47 002 971 477) (together being the "Scheme Companies") and their respective SCHEME CREDITORS (as defined in the Schemes) This document is important and requires your immediate attention. If you are in any doubt as to any aspect of this proposal or as to the action you should take, you should consult your insurance broker or other financial or professional adviser without delay.

A copy of this Scheme Booklet has been made available to all licensed Australian general insurers and to brokers known to have been involved in placing and/or administering reinsurance contracts relating to the business covered by the Scheme.

IMPORTANT NOTICE TO SCHEME CREDITORS Purpose of document: this Scheme Booklet (comprising the explanatory statement, notices of meeting and terms of the schemes of arrangement) has been prepared in connection with the proposed schemes of arrangement pursuant to section 411 of the Corporations Act between each of NRG London Reinsurance Company Limited and NRG Victory Australia Limited, the Scheme Companies, and their respective Scheme Creditors.

Time statements are made: this Scheme Booklet is dated 5 July 2006. The statements, opinions and information contained in this Scheme Booklet are made, held or given respectively as at the date of this Scheme Booklet, unless another time is specified and such statements, opinions and information are made, held or given solely by or on behalf of the relevant Scheme Company unless expressly attributed to another party. Service of this Scheme Booklet shall not give rise to any implication that there has been no change in the facts set out in it since such date. Subject to any obligations under the Corporations Act or any other applicable laws and regulations, each Scheme Company has no obligation to, and will not, disseminate after the date of this Scheme Booklet, any updates or revisions to any such statements or any change in events, conditions or circumstances on which any of those statements are based.

No admissions: nothing contained in this Scheme Booklet constitutes an admission of any fact or liability on the part of either Scheme Company or any other person in respect of any asset to which they may be entitled or any claim against them. No estimate of the amount of any claim against a Scheme Company specified in the voting form, or otherwise provided for voting purposes, shall be taken into account in calculating payments under the Schemes. Any such estimate shall only be used for voting purposes at the meetings of Scheme Creditors to consider the Schemes.

Summary qualified by Schemes: the summary of the principal provisions of the Schemes and related matters contained in this Scheme Booklet is qualified in its entirety by reference to the Schemes themselves, the full text of which is set out in Section 6.

Further copies of this Scheme Booklet may be obtained upon request from the Scheme Companies:

c/o NRG Victory Australia Limited, Level 21, Tower Building Australia Square 264 George Street Sydney, NSW, 2000 Australia Tel: + 61 (02) 9274 3000 Fax: + 61 (02) 9274 3033 Email: schemes@recentre.com.au Attention: Mr Ross Littlewood

No other representations: neither Scheme Company has authorised any person to make any representation, whether oral, written, express or implied, concerning the proposed Schemes, which are inconsistent with the statements contained within this Scheme Booklet. Consequently, if such representations are made, they should not be relied upon. ASIC: a copy of this Scheme Booklet has been lodged with ASIC under section 412(6) of the Corporations Act. ASIC has been requested to provide a statement, that ASIC has no objection to the Schemes. If ASIC provides this statement, then it will be produced to the Court at the time of the Court hearing to approve the Schemes. Neither ASIC nor any of its officers take any responsibility for the contents of this Scheme Booklet. APRA: a copy of this Scheme Booklet has been provided to APRA. Neither APRA, nor any of its officers, take any responsibility for the contents of this Scheme Booklet. APRA has no formal role in relation to schemes of arrangement pursuant to section 411 of the Corporations Act, but in its capacity of prudential regulator of general insurers has confirmed that it has no objection to the Schemes proceeding. Court: an order by the Court under Section 411(1) and (1A) of the Corporations Act is not an endorsement of, or any other expression of opinion, on the Schemes. No financial advice: no Scheme Creditor should construe the contents of this Scheme Booklet as legal, tax, financial or other professional advice. This Scheme Booklet does not take into account the specific investment objectives, financial situation and particular needs of Scheme Creditors. Scheme Creditors should read this Scheme Booklet carefully, and in its entirety, before making a decision as to how to vote on the resolutions to be considered at the Scheme Meetings. Each Scheme Creditor should consult its own financial and/or professional advisers as to the legal, tax, financial or other matters relevant to the action it should take in connection with the Scheme. Forward-looking statements: this Scheme Booklet may contain forward-looking statements relating to future matters which are subject to known and unknown risks, uncertainties and other important factors that could cause the actual conduct, results, performance or achievements of either Scheme to be materially different from those expressed or implied by such statements. Neither the Scheme Companies, nor their associates or respective officers and advisers, give any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Scheme Booklet will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Capitalised terms: when used in this Scheme Booklet, capitalised terms have the meanings set out in section 11. ADVISERS Scheme Companies NRG London Reinsurance Company Limited Contact: Ross Littlewood Level 21, Tower Building Tel: +(61) (02) 9274 3000 Australia Square Fax: +(61) (02) 9274 3033 264 George Street Email: schemes@recentre.com.au Sydney NSW 2000 Australia NRG Victory Australia Limited Contact: Ross Littlewood Level 21, Tower Building Tel: +(61) (02) 9274 3000 Australia Square Fax: +(61) (02) 9274 3033 264 George Street Email: schemes@recentre.com.au Sydney NSW 2000 Australia Scheme Actuary Scott Collings Contacts: Scott Collings/Adam Payne Finity Consulting Pty Limited Tel: +(61) (02) 8252 3300 Level 7, 155 George Street Fax: +(61) (02) 8252 3399 The Rocks NSW 2000 Email: scott.collings@finity.com.au Australia adam.payne@finity.com.au Australian Legal Advisers Clayton Utz Contacts: Michael Parshall/Nicholas Mavrakis/ Levels 22-35 Peter Mann No 1 O'Connell Street Tel: +(61) (02) 9353 4000 Sydney NSW 2000 Fax: +(61) (02) 82206700 Australia Email: mparshall@claytonutz.com nmavrakis@claytonutz.com pmann@claytonutz.com Scheme Adjudicator Postal address: Contact: Mark Moyes Mark Moyes Tel: +(61) (0) 410 464 362 3 red Pty Ltd Fax: +(61) (02) 9327 3601 PO Box 761 Email: mmoyes@3red.com.au Woollahra NSW 1350 Australia

Registered office: Mark Moyes 3 red Pty Ltd 173 Sutherland Street Paddington NSW 2021

KEY DATES AND EXPECTED TIMETABLE Proxy and voting forms to be returned by 5 pm Sydney time on 11 August 2006 Scheme Meetings 15 August 2006 commencing at 10.00 am Court hearings to sanction the Schemes 16 August 2006 Effective Date of the Schemes 16 August 2006 Valuation Date 30 June 2006 Claims Submission Date 11:59 pm Sydney time on a date 120 days after the Effective Date Long Stop Date 11:59 pm Sydney time on a date 365 days after the Claims Submission Date The above dates, other than the Valuation Date, and the date of the Scheme Meetings, are tentative only as the date of the Court hearings will only be confirmed if the Scheme is approved at the Scheme Meetings. Guidance Notes and instructions for completion of the proxy and voting form are set out on the forms themselves.

Table of contents

1. Letter from the Scheme Companies
2. Establishing the Schemes 2.1 Introduction 2.2 Application of Schemes 2.3 Creditors not covered by the Schemes 2.4 Persons notified of the Schemes 2.5 Reasons for the Schemes 2.6 The main advantages of each Scheme 2.7 Possible disadvantages of the Schemes 2.8 Attending the Scheme Meetings 2.9 How to attend and vote at the Scheme Meetings 2.10 Value of Claims for Voting Purposes 2.11 Consequences of voting at Scheme Meetings
3. Summary of the operation of the Schemes once they have become effective 3.1 Introduction 3.2 Prohibited acts 3.3 Consequences of prohibited acts 3.4 Interest 3.5 Currency conversion 3.6 Distribution of Claim Forms 3.7 Completing Claim Forms and set-off 3.8 Incorporation of proxy and voting form material 3.9 Claims Submission Date and failure to submit Claim Form 3.10 Review of submitted Claim Form 3.11 Determination of Agreed Claims (Pre Set-Off) 3.12 Determination of Final Determined Claims 3.13 Dispute Resolution Procedure 3.14 Payment of Final Determined Claims 3.15 Broker funding 3.16 Extension of time limits 3.17 Reversion to run-off 3.18 The Scheme Adjudicator 3.19 The Scheme Actuary 3.20 Final implementation of the Schemes 3.21 Review of acts, omissions or decisions in respect of the Schemes 3.22 Assistance to be provided 3.23 Termination of the Schemes 3.24 Scheme Costs 3.25 Governing Law and Jurisdiction
4. Corporate history of the Scheme Companies and the Scheme Business 4.1 Corporate history of NRG London and the Australian branch of NRG London and its Scheme Business 4.2 Corporate history of NRG Victory and its Scheme Business
5. Estimation Methodology 5.1 Introduction 5.2 Types of Claim 5.3 Jurisdiction of exposure 5.4 Property damage Claims 5.5 Claims for specific incident 5.6 Claims for latent injury
6. Schemes of Arrangement and Deed Polls 6.1 NRG London Scheme 6.2 NRG Victory Scheme 6.3 Attachment to Scheme 6.4 Deed Poll - in favour of NRG London and its Scheme Creditors 6.5 Deed Poll - in favour of NRG Victory and its Scheme Creditors
7. Notices of Scheme Meetings 7.1 NRG London 7.2 NRG Victory
8. Proxy and voting form 8.1 NRG London Reinsurance Company Limited Scheme of the Australian branch 8.2 NRG Victory Australia Limited Scheme
9. Claim Form 9.1 NRG London Reinsurance Company Limited Scheme of the Australian branch 9.2 NRG Victory Australia Limited Scheme
10. Additional Information 10.1 Documents available for inspection 10.2 Impact on non-Scheme Creditors of Scheme Companies 10.3 Authorisations under Insurance Act 1973 10.4 APRA 10.5 ASIC 10.6 Directors and Directors' interests 10.7 Scheme Adjudicator and Scheme Adjudicator's Interests 10.8 Scheme Actuary and Scheme Actuary's Interest 10.9 Chairperson and chairperson's interest 10.10 Legal advisers' interest 10.11 No other material information 10.12 Date of Scheme Booklet 10.13 Summary Table and Detailed Tables
11. Definitions

NRG London Reinsurance Company Limited (ABN 77 001 160 792) NRG Victory Australia Limited (ABN 47 002 971 477) 5 July 2006 Dear Scheme Creditor Proposed Schemes of Arrangement We are writing to you concerning separate solvent schemes of arrangement that NRG London Reinsurance Company Limited (NRG London) and NRG Victory Australia Limited (NRG Victory) propose to enter into with their respective Scheme Creditors pursuant to section 411 of the Corporations Act (the Schemes). The primary objective of the Schemes is to conclude the run-off of all business of NRG Victory and all business of NRG London written through its Australian branch at an earlier stage than would otherwise be possible. The NRG London (Australian branch) Scheme will not relate to any business of NRG London that was not written through its Australian branch. This objective will be achieved by establishing an accelerated Claims agreement process whereby all Claims by Scheme Creditors against each Scheme Company, including future and contingent Claims, will be valued, finally determined and paid in full earlier than would be possible through a normal run-off. Purpose of this document This Scheme Booklet will summarise, amongst other things: (a) the advantages and possible disadvantages of the Schemes (Section 2 and in particular Section 2.6 and 2.7); and (b) the main provisions of the Schemes (Section 3); and (c) background information in relation to the Scheme Companies and the business proposed to be included in the Schemes (Section 4). These summaries are a guide only and should not be relied upon instead of reading the terms of the Schemes set out in Section 6 and the notices of the Scheme Meetings which are due to be held on 15 August 2006 at the offices of Clayton Utz, Level 34, No 1 O'Connell Street, Sydney NSW 2000 commencing at 10:00 am in the case of NRG London, and 10:30 am in the case of NRG Victory set out in Section 7. Steps to be taken by the Scheme Creditor On or before the Scheme Meeting: · read the Scheme Booklet in its entirety; · complete and return the proxy and voting form so that it is received no later than 5:00 pm (Sydney time) on 11 August 2006. Proxy and voting forms may also be handed in at the registration desk at the relevant Scheme Meeting prior to the commencement of the Scheme Meetings (see Section 2.9); and · attend the relevant Scheme Meeting(s). The Scheme Meetings will be held on 15 August 2006 at the offices of Clayton Utz, Level 34, No 1 O'Connell Street, Sydney NSW 2000, commencing at 10:00 am. The Scheme Companies will notify Scheme Creditors once the Schemes become effective and will place advertisements in The Australian, The Australian Financial Review, The National Business Review (NZ), The New Straits Times, Papua New Guinea Post-Courier and other national newspapers distributed in the Pacific Islands calling for Scheme Creditors to complete and submit Claim Forms. Where the Scheme Company has sufficient information to do so, it will pre-complete each Claim Form sent to any Scheme Creditor known to it at the Effective Date with an estimate of the value of the Claims of the Scheme Creditor. It will not pre-complete an amount with respect to IBNR. Once notified that the Schemes have become effective: · if you agree with the pre-completed amounts on the Claim Form, you are not required to submit a Claim Form or provide any supporting information; · if you do not agree with the pre-completed amounts, you are required to complete or correct and submit the Claim Form (with supporting information) by the Claims Submission Date being 11:59 pm, Sydney time, on the first business day falling 120 days after (and not including) the Effective Date. Consequences if Schemes become effective If a Scheme becomes effective between a Scheme Company and its Scheme Creditors, the Scheme Company will, from that date (the Effective Date): (a) cease to adjust Claims as they arise in the ordinary course of conducting its Scheme Business; and (b) seek to agree a "once-and-for-all" valuation of each Scheme Creditor's Claim (including previously unquantified and/or un-notified Claims). In order to qualify for payments under the Scheme, Scheme Creditors must duly submit their Claim Form in accordance with the Scheme by the Claims Submission Date, that is, no later than 11:59 pm Sydney time on the first business day falling 120 days after (but not including) the Effective Date. Each Scheme Company will endeavour to agree the value of the Scheme Creditor's Claim with the Scheme Creditor. If the valuations of such Claims cannot be agreed, they will be determined by the Scheme Adjudicator in accordance with the provisions of the Scheme, with limited rights of review. Claims which are agreed or determined in this way will become Agreed Claims (Pre Set-Off). Once a Claim becomes an Agreed Claim (Pre Set-Off), set-off and other relevant deductions as described in Section 2.9 will be applied. The amount of the Scheme Creditor's Claim after such deductions will become the Scheme Creditor's "Final Determined Claim". Final Determined Claims will be paid in full at the values so agreed between the applicable Scheme Company and Scheme Creditor, or as otherwise determined in accordance with the applicable Scheme. In short, each Scheme, will effect a mass commutation between the Scheme Company and its Scheme Creditors. Separate Schemes It should be noted that each Scheme is in law a separate scheme of arrangement and is independent of the other. As a result: (a) neither Scheme Company will have any liability or responsibility for the other Scheme Company's liabilities or obligations under the other Scheme Company's Scheme; and (b) it is possible for one Scheme to become effective, even if the other Scheme does not become effective. Directors Recommendation The directors of each Scheme Company consider that its Scheme will offer its Scheme Creditors the most effective and economical method for having their Claims against it determined and paid in the shortest practicable time. All Scheme Creditors who are entitled to vote at the Creditors' Meetings are encouraged to vote in favour of the Scheme. Yours sincerely

Ross Littlewood (agent for and on behalf of NRG London Reinsurance Company Limited, Australian branch and director of NRG Victory Australia Limited)

This Section summarises why the Schemes have been proposed, their advantages and disadvantages, and sets out the process for the Scheme Meetings. Section 3 summarises the terms of the Schemes if they become effective. Introduction

The primary objective of each Scheme is to terminate the run-off of Reinsurance Contracts written by each Scheme Company much earlier than would be the case if Claims were left to mature in the normal course. Each Scheme establishes a method by which the present and future Claims of the Scheme Creditors will be valued as at the Valuation Date, 30 June 2006, and paid in full at the values agreed or determined in accordance with the provisions of the Schemes, at the earliest possible opportunity. A scheme of arrangement, such as that proposed here, is a compromise or arrangement between a company or a registered foreign company and its creditors (or any class of them), entered into pursuant to section 411 of the Corporations Act. A scheme of arrangement becomes legally binding on a company or a registered foreign company and its affected creditors if: a majority in number representing not less than 75% in value of the creditors, or any class of creditors, present and voting in person or by proxy, vote in favour of the scheme of arrangement at a meeting specially convened with the leave of the Court;

the Court subsequently sanctions the scheme of arrangement; and

an office copy of the order of the Court sanctioning the Scheme is lodged with ASIC.

Each Scheme is proposed between a Scheme Company and its respective Scheme Creditors.

Scheme Creditor is defined in the Scheme itself but, in summary, will be restricted to those persons who have, or may in the future have a Claim against a Scheme Company in respect of a Liability under a Reinsurance Contract written by or on behalf of the Scheme Company other than an Excluded Liability. This will include liabilities under or arising out of: all reinsurance contracts written by or on behalf of NRG Victory or NRG London written through its Australian branch;

in the case of the Australian branch of NRG London, its membership of ANIP; and

in the case of NRG Victory, its membership of ANIP.

Excluded Liabilities are defined in each Scheme and in summary are: in the case of NRG London, reinsurance contracts and insurance contracts written by NRG London other than through its Australian branch; and

(b) in the case of NRG Victory, reinsurance contracts which were transferred to Life Reinsurance of Australasia in 1993 (now Hannover Life Re of Australasia Ltd) under the Life Insurance Act 1945 and upon transfer, effectively ceased to be a liability of NRG Victory. The Scheme Business is described in greater detail in Section 4. Each of the Scheme Companies is proposing a Scheme and each such Scheme is, in law, a separate Scheme. A Scheme Company does not have any liability or responsibility for the other Scheme Company's liabilities or obligations. Each such Scheme is capable of becoming effective whether or not the other Scheme becomes effective. Scheme Creditors should note that once a Scheme becomes effective, it will bind the applicable Scheme Company in respect of which it has become effective and all its Scheme Creditors worldwide, irrespective of whether they were notified of the Scheme and/or the Scheme Meetings or not and/or whether they voted at the Scheme Meeting or not, and if they voted, whether they voted for or against the relevant Scheme. Creditors not covered by the Schemes

Each Scheme will: not affect any creditor of a Scheme Company other than a Scheme Creditor; and

only affect Scheme Creditors in respect of their Claims, net of any deduction or set-off.

Creditors who are not Scheme Creditors will not be entitled to attend or vote at the Scheme Meetings. As the Scheme Companies are solvent, the Scheme Companies intend to continue to pay these creditors in the normal course. Persons notified of the Schemes

A copy of this Scheme Booklet has been made available to: · all parties who, according to a Scheme Company's records, have or may have a Claim under an insurance or reinsurance contract written by, or on behalf of the Scheme Company; · the manager of ANIP, ANIP Pty Ltd, for distribution to such persons as it sees fit; · all licensed Australian general insurers; and · all brokers identified as having been involved in placing and/or administering business with a Scheme Company other than in respect of Excluded Liabilities. The Scheme Companies would be grateful if those brokers provided with a copy of the Scheme Booklet would inform their clients of the Schemes to ensure that, wherever possible, each and every Scheme Creditor is notified of the Schemes and the action that it is required to take. The fact that this Scheme Booklet has been made available to you does not necessarily mean that you are a Scheme Creditor or that you will be affected by either Scheme. You may also wish to ask your broker for further details about your possible involvement with the Scheme Companies. Reasons for the Schemes

Each Scheme Company expects the run-off of its Scheme Business to continue for a considerable number of years and, as a result, believes that its Scheme will be the most effective method of making full payment to its Scheme Creditors in the shortest practicable time. Each Scheme will have the effect of concluding the run-off of the applicable Scheme Business earlier than would be the case if it were to continue until all Claims materialise and are agreed and paid in the normal course. Each Scheme Company considers that all of its Final Determined Claims will be paid in full, based on its present financial condition assuming all Claims were to run to their natural expiry and taking into account the anticipated costs of running-off the Scheme Business. There is, however, no absolute guarantee that each Scheme Company will have sufficient financial resources to settle all of its Final Determined Claims in full. As at 31 December 2005, NRG London's net asset position was as set out in the table below: NRG London NRG London (Australian branch) Ł'000 (1) A$'000 (2) Total Assets 164,821 21,321 Total Liabilities 108,534 7,211 Net Assets 56,287 14,110

Notes: (1) Figures as per the audited accounts of NRG London for the year ended 31 December 2005. (2) Figures as per the statutory return provided by NRG London (Australian branch) to APRA for the year ended 31 December 2005. A more detailed summary of the audited balance sheet of NRG London as at 31 December 2005, is included in Section 4.1. Note that the figures for NRG London are presented in Pounds Sterling and the figures for NRG London (Australian branch) in Australian Dollars. The Reserve Bank of Australia website indicates that the official Pound Sterling/Australian Dollar exchange rate as at: · 30 December 2005 was 0.4246; · 30 June 2006 was 0.4049. As at 31 December 2005, the audited balance sheet of NRG Victory indicated: NRG Victory $'000 (1) Total Assets 47,268 Total Liabilities 12,905 Net Assets 34,363

Notes: (1) Figures as per the audited accounts of NRG Victory for the year ended 31 December 2005. A more detailed summary of the audited balance sheet of NRG Victory as at 31 December 2005 is included in Section 4.2. The main advantages of each Scheme

Each Scheme Company considers that its Scheme will be advantageous to its Scheme Creditors for the reasons including: Early payment. The Scheme should enable its Scheme Creditors to have their Claims agreed or determined as Final Determined Claims and paid in full considerably sooner than if the run-off of the Scheme Company was to continue until all Claims mature and are paid in the ordinary course. If Claims are determined or agreed under the Scheme as Final Determined Claims, they can be paid as soon as practicable after the Effective Date. It is anticipated that payments to Scheme Creditors with Final Determined Claims will commence within one month of the Effective Date;

No discount for early payment unless projected settlement date of Claim is greater than 5 years. Administration costs which would have been incurred in running off the Scheme Company's relevant books of business over many years should be reduced materially by the Scheme. In recognition of this, the Scheme Company is committing to pay Claims without discount for the time value of money, provided that the Claim is projected to settle within 5 years. Claims with a projected settlement date greater than 5 years will be discounted, including Claims in respect of latent diseases (further details regarding this are set out in Section 5 dealing with the Estimation Methodology). The same discount arrangement will apply to amounts determined to be owing by the Scheme Creditor to the Scheme Company for the purposes of set-off;

Certainty and costs savings. The Scheme should enable its Scheme Creditors to achieve finality in respect of any Claims regarding the Scheme Business. Any concerns which Scheme Creditors may have over the continuation of a Scheme Company's run-off, or over the long-term future solvency of a Scheme Company, will be removed. Scheme Creditors will also benefit from reduced costs in administering their Claims against the applicable Scheme Company over a lengthy period; and

Proceedings. Each Scheme is designed to enable Claims to be dealt with quickly and without protracted litigation, as each Scheme prohibits (without the prior written consent of the relevant Scheme Company), the commencement or continuation of any proceedings outside the mechanisms of the Schemes, where the purpose of such proceedings is to obtain payment of a Claim, or to establish the existence or quantum of a Claim.

In addition to the advantages listed above, each Scheme Company has sought to facilitate the Claims submission and determination process in the following ways: Practical Claims submission process. A Scheme Creditor may submit and continually revise its Claims up to the Claims Submissions Date (provided that it has not been notified that its Claim has been agreed by the Scheme Company in the meantime). Also, Scheme Creditors may elect to incorporate into their Claim Form, the Claims information which they had already included in their proxy and voting form (for the purpose of voting at the Scheme Meetings), by simply checking the applicable proxy and voting form election box on their Claim Form and resubmitting the Claim Form;

Simplified Claims agreement process. Each Scheme will provide a practical and cost-effective process for agreeing all present and future Claims (including those which may not easily be evaluated, such as incurred but not reported losses (IBNR)), by way of a transparent Estimation Methodology. The Estimation Methodology is set out in Section 5. The Estimation Methodology has been developed by Scott Collings, the Scheme Actuary, who is also the approved actuary for the Australian branch of NRG London and NRG Victory. Mr Collings is a director of the actuarial firm 'Finity Consulting Pty Limited'. Mr Collings prepared the Actuarial Valuation Report of Insurance Liabilities of both the Australian branch of NRG London and NRG Victory as at 31 December 2005.

The Estimation Methodology provides Scheme Creditors with guidance on how all Claims (including Notified Outstanding Claims and IBNR) should be calculated and supported for specific types of Claim. In the event that agreement cannot be reached between a Scheme Company and a Scheme Creditor in relation to a Claim, the Scheme provides for the final and binding determination of that Claim by the Scheme Adjudicator in what is intended to be a fair and efficient manner. Possible disadvantages of the Schemes

Scheme Creditors should also be aware of the following possible disadvantages in considering the Schemes: Estimation. The simplified Claims agreement process has been designed to deal with Claims (including Notified Outstanding Claims and IBNR) as accurately and fairly as possible (see the main advantages discussed at Section 2.6). The effect of each Scheme will be to commute and terminate a Scheme Creditor's policy with a Scheme Company in return for a once-and-for-all payment. This process will result in certain Claims being estimated, which creates the risk that Scheme Creditors may receive a different amount (either more or less) in respect of their Claims, than would have been the case had the Scheme Business been run-off in the traditional way;

Failure to submit Claim Form(s). To facilitate the acceleration and payment of Claims, each Scheme provides a mechanism for cutting-off Claims. All Claims must be duly submitted on the Claim Form for proportional, non-proportional and IBNR Claims on or prior to the Claims Submission Date. Claims notified after the Claims Submission Date will be valued at an amount limited to the value of the Scheme Creditor's Claim which had already been finally agreed by the relevant Scheme Company on or before the Effective Date and which remains unpaid (if any). Such amounts will be sent to the relevant Scheme Creditor upon a request being made to Ross Littlewood (see page 3 above for contact details). For the avoidance of doubt, only amounts which have been pre-completed by the relevant Scheme Company on the relevant Scheme Creditor's Claim Form are considered by the relevant Scheme Company to be "finally agreed" for this purpose. To the extent that a Scheme Creditor has no such "finally agreed" Claim, its Claim will be valued at zero, and the relevant Scheme Company will have no further liabilities to it in respect of its Scheme Business. If a Scheme Creditor wishes to receive payment in respect of any other amounts, it must submit a Claim Form, providing the necessary information in respect of its Claims, prior to the Claims Submission Date. Scheme Creditors will not be able to change their Claim Form after the earlier of the Claims Submission Date, and the date they have been notified that their Claim has become an Agreed Claim (Pre Set-Off); and

Impact on Scheme Companies. The Schemes may result in certain large IBNR Claims being submitted, or further information being provided in respect of known Claims, which may significantly increase the Liabilities of the Scheme Companies in respect of the Scheme Business. Theoretically, this could prejudice Scheme Creditors whose Claims are agreed and settled later than others if this material adverse change impacted on the Scheme Companies capacity to pay any remaining Scheme Creditors. However, the Scheme Companies do not believe this is a significant risk given the significant surplus of assets over liabilities of the Scheme Companies, and the capacity of the Scheme Companies to revert to run-off (described in Section 3.17 below).

Sections 2.6 and 2.7 above, set out the main advantages, and possible disadvantages, of the Schemes for Scheme Creditors identified by the Scheme Companies. It is impossible, however, to address each Scheme Creditor's individual circumstances, and as such, it is impossible to regard this list of advantages and disadvantages as exhaustive. Each Scheme Creditor is advised to make its own assessment of how the relevant Scheme would affect its interests. Each Scheme Company considers that the main advantages referred to above outweigh the possible disadvantages. Attending the Scheme Meetings

If you are a Scheme Creditor, you are entitled to attend and vote at the relevant Scheme Meeting convened for 15 August 2006, in respect of each Scheme Company against which a Scheme Liability arises. The Scheme Meetings have been convened as directed by the Court, for the purpose of considering and, if thought fit, approving the Scheme in relation to each Scheme Company. The Scheme Meetings will be held on 15 August 2006, at the offices of the offices of Clayton Utz, Level 34, No 1 O'Connell Street, Sydney, NSW 2000, commencing at 10:00 am (Sydney time), in respect of the NRG London (Australian branch) Scheme and 10:30 am, (Sydney time), in respect of the NRG Victory Scheme. Each Scheme Company is of the view that all Scheme Creditors should vote at any applicable Scheme Meeting, irrespective of whether they have proportional, non-proportional or IBNR Claims. Each Scheme Company considers that one Scheme Meeting for its Scheme is appropriate given that, under the Scheme, Scheme Creditors do not give up or acquire rights which are so dissimilar as to make it impossible for Scheme Creditors to consult together with a view to their common interest. Notice of the Scheme Meetings is included in Section 7. It may also be obtained by email, fax or post by issuing a postal service request to a Scheme Company using the contact details given on page 3 above. How to attend and vote at the Scheme Meetings

Scheme Creditors may attend the relevant Scheme Meeting in person or by attorney or by proxy. An individual appointed as corporate representative to attend a Scheme Meeting on behalf of a Scheme Creditor who is a corporation, partnership or other unincorporated body, must bring with him or her to the relevant Scheme Meeting, a form or appointment executed by the corporation either under common seal, or by a director and secretary, by a partner on behalf of the partnership, or by the individual (as the case requires). Enclosed with this Scheme Booklet is a proxy and voting form, to be used for voting at the Scheme Meetings. The proxy and voting form can be used for all Claims against all Scheme Companies. A copy of the proxy and voting form can be found in Section 8 of the Scheme Booklet. Each Scheme Creditor should indicate on the proxy and voting form how it intends to vote in respect of each Scheme Company against which it maintains a Claim. To assist Scheme Creditors, where the relevant Scheme Company has sufficient information to do so, it will pre-complete the proxy and voting form of known Scheme Creditors, indicating its estimate of the value of the Scheme Creditor's Claims. No estimate will be included for IBNR, as the Scheme Companies do not provide for IBNR on a Scheme Creditor by Scheme Creditor basis. Any details of Claims provided are intended to assist Scheme Creditors in completing their proxy and voting form and should not be regarded as a complete and accurate list of all Claims of a Scheme Creditor that may be affected by the Scheme. The Scheme Creditor may accept this statement of Claims and value, or may alter the details. The proxy and voting form must be returned to the Scheme Company. Scheme Companies, (re)insurance brokers, agents or intermediaries may be able to assist Scheme Creditors in confirming or identifying Claims. Further copies of the proxy and voting form are available upon request to the relevant Scheme Company (see page 3 above for contact details). Whether or not Scheme Creditors intend to be present in person at the relevant Scheme Meeting, they are requested to complete and sign the proxy and voting form in accordance with the instructions printed on the proxy and voting form to the Scheme Company c/o the person and address specified on page 3, above and the Guidance Notes accompanying the proxy and voting form and return the proxy and voting form as soon as possible, and in any event so that they are received by 5:00 pm (Sydney time) on 11 August 2006. Appointing a proxy will not prevent a Scheme Creditor from attending and voting in person at the relevant Scheme Meeting. However, a proxy will not be able to vote if the relevant Scheme Creditor attends the relevant Scheme Meeting and votes in person. Proxy and voting forms may also be handed in at the registration desk at the relevant Scheme Meeting prior to the commencement of the Scheme Meeting. Please note that faxed and emailed forms of proxy and voting forms will only be accepted if they are legible. Each Scheme Company would like as many votes as possible to be cast at its Scheme Meeting (whether in person or by proxy). Each Scheme Creditor is therefore encouraged to sign and return its proxy and voting form as soon as possible. Value of Claims for Voting Purposes

The value to be attributed for voting purposes to a Scheme Creditor's Claim will be determined by the Chairperson of the relevant Scheme Meeting based on the Chairperson's estimate of the Scheme Company's net liability to the Scheme Creditor in respect of the Claim after any deduction, set-off or cross-claim. The chairperson will be Nancy Milne (see Section 10.9 for further details) and Ian Hutchinson in her absence. In the event that either Nancy Milne or Ian Hutchinson has a conflict of interest in relation to the determination of any issue the subject of the Scheme Meetings, the Scheme Adjudicator will be the chairperson for the purpose of making any decision or determination in relation to which Nancy Milne or Ian Hutchinson has such a conflict. The Chairperson's determination shall be based on: the information provided by the relevant Scheme Creditor;

the information available to the relevant Scheme Company from its existing records; and

advice from the Scheme Actuary (who will be present at the Scheme Meetings) applying the principles described in the Estimation Methodology. Account will also be taken of any known deduction, set‑off or cross‑claim. If the sum of the deduction, set-off or cross-claim exceeds the value of the Claim, the value of the Claim for voting purposes will be zero.

For the purposes of voting at the Scheme Meetings, Claims will be converted into Australian dollars at the closing mid-market rate of exchange for the relevant currency, quoted on the Reserve Bank of Australia website, 2 Business Days prior to the Scheme Meetings (being 11 August 2006). The Chairperson has the power to reject a Claim, in whole or in part, for voting purposes only if the Chairperson considers that it does not represent a reasonable assessment of the sum due from a Scheme Company. The decision of the Chairperson as to the value to be placed on a Claim for voting purposes is final (subject to an overriding decision of the Court at the second court hearing). Where the Chairperson has amended a Scheme Creditor's assessment of the value of its Claims for voting purposes, the Chairperson will, if possible, notify the relevant Scheme Creditor of such amendment, and the reasons for the amendment before the Scheme Meetings and, in any event, after the Scheme Meeting but before the second court hearing. Consequences of voting at Scheme Meetings

The amount of a Claim admitted for voting purposes will not constitute an admission of the existence or amount of any Claim, and will not bind any Scheme Company or Scheme Creditor, unless the Scheme Creditor accepts the value of the Claim set out in the pre-completed proxy and voting form. Scheme Creditors should note that information and estimates provided in relation to the proxy and voting form may not be protected by legal professional privilege and may be required to be disclosed in any relevant future legal proceedings. Scheme Creditors should consult their own legal advisers as to the consequences of furnishing such particulars in the event that they are, or may become, involved in any litigation. Summary of the operation of the Schemes once they have become effective

This Section describes the main provisions of the Schemes once they have become effective. However, this summary should not be relied upon as a substitute for reading the Schemes (set out in Section 6) in their entirety. Prohibited acts

The Schemes will prohibit the commencement (or continuation) of any Proceedings by a Scheme Creditor against a Scheme Company, or its Property, in relation to any Scheme Business, unless the Scheme Creditor has first obtained written consent from the relevant Scheme Company. Each Scheme will also prohibit Scheme Creditors from commencing or continuing any Proceedings or other regulatory process against the relevant Scheme Company or its Property, for the purpose of obtaining payment in whole or in part, either directly or indirectly, of any Claim, arising in relation to the Scheme Business except: in relation to an Final Determined Claim determined in accordance with the terms of the relevant Scheme where the relevant Scheme Company has failed to make payment of that Final Determined Claim to the Scheme Creditor in accordance with the terms of the relevant Scheme; or

in relation to an act, omission or decision of a person administering the Scheme, in accordance with section 1321(a) of the Corporations Act (see Section 3.20 and 3.21).

If a Scheme Creditor does commence or continue Proceedings against a Scheme Company or its Property after the Effective Date and receives money, Property or any other benefit, it will be treated as having received an advance payment on any Final Determined Claim due to it. Consequently, any entitlement to payment in respect of a Final Determined Claim under a Scheme will be reduced to an amount determined by the relevant Scheme Company after taking into account, amongst other things, the money, Property or other benefit received by the Scheme Creditor, as well as any costs incurred by the Scheme Company as a result of the Proceedings. If any such advance payment to a Scheme Creditor exceeds the amount of its Final Determined Claim, the Scheme Creditor will be required to repay the balance immediately to the relevant Scheme Company to the extent permitted by law. These provisions will operate without prejudice to any rights of action the relevant Scheme Company may have against such a Scheme Creditor. Interest

Scheme Creditors will be entitled to receive interest as part of their Final Determined Claim where they are entitled to such interest by reason of contract, statute or other relevant law. Such interest will be calculated from the date provided for in the relevant contract, statute or law, to the day prior to the date on which payment is made in respect of such Final Determined Claim, in accordance with the relevant Scheme. Scheme Creditors will also be entitled to receive default interest (calculated in accordance with the Scheme) on Final Determined Claims, where such Final Determined Claim has been finally agreed or otherwise determined, but remains unpaid by the relevant Scheme Company for 90 days or longer from the date of such agreement or determination. No other interest will be payable. Currency conversion

Claims and Agreed Claims (Pre Set-Off) will be denominated in the currency provided by the relevant Reinsurance Contract(s). Where the amount to be applied in set-off against the Scheme Creditor's aggregate Agreed Claim (Pre Set-Off) is payable in a different currency to the currency of the Agreed Claim (Pre Set-Off), the amount to be applied in set-off shall be converted to the relevant currency of the Agreed Claim (Pre Set-Off), at the Relevant Rate of Exchange (as defined in the applicable Scheme). Final Determined Claims shall be denominated and paid in the predominant currency in which the Claims arise, unless otherwise requested by a Scheme Creditor (however, each Scheme Company has sole discretion whether or not to agree to such request). Distribution of Claim Forms

Once the Schemes become effective, the Scheme Companies will, as soon as reasonably practicable after the Effective Date, send notice by post to: all persons who, according to a Scheme Company's records, have or may have a Claim under an insurance or reinsurance contract written by or on behalf of the Scheme Company;

the manager of ANIP, ANIP Pty Ltd, for distribution to such persons as it sees fit;

all known brokers and agents identified as having placed Scheme Business with a Scheme Company, or known to be acting on behalf of Scheme Creditors. Brokers and agents are urged to notify all possible Scheme Creditors of the action that they should consider taking with regard to the Scheme and to advise Scheme Creditors to complete and submit their Claim Forms by the Claims Submission Date.

The Scheme Companies will also place advertisements in The Australian, The Australian Financial Review, The National Business Review (NZ), The New Straits Times, Papua New Guinea Post-Courier and other national newspapers distributed in the Pacific Islands (these being the same newspapers and publications in which the Scheme Meetings are being advertised), calling for Scheme Creditors to complete and submit Claim Forms. To assist Scheme Creditors, where the Scheme Company has sufficient information to do so, it will pre-complete each Claim Form sent to any Scheme Creditor known to it (at the Effective Date) with its estimate of the value of the Scheme Creditor's Claims. Scheme Creditors will not be required to submit a Claim Form or provide any supporting information if they agree with the pre-completed amounts. No amount will be pre-completed in respect of IBNR. Scheme Creditors will be required to complete or correct their Claim Form, making such amendments or additions to the details as may be necessary, and to submit the Claim Form to the relevant Scheme Company, together with any appropriate supporting information (as described in the Guidance Notes to the Claim Form and in the Estimation Methodology). Scheme Creditors are requested to submit Claim Forms by email (provided any attachments are submitted in Microsoft Word, Microsoft Excel or pdf format only), fax or post, in accordance with the instructions set out in the Guidance Notes attached to the Claim Form. Any details on Claim Forms that have been pre-completed by the Scheme Company are intended to assist the Scheme Creditor in completing its Claim Form, and should not be regarded as a complete and accurate list of all Claims of a Scheme Creditor that may be affected by the Scheme. If a Scheme Company becomes aware of the existence of a Scheme Creditor after the Effective Date, but before the Claims Submission Date, it shall send the above mentioned notice to that Scheme Creditor as soon as reasonably practicable and, if practicable, before the Claims Submission Date. Completing Claim Forms and set-off

As mentioned above, Scheme Creditors will be invited to submit details of their Claims to be taken into account in determining their Agreed Claims (Pre Set-Off), and to supply documents and other information in support of such Claims. An Estimation Methodology is set out in Section 5 to provide guidance to Scheme Creditors in estimating their Claims. The purpose of the Estimation Methodology is to illustrate the techniques that will be employed by each Scheme Company, in association with the Scheme Actuary (as and when required), in reviewing Scheme Creditors' Claims. The Estimation Methodology also sets out the supporting evidence that the relevant Scheme Company will expect to see in relation to Scheme Creditors' Claims. Scheme Creditors will also be invited to submit details of any sums which they owe to a Scheme Company, which are to be set-off in reduction of the Claims of that Scheme Creditor against the relevant Scheme Company. Where there are mutual balances due between a Scheme Company and a Scheme Creditor (including, but not limited to, contingent, prospective and unliquidated balances), it is administratively convenient for those balances to be set-off against each other, leaving a net balance due to, or from, a Scheme Creditor. Only the balance remaining after the application of set-off shall be payable by the Scheme Company or the Scheme Creditor (as appropriate). Each Scheme Creditor is requested to complete its Claim Form in accordance with the instructions on the Claim Form, (a copy of which is set out in Section 9), and to submit it by email, fax or post so as to reach the Scheme Companies at any time on or before the Claims Submission Date. Scheme Creditors should note that particulars as to the estimates of the amount of any future Claims, furnished by a Scheme Creditor, may not be protected by legal professional privilege under Australian law, and may be discoverable at the insistence of a third party with a Claim against the Scheme Creditor, in any action or Proceedings to which the Scheme Creditor may be party. Scheme Creditors should consult their legal advisers as to the consequences of furnishing such particulars in the event that they are, or may become, involved in any litigation with third parties. Brokers or agents who submit Claim Forms on behalf of their clients who are Scheme Creditors are requested to provide evidence of their authority (to act on behalf of such Scheme Creditors) to the applicable Scheme Company. Incorporation of proxy and voting form material

A Scheme Creditor may elect to incorporate into its Claim Form any Claims information (including supporting documentation) which it provided in the proxy and voting form that was submitted for the purpose of voting on the Schemes. In order to make this election, a Scheme Creditor should follow the instructions to make a proxy and voting form election (a copy of which is included at Section 9). Claims which are not adequately substantiated in the proxy and voting form (or indeed in any Claim Form), may ultimately not be agreed by the relevant Scheme Company. Claims Submission Date and failure to submit Claim Form

The Claims Submission Date will be the last date by which Claim Forms may be received by the Scheme Companies and it will be 11:59 pm, Sydney time, on the first business day falling 120 days after, (and not including), the Effective Date. This date will be notified to Scheme Creditors in the notices and advertisements referred to in Section 3.6. Each Scheme Creditor will be entitled to submit a new or revised Claim Form and to provide revised or further supporting information to the applicable Scheme Company in respect of its Claims, at any time up to the Claims Submission Date. No Scheme Creditor will have any right after the Claims Submission Date to submit a Claim Form, or a revised Claim Form. A Scheme Creditor may provide revised or further supporting information after the Claims Submission Date in response only to a notice or request from the Scheme Company or the Scheme Adjudicator. A Scheme Company may, in its absolute discretion, treat a Claim Form that is not submitted by the Claims Submission Date as if it had been submitted by the Claims Submission Date. It is intended that this discretion will only be exercised in the event of exceptional and unforeseen circumstances beyond the control of Scheme Creditors, such as in the event of a postal strike, widespread telecommunications failure or other event of similar scale and nature. Where a Scheme Creditor fails to submit a Claim Form to a Scheme Company by the Claims Submission Date, the total Claims of that Scheme Creditor will be valued at an amount limited to the value of the Scheme Creditor's Claims which had already been finally agreed by the relevant Scheme Company on or before the Effective Date, and which remain unpaid, (if any). Only amounts which have been pre-completed by the Scheme Company on the relevant Scheme Creditor's Claim Form as its estimate of the Scheme Creditor's Claims are considered by the Scheme Company to be "finally agreed" for this purpose. If a Scheme Creditor wishes to receive payment in respect of any other amounts (including IBNR), it must submit a Claim Form in respect of such Claim on, or prior to, the Claims Submission Date. If a Scheme Creditor fails to submit its Claim Form by the Claims Submission Date, its Claim will be valued at zero, and the applicable Scheme Company will have no further Liabilities to it in respect of the Scheme Business (save to the extent of any Claim which has already been "finally agreed" on or before the Effective Date, as described above). Review of submitted Claim Form

Each Scheme Company will review each Claim Form submitted to it by the Claims Submission Date, in accordance with the applicable Scheme and the actuarial principles set out in the Estimation Methodology. This review will form the basis of the determination of any Scheme Creditor's Agreed Claim (Pre Set-Off) under the applicable Scheme. A Scheme Company will consider, amongst other things, whether any estimates relating to future or contingent Claims are reasonable. If required, a Scheme Company will request that the Scheme Actuary review estimates of the amount of any Notified Outstanding Claims and/or IBNR Claims, furnished by a Scheme Creditor, for reasonableness. If a Scheme Creditor submits a Claim Form for Notified Outstanding Claims and/or IBNR Claims, but does not submit an estimate of the amount concerned, the relevant Scheme Company may not be able to agree the value of those Claims under the relevant Scheme, and this may result in such Claims being valued at nil, and being fully and finally discharged. Scheme Creditors are therefore urged to ensure that they submit an estimate of the amount of any Claims for Notified Outstanding Claims and/or IBNR Claims (if applicable). Determination of Agreed Claims (Pre Set-Off)

If a Scheme Company agrees with the value attributed by a Scheme Creditor to its Claims against the Scheme Company, as submitted on its Claim Form, that Scheme Company will notify the Scheme Creditor to that effect, and such amount shall become that Scheme Creditor's Agreed Claim (Pre Set-Off). If a Scheme Company does not agree with the value attributed by the Scheme Creditor to its Claims against it, or requires further information, it will notify the Scheme Creditor as soon as reasonably practicable. The Scheme Creditor shall provide any further information requested by the Scheme Company within 30 days of deemed receipt (in accordance with clause 9.4(b) of the Scheme) of such request. If that Scheme Company is still unable to agree with the value attributed by a Scheme Creditor against the Scheme Company after the provision of such additional information, it may send the Scheme Creditor an Alternative Claim Form, setting out the values which it is prepared to accept in respect of that Scheme Creditor's Claim. If the Scheme Creditor does not accept the values attributed to its Claims in the Alternative Claim Form, it must give notice to the Scheme Company, within 30 days of the Scheme Creditor's deemed receipt of the Alternative Claim Form, that it wishes its Claim to be referred to the Scheme Adjudicator, who in the first instance will be Mark Moyes of 3 red Pty Ltd. If the Scheme Creditor does not dispute the Alternative Claim Form within this 30 day period, its Claim will be valued at the amount set out in the Alternative Claim Form, and this will become the Scheme Creditor's Agreed Claim (Pre Set-Off). The Scheme Adjudicator will make a final determination in respect of each Disputed Claim referred to him, in accordance with the procedure set out in the applicable Scheme. Except as required by law, the Scheme Adjudicator's decision will be final. Determination of Final Determined Claims

As soon as reasonably practicable, after each Claim has been agreed, determined or adjudicated to be an Agreed Claim (Pre Set-Off) under the terms of the Scheme, the relevant Scheme Company shall determine the Scheme Creditor's Final Determined Claim by taking into account: (a) any amounts already paid to the Scheme Creditor in respect of that Claim; (b) any reinstatement premium payable to the Scheme Creditor in accordance with the terms of the relevant Reinsurance Contracts; (c) the value of any security; and (d) any other amounts which may be set-off pursuant to the terms of the Schemes. The Scheme Company shall notify the Scheme Creditor of the value attributed to its Final Determined Claim or of the amount owing by a Scheme Creditor to the Scheme Company as soon as reasonably practicable following its determination. If the Scheme Company and a Scheme Creditor cannot agree on the appropriate deductions to be made from an Agreed Claim (Pre Set-Off), in order to arrive at the Final Determined Claim, the dispute will be referred to the Scheme Adjudicator for final determination. The Scheme Companies shall make a full and final payment to the relevant Scheme Creditor in respect of any Final Determined Claim, as soon as reasonably practicable following its determination. The Scheme Creditor shall pay any amount owing to the Scheme Company as soon as reasonably practicable following its determination. Dispute Resolution Procedure

The Dispute Resolution Procedure has been specifically designed to deal with Claims as expeditiously, economically and fairly as possible. Disputed Claims will be dealt with in accordance with the Dispute Resolution Procedure (set out in clause 4.6 of the attachment to each Scheme), by the Scheme Adjudicator, who is independent of the Scheme Companies. Any Claim which has not been agreed by 11:59 pm Sydney time, on the day on which the period of 365 days from, but not including, the Claims Submission Date elapses, the Long Stop Date, shall be referred to the Scheme Adjudicator, unless both the Scheme Creditor and Scheme Company, and on such terms as they may, otherwise agree. The Scheme Adjudicator's decision will be final and binding on the relevant Scheme Company and Scheme Creditor to the extent permitted by law (see Section 3.20 and Section 3.21). Payment of Final Determined Claims

Once a Scheme Creditor's Claim becomes a Final Determined Claim, it is payable in full by the relevant Scheme Company to the Scheme Creditor. The Scheme Creditor's Final Determined Claim will be determined by deducting any right of set-off, counterclaim or other deduction as provided for by the Scheme, from the Scheme Creditor's Agreed Claim (Pre Set-Off). The relevant Scheme Company will make payment in full to its Scheme Creditors in respect of their Final Determined Claims as soon as reasonably practicable, after the determination of each such Final Determined Claim. The Scheme Companies may, at their discretion, if requested by a broker or agent who has provided written evidence to the Scheme Company of his/her authority to act on behalf of a Scheme Creditor, and provided no notice is received by that Scheme Company to the contrary from such Scheme Creditor, make payments to the broker or agent in respect of the Scheme Creditor's Final Determined Claim. Payment in full by a Scheme Company to a Scheme Creditor, or any broker or agent duly authorised by the Scheme Creditor to receive such payment, in respect of any Final Determined Claim will be full and final settlement of such Final Determined Claim and the Scheme Company will have no further Liability to that Scheme Creditor in respect of the relevant Final Determined Claim. Payments will be made by way of electronic funds transfer at the expense of the relevant Scheme Company, to a bank account specified by the Scheme Creditor. Alternatively, if requested to do so by the Scheme Creditor, the Scheme Company may, at its expense, make payments by cheque and send payment by post. The dispatch of cheques and payments made by way of electronic funds transfer will constitute a full discharge of a Scheme Company's Liability to Scheme Creditors in respect of Claims. If a payment to a Scheme Creditor is uncashed or otherwise unclaimed by the intended payee the unclaimed monies will be dealt with by the Scheme Company in accordance with the Unclaimed Money Act 1995 (NSW). However, each Scheme Company retains a sole discretion to re-issue relevant payment instructions or unpaid cheques in respect of the unclaimed amount up to and including the date that the Schemes are terminated. Broker funding

Brokers are asked to notify all potential Scheme Creditors, of whom they are aware, of the proposed Schemes, and to advise them to submit their Claim Forms by the Claims Submission Date. Some brokers may have made payments to Scheme Creditors in respect of Claims against, or premiums due from, the Scheme Companies. Where that funding took place otherwise than at the request of, or under a contractual obligation to, the Scheme Creditor, the broker will only be entitled to claim from the Schemes, in respect of the funded amount, if it provides evidence of the assignment to it of the funded Claim, or written confirmation from the policyholder that the broker may claim in its place, in respect of the funded Claim. Brokers should provide such evidence or written confirmation at the time of submitting the Claim Form. Extension of time limits

Each Scheme Company may, at its absolute discretion, extend any time period referred to in the Schemes (other than the Claims Submission Date and the Long Stop Date) in relation to the determination of Final Determined Claims or payments to Scheme Creditors except for any time period in relation to the Dispute Resolution Procedure, which may only be extended at the sole discretion of the Scheme Adjudicator. Reversion to run-off

A Scheme Company may terminate its Scheme at any time on or before the 90th day after the Claims Submission Date, by giving a Termination Notice to APRA and its Scheme Creditors, if it determines that, in the judgement of the directors of the relevant Scheme Company acting reasonably and taking into account the level at which they reasonably consider Claims may ultimately be agreed or otherwise determined in accordance with the relevant Scheme, the total Claims submitted by Scheme Creditors on, or prior to, the Claims Submission Date (or treated as so submitted), are materially in excess of the outstanding Claims Liability of NRG Victory or the Australian branch of NRG London, (as the case requires), as at 31 December 2005, as disclosed in this Scheme Booklet. If a Scheme Company decides to terminate its Scheme in this way: it will send notice to that effect to all of its Scheme Creditors and advertise that notice in the same publications in which the Scheme Meeting was advertised (to the extent reasonably possible);

Agreed Claims (Pre Set-Off) which have not yet become Final Determined Claims shall cease to be binding on both the Scheme Creditor and that Scheme Company;

Final Determined Claims (which have not been paid) will remain binding on the Scheme Company and Scheme Creditor concerned (and will, therefore, remain payable, if not already then paid), unless the Scheme Creditor elects otherwise by written notice to the Scheme Company, within 30 days after the Termination Notice. In this case, the Final Determined Claim will cease to be binding on both the Scheme Company and the Scheme Creditor; and

Final Determined Claims which have been paid under the relevant Scheme at the date of the Termination Notice, will not be disturbed and will remain fully and finally settled.

The Scheme Adjudicator under the Scheme will initially be Mark Moyes, a director of 3 red Pty Ltd, whose powers, duties, functions and rights are conferred upon him by the Schemes. The Scheme Adjudicator will deal with Disputed Claims in accordance with the Dispute Resolution Procedure. A copy of Mark Moyes' curriculum vitae, describing his qualifications and experience, is set out in Section 10.7. The Scheme Adjudicator will act as an independent expert, and not as an arbitrator, and his specific function will be to adjudicate any Disputed Claim and/or Disputed Set-Off or Deduction referred to him, in accordance with the terms of the applicable Scheme. To assist him in this regard, the Scheme Adjudicator will be entitled to engage such appropriate professional advisers as he considers necessary. Each Scheme obliges the Scheme Adjudicator to notify any conflicts of interest he may have, to the relevant Scheme Company. It also provides for the appointment of an alternate Scheme Adjudicator to deal with any Claims where conflicts of interest have arisen. Each Scheme provides that any such appointment should be made in consultation with the particular Scheme Creditor. Scheme Creditors will not be entitled to challenge acts done, or omitted to be done, in good faith, and with due care, by the Scheme Adjudicator in performing his duties or functions under the Schemes. Further, the Scheme Adjudicator will not be liable for any loss of a Scheme Creditor unless such loss is attributable to his negligence, wilful default, wilful breach of duty or trust, fraud or dishonesty. The Scheme Actuary

The Scheme Actuary for the Schemes will be Scott Collings of Finity Consulting Pty Limited, whose powers, duties, functions and rights are conferred upon him by the Schemes. Scott Collings is the approved actuary for the Australian branch of NRG London and NRG Victory. The Scheme Actuary will provide advice and assistance to the relevant Scheme Company and to the Scheme Adjudicator, (on behalf of the Scheme Companies), in respect of the valuation of Claims and the application of the Estimation Methodology. Scheme Creditors will not be entitled to challenge acts done, or omitted to be done, by the Scheme Actuary in performing his duties or functions under the Schemes, and the Scheme Actuary will not be liable for any loss of a Scheme Creditor unless such loss is attributable to his fraud or dishonesty. Accordingly, no Scheme Creditor shall bring or institute any proceedings, claims or complaints against the Scheme Actuary, save in the case of his fraud or dishonesty (or the fraud or dishonesty of his employees or delegates). Final implementation of the Schemes

Each Scheme will be finally implemented upon written confirmation by the relevant Scheme Company to the Scheme Adjudicator that: all Claims have been agreed or otherwise determined (unless reviewed under section 1321(a) of the Corporations Act to the extent the provision applies);

any act, omission or decision which a Scheme Creditor has sought to review and is reviewable under section 1321(a) of the Corporations Act has been finally reviewed or the time period for making claims under section 1321(a) of the Corporations Act has expired; and

all Final Determined Claims have been paid in full (or deemed satisfied in full).

Review of acts, omissions or decisions in respect of the Schemes

Under section 1321(a) of the Corporations Act, a person aggrieved by any act, omission or decision of a person administering a scheme of arrangement under Part 5.1 of the Corporations Act, may appeal to the Court in respect of the act, omission or decision. To the extent the provision applies, the Court has power to confirm, revise or modify the act, omission or decision, and make such orders as it thinks fit. As such, and despite anything in this Scheme Booklet to the contrary, the acts, omissions or decisions of persons administering the Schemes may be reviewable pursuant to section 1321(a) of the Corporations Act. Under the Federal Court (Corporations) Rules 2000 (Cth), an aggrieved person has 21 days after the date of the act, omission or decision appealed against, to lodge an application under section 1321 of the Corporations Act (although the Court has a discretion to extend that time). Assistance to be provided

During the implementation of the Schemes, Scheme Creditors must meet the reasonable requirements of the relevant Scheme Company, or the Scheme Adjudicator, in connection with the implementation of the Schemes. Similarly, a Scheme Company must meet the reasonable calls for assistance from the Scheme Adjudicator, in connection with the performance of his duties under a Scheme. Termination of the Schemes

On termination of a Scheme in respect of a particular Scheme Company, certain provisions of the particular Scheme will continue. These are specified in each Scheme. Scheme Costs

Except as set out in paragraph (b), all costs, charges, expenses and disbursements reasonably incurred by any of the Scheme Companies in connection with the negotiation, preparation and implementation of the Schemes and other costs incidental to the Schemes, will be paid in full by the Scheme Company concerned in the normal course;

Where a Claim is referred to the Scheme Adjudicator, the Scheme Adjudicator must before adjudicating the Claim:

advise the Scheme Creditor in writing that remuneration, costs, charges and expenses including the fees and expenses of any adviser or expert consulted by him, the Adjudication Costs, may be apportioned in part or full between the relevant Scheme Company and Scheme Creditor; and

provide to the Scheme Creditor an estimate of the Adjudication Costs including an estimate of the Scheme Creditor's portion of the Adjudication Costs.

Whilst a Scheme Company may, at the option of the Scheme Adjudicator, discharge the Adjudication Costs apportioned to the Scheme Creditor, the Scheme Creditor shall be obligated to reimburse the relevant Scheme Company, any amounts so discharged. The Scheme Company may, in its absolute discretion, deduct any amount to be paid by the Scheme Creditor to the Scheme Adjudicator, from the Scheme Creditor's Agreed Claim (Pre Set-Off). Governing Law and Jurisdiction

The Schemes will be governed by, and construed in accordance with, the laws of New South Wales, Australia, and the Scheme Creditors agree that the Court shall have jurisdiction to hear and determine any dispute which may arise out of the Scheme Booklet, or any provision of the Schemes. For such purposes, the Scheme Creditors and the Scheme Companies irrevocably submit to the non-exclusive jurisdiction of the Court. Corporate history of the Scheme Companies and the Scheme Business

Corporate history of NRG London and the Australian branch of NRG London and its Scheme Business

NRG London is an UK incorporated insurance company, which has ceased active underwriting, and is in run‑off. It is authorised by the Financial Services Authority to carry out, (but not to effect), contracts of general insurance. NRG London has a current variation of permission to allow it to effect contracts of general insurance solely for the purpose of accepting business from NRG Fenchurch Insurance Co. Ltd under a Part VII transfer. NRG London intends shortly to apply to cancel the variation of permission. NRG London is a direct, wholly owned, subsidiary of NRG Victory Holdings Limited, whose ultimate parent is ING Groep N.V., a Netherlands incorporated and listed entity. NRG London was incorporated on 20 May 1960, as London Reinsurance Company Limited (Company Registration No. 660030). Its name was changed to New London Reinsurance Company Ltd on 31 January 1961, and to NRG London Reinsurance Company Limited on 1 July 1975. NRG London (Australian branch)

NRG London established its Australian branch in September 1973. NRG London was registered as a foreign company in Australia under the precursor to the Corporations Act on 28 September 1973. It remains registered as a foreign company in Australia, under the Corporations Act. NRG London (Australian branch) does not have a separate legal personality to NRG London. Rather, for prudential and regulatory purposes, APRA requires NRG London to hold assets in Australia sufficient to meet its expected Australian Liabilities. APRA accordingly requires NRG London to maintain separate accounts in respect of its Australian operations. Those accounts depict the financial condition of a notional entity referred to as a "branch". As such, while it may be convenient to speak of NRG London (Australian branch) as if it were a separate legal entity, such references should be understood in the above context. NRG London (Australian branch) was an active reinsurer in the Australian market between 1974 and 1991 inclusive. NRG London (Australian branch) ceased writing business in Australia in 1991 and its treaties expired in 1992. NRG London (Australian branch) is only authorised by APRA under the Insurance Act 1973 to conduct insurance business in Australia for the sole purpose of discharging Liabilities under policies entered into prior to 18 June 2002. Its registered address in Australia is Level 21, Tower Building, Australia Square, 264 George Street, Sydney, New South Wales, 2000, Australia. The business of NRG London (Australian branch), can be identified as a result of the relevant Reinsurance Contract being either: described on its face as being signed or executed for and on behalf of "NRG London Reinsurance Company Limited Australian Branch"; and/or

signed or executed on behalf of NRG London adjacent to a stamp headed "NRG London Reinsurance Co. Ltd Australian Branch".

The reinsurance business written by NRG London (Australian branch) falls primarily into three categories: proportional treaties;

The NRG London (Australian branch) Scheme relates to all non-life business written by the Australian branch of NRG London anywhere in the world since its authorisation to carry on an insurance business in Australia, in 1974. From 1974 to 1983, NRG London (Australian branch) underwrote predominantly property proportional reinsurance contracts which were short tail in nature. From 1983 to 1991, NRG London (Australian branch) wrote, in addition to the property proportional accounts, non-proportional liability contracts. These contracts were higher layer business, protecting general third party portfolios, as well as statutory classes of business, such as compulsory motor vehicle third party and workers compensation. NRG London's (Australian branch) long-tail excess of loss business incorporates the following major classes: compulsory third party;

public liability, including public and product liability and professional indemnity.

NRG London (Australian branch) also participated as a member of ANIP. The pool manager, ANIP Pty Ltd, has provided a list of the policyholders with outstanding claims. NRG London's (Australian branch) share of those Claims as at 31 December, 2005, amounted to AUD $22.00. The contractual relationship between the underwriting agent (or pool manager), and the pool members in such a situation, is that of principal and agent: the underwriting agent accepts business on behalf of each of the pool members individually, so that each member is bound only to the extent of the line written on his behalf, pursuant to the terms of the agency or pool agreement. In the period since 1991, the Australian branch of NRG London has been in run-off, and has actively commuted either individual claims, treaties or entire relationships with ceding companies. Financial Position of NRG London and NRG London (Australian branch) as at 31 December 2005

The financial position of NRG London as at 31 December 2005 was as follows: ASSETS Company Australian branch Ł'000 (1) A$000 (2)

Investments Investments in group undertakings 9,665 Other financial investments 127,184 Deposits with ceding undertakings 3

Reinsurers' share of technical provisions Claims outstanding 16,479 0

Debtors Debtors arising out of reinsurance operations 8,958 0 Other debtors 1,092 406

Other assets Cash at bank and in hand 1,073 1,781

Accrued income Accrued interest 367 402

Capital and reserves Called up share capital 59,500 Share premium account 500 Revaluation reserve 1,165 Profit and loss account (4,878)

Shareholders' funds attributable to equity interests 56,287 14,110

Technical provisions Claims outstanding 99,492 7,032

Deposits received from reinsurers 212 0

Provisions for other risks & charges 85 0

Creditors Creditors arising out of reinsurance operations 3,298 69 Other creditors 5,413 110

Accruals and deferred income 34 179

Notes: (1) Figures as per the audited financial reports of NRG London for the year ended 31 December 2005, and prepared in accordance with the accounting policies and principles set out in those financial reports. (2) Figures as per the statutory return provided by NRG London (Australian branch), to APRA, for the year ended 31 December 2005. Note that the figures for NRG London are presented in Pound Sterling, and the figures for NRG London (Australian branch) in Australian Dollars. The Reserve Bank of Australia website indicates that the official Pound Sterling/Australian Dollar exchange rate as at: 30 December 2005 was 0.4246; 30 June 2006 was 0.4049. In particular, the total assets of NRG London (Australian branch) totalling A$21,321,000 as at 31 December 2005, greatly exceed the total liabilities of NRG London (Australian branch) totalling A$7,211,000. In relation to the Claims outstanding of NRG London (Australian branch) as at 31 December 2005, this amount is supported by an Actuarial Valuation of Insurance Liabilities as at 31 December 2005, prepared by Scott Collings of Finity Consulting Pty Limited in accordance with the APRA General Insurance Prudential Standard, GPS210. Mr Collings is the Scheme Actuary and the approved actuary of NRG London (Australian branch). In making his estimate of outstanding Claims, the Scheme Actuary adopted the following principles: estimates include allowance for the cost of both reported and IBNR Claims; valuation results at 31 December 2005, include an adjustment to allow for the fact that the valuation results are based on data at 30 November 2005; estimates have been made gross of retrocession recoveries only; all amounts include allowance for future Claims inflation, however, due to the methods adopted, an explicit rate is not identified; the discounted results have been discounted at a rate of 5.4% per annum (5.2% previously); this rate has been chosen based on an empirical analysis of the yield curve for Government Bonds as at 22 December 2005, comparing the yield and the duration of the underlying liability payments; and allowance has been made for the future expenses involved in running off the NRG London (Australian branch) portfolio equal to 22.5% of gross liabilities (25.0% previously). As at 31 December 2005, NRG London's (Australian branch) solvency coverage was 2.87. During the course of its investigation, Finity Consulting Pty Limited did not identify any issues that it believes could materially adversely impact on NRG London (Australian branch's) policyholders. No material adverse change in the financial position of NRG London and NRG London (Australian branch)

There has not been any material adverse change in the financial position of NRG London and NRG London (Australian branch), since 31 December 2005. Intentions of NRG London (Australian branch) following NRG London (Australian branch) Scheme

If the NRG London (Australian branch) Scheme becomes effective, then on completion of the Scheme, NRG London (Australian branch) intends to apply to APRA for the revocation of its authorisation under the Insurance Act 1973, and to return any surplus assets to NRG London. Corporate history of NRG Victory and its Scheme Business

NRG Victory was incorporated in Victoria under the precursor to the Corporations Act on 26 November 1956 and its registration was transferred to New South Wales effective 2 August 1985. It was initially called The Victory Reinsurance Company of Australia Ltd but changed its name to NRG Victory Australia Limited on 11 December 1991. NRG Victory is only authorised by APRA under the Insurance Act 1973 to conduct insurance business in Australia for the sole purpose of discharging liabilities under policies entered into prior to October 1993. Its current registered office is located at Level 21, Tower Building, Australia Square, 264 George Street, Sydney, New South Wales, 2000, Australia. NRG Victory was originally located in Melbourne, Victoria, but transferred its head office to Sydney in 1987. Operations NRG Victory

The reinsurance business written by NRG Victory falls primarily into the following categories: proportional treaties;

The NRG Victory Scheme relates to all non-life insurance business written by NRG Victory since its incorporation in 1956, anywhere in the world. The Scheme does not relate to any reinsurance contracts which were transferred by way of a scheme in accordance with Division 9 of the Life Insurance Act 1945 to Life Reinsurance of Australasia Ltd (now Hannover Life Re of Australasia Ltd) in 1993, in accordance with the provisions of the Life Insurance Act 1945. Upon transfer, these reinsurance contracts effectively ceased to be a Liability of NRG Victory. NRG Victory wrote both life insurance and reinsurance and non-life reinsurance. Between 1970 and 1974, NRG Victory accepted non-life risk in South East Asia. This business was discontinued in 1974 with the underwriting being assumed by a related company. In 1986, NRG Victory established a branch in New Zealand. This branch was closed in 1996. In 1993, the underwriting activities of NRG Victory were affected by the cessation of underwriting activities at a NRG group level. Initially, it was expected that NRG Victory could be sold as a composite company, writing both life and non-life business. However, attempts to sell NRG Victory were unsuccessful. As a result, in late 1993, the life business was transferred by way of scheme prepared in accordance with Division 9 of the Life Insurance Act 1945, into a new company, and NRG Victory's non-life portfolio was put in run-off. In 1994, the new life subsidiary was sold to the Hannover Rückversicherung AG (50%) and E&S Rückversicherung (50%)and the administration of NRG Victory, which was now a pure non-life reinsurer, was transferred to Littlewood Services Pty Limited. NRG Victory also participated as a member of ANIP. The pool manager, ANIP Pty Ltd, has provided a list of the policyholders with outstanding claims. NRG Victory's share of those Claims as at 30 June, 2005, amounted to nil. The contractual relationship between the underwriting agent (or pool manager) and the pool members in such a situation is that of principal and agent: the underwriting agent accepts business on behalf of each of the pool members individually, so that each member is bound only to the extent of the line written on his behalf, pursuant to terms of the agency or pool agreement. In the period since 1994, NRG Victory has actively commuted either individual claims, treaties or entire relationships with ceding companies. Financial Position of NRG Victory

The audited balance sheet of NRG Victory as at 31 December 2005 discloses: 2005 A$'000 (1) ASSETS Current assets Cash and cash equivalents 2,232 Receivables 133 Financial assets at fair value through profit or loss 0 Reinsurance and other recoveries receivable 2,200 Other assets 765 5,330

Non-current assets Financial assets at fair value through profit or loss 40,365 Reinsurance and other recoveries receivable 659 Deferred tax assets 914 41,938 Total assets 47,268

LIABILITIES Current liabilities Payables 888 Outstanding claims liability 4,137 5,025

Non-current liabilities Deferred tax liability 229 Outstanding claims liability 7,651 7,880

Total liabilities 12,905

Net assets 34,363

Capital and reserves attributable to the company's equity holders Share capital 10,000 Retained earnings 24,363

Total equity 34,363

Notes: (1) Figures as per the audited financial reports of NRG Victory for the year ended 31 December 2005, and prepared in accordance with the accounting policies and principles set out in those financial reports. In particular the total assets of $47,268,000 as at 31 December 2005, greatly exceeded total liabilities of $12,905,000. Of the $40,365,000 financial assets of NRG Victory as at 31 December 2005, these are comprised of Commonwealth Government, State Government and bank debt securities (except for $2,490,000 of other debt securities). In relation to the outstanding Claims of NRG Victory as at 31 December 2005, this amount is supported by an Actuarial Valuation of Insurance Liabilities as at 31 December 2005, prepared by Scott Collings of Finity Consulting Pty Limited in accordance with the APRA General Insurance Prudential Standard, GPS210. Mr Collings is the Scheme Actuary who is also the approved actuary of NRG Victory. In making his estimate of outstanding Claims, he adopted the following principles: estimates include allowance for the cost of both reported and IBNR Claims; valuation results at 31 December 2005, include an adjustment to allow for the fact that the valuation results are based on data at 30 November 2005; estimates have been made gross of retrocession recoveries and a separate estimate of anticipated recoveries has been made; all amounts include allowance for future Claims inflation, although due to the methods adopted, an explicit rate is not identified; estimates for the non-proportional accident long tail class have been discounted at a rate of 5.4% per annum (5.3% previously). This rate has been chosen based on an empirical analysis of the yield curve for Government Bonds as at 22 December 2005, (the date results were finalised) comparing the yield and the duration of the underlying liability payments; allowance has been made for future Claims management expenses involved in running off the NRG Victory portfolio of $2.06 million (discounted). This is equivalent to 27.6% of gross liabilities (12.3% previously); all estimates in the report are net of GST and GST recoveries; and estimates have been prepared in accordance with the relevant standards (AASB1023, PS300, GN353 and GPS210). As at 31 December 2005, NRG Victory's capital adequacy multiple was 6.84. No material adverse change in the financial position of NRG Victory

There has not been any material adverse change in the financial position of NRG Victory since 31 December 2005. Intentions of NRG Victory following NRG Victory Scheme

If the NRG Victory Scheme becomes effective, then on completion of the Scheme, NRG Victory intends to apply to APRA for the revocation of its authorisation under the Insurance Act 1973, return any surplus assets to its shareholders, and either be voluntarily wound up or deregistered. Estimation Methodology

This Section has been prepared by Scott Collings, the Scheme Actuary for the proposed Schemes of Arrangement for NRG London (Australian branch) and NRG Victory. Scott Collings is also the approved actuary of the Scheme Companies. This Estimation Methodology applies equally to both Schemes. The purpose of the Section is to explain to the Scheme Creditors of each Scheme, the basis on which Claims under each Scheme should be presented, and how Claims will be assessed and determined by the Scheme Actuary. The Estimation Methodology provides guidance on the method in which Claims should be presented by Scheme Creditors, and in particular, the supporting information that should be provided with the Claim Form. The speedy and equitable resolution of Claims will be assisted if Claims are presented in this way and if the assumptions used are considered by the Scheme Actuary to be on a Best Estimate basis. Types of Claim

The Estimation Methodology, and the requested supporting information, varies according to the type of Claim as follows: • Property damage Claims - see Section 5.4; • Liability Claims from specific incident (eg a motor accident) - see Section 5.5; • Liability Claims from latent injury (eg asbestos related disease) - see Section 5.6. The three methodologies are applicable whether the Claim is under a proportional treaty, excess of loss treaty or facultative arrangement. If a Scheme Creditor believes it has a Claim under the Scheme that is not covered by one of these categories, the relevant Scheme Company should be approached to seek further advice from the Scheme Actuary. Jurisdiction of exposure

The Schemes apply to all Reinsurance Contracts issued by the Scheme Companies (other than Excluded Liabilities). The vast bulk of the Scheme Creditors are located in Australia and to a lesser extent, New Zealand and the Pacific Islands. The Estimation Methodology therefore applies to Claims arising from Reinsurance Contracts in Australia, New Zealand and the Pacific Islands. If a Scheme Creditor believes there is a Claim under the Scheme arising in a different jurisdiction (especially relating to inwards reinsurance from the London Market or the United States), the Scheme Company should be approached to seek further advice from the Scheme Actuary. The Estimation Methodology has been prepared so as to set out the type of information and the approach the Scheme Company and the Scheme Actuary would expect Scheme Creditors to follow in calculating and justifying Claims. It does not, however, preclude Scheme Creditors from using other projection techniques, so long as these techniques are shown to be robust and they use assumptions that can be reasonably justified by the Scheme Creditor. It similarly does not preclude the Scheme Actuary from using an alternative estimation methodology, should individual claim circumstances warrant such an approach. Property damage Claims

Methodology Claims for Property damage may arise under a range of Reinsurance Contracts (including property per risk, property catastrophe, property proportional or liability treaties (in the case of liability treaties indexation would not apply). Property damage Claims will be settled on the following basis: the Best Estimate of the outstanding cost of the underlying claim (ground-up loss), taking account of disputes over Liability;

no allowance should be made for future Claim inflation and no discounting for the time value of money;

the Best Estimate of the ground up loss should be applied to the reinsurance program in order to estimate the Scheme Company's share after allowance for the Scheme Company's participation in the treaty; and

the Best Estimate of the ground up loss should be provided by the Scheme Creditor in sufficient detail to enable the Scheme Company to calculate reinstatement premiums where appropriate. Any Claim against the Scheme will be offset against any reinstatement premiums payable.

Supporting Information It will not usually be necessary to provide additional supporting information of an actuarial nature. However the following information should be provided: policy details as required by the Claim Form;

loss adjusters and/or lawyers' reports in respect of disputed underlying claims;

the amount being claimed under the Scheme by the Scheme Creditor from the Scheme Company.

This sub-section applies to Claims for personal injury. Most such Claims arise under excess of loss treaty reinsurance arrangements. It applies only to Claims where the incident giving rise to the Claim is a single incident occurring at a specific time. Latent injury claims are dealt with in section 5.6. Methodology Claims will be settled on a Best Estimate basis as follows: known Claims: the value of known Claims should be assessed individually based on the circumstances of the Claim. The ground-up Claim amount should be assessed as the Best Estimate value of the amount required to settle the Claim at the likely date of settlement;

IBNR Claims: in general, no payment will be made for IBNR Claims unless the Scheme Creditor can demonstrate a pattern of claim incidence that gives rise to a reasonable likelihood of IBNR Claims arising. If a Claim is to be submitted for IBNR Claims, then triangles should be provided of both ground-up and excess-of-loss Claim emergence (numbers and incurred amounts) along with the actuarial basis of IBNR estimation;

inflation: if inflation is allowed for in the Best Estimate then the rate of inflation should be 4% pa unless the Scheme Creditor can justify a different rate applicable to the nature of the Claim;

indexation: the supporting information should indicate whether the Reinsurance Contract is subject to indexation. If so, the basis of indexation should be specified and the original and current values of the index number provided. Future indexation of the treaty should be allowed for until the anticipated date of settlement. Future indexation should be at a rate appropriate to the basis of the index;

discounting: determination of the amount of the Claim should take into account the normal negotiated process of discounting the value of future expenses to be incurred by the claimant (such as future care costs) in recognition of the fact that the underlying claim is to be settled by way of immediate lump sum as opposed to by way of an ongoing stream of expense reimbursement. The Scheme Company will pay the amount of the Claim so agreed at face value provided the Scheme Creditor expects to settle the underlying claim prior to 30 June 2011. Where the settlement date of the underlying claim is expected to be some time after 30 June 2011, the Claim will be reduced by 5.5% per annum for the period between 30 June 2011 and the expected settlement date;

reinstatement: any reinstatement premium payable will be calculated on a basis consistent with the Claim amount and offset in the settlement calculation.

Supporting information In addition to the information requested on the Claim Form, supporting information should include: expert advice on Liability and quantum;

copy of the indexation agreement and index numbers;

explanation as to how and why the Best Estimate of the Claim amount differs from the most recent prior reserve advice to the Scheme Company;

if an IBNR Claim is being made then the Scheme Creditor should provide supporting analysis of the historical development of paid and incurred losses to the policies by underwriting and development year as well as the method and assumptions used to estimate the total Claim amount; and

the amount being claimed under the Scheme by the Scheme Creditor from the Scheme Company.

This sub-section applies to Claims arising from latent injuries such as asbestos related diseases. For convenience the Estimation Methodology is described in terms of asbestos related diseases, but if another injury type is applicable, the Estimation Methodology applies with the necessary changes in terminology. Methodology Latent injury Claims will be settled on the basis of the Best Estimate of the discounted present value of known and future Claims as follows: structure: the estimation should be derived from the best available projection of the underlying disease or injury process, before the application of insurance and reinsurance terms. The underlying projections should relate to both the number of persons injured and the average cost of Claims (if possible ground-up) plus costs;

inflation: the underlying average cost of Claims should be projected from current expected levels using inflation of 6% pa (representing 4% wage inflation and 2% superimposed inflation) unless the Scheme Creditor has adequate justification for a different rate of Claim inflation;

Liability for Claims: the estimation method should allow for the likely sharing among defendants and insurers, the likely spread of costs over years of exposure and apportionment of reinsurance deductibles and limits according to an established methodology;

indexation: indexation of reinsurance arrangements should be allowed for, both from commencement to calculation date and from calculation date to expected Claim settlement date;

discounting: determination of the amount of the Claim should take into account the normal negotiated process of discounting the value of future expenses to be incurred by the claimant (such as future care costs) in recognition of the fact that the underlying claim is to be settled by way of immediate lump sum as opposed to by way of an ongoing stream of expense reimbursement. The Scheme Company will pay the amount of the Claim so agreed at face value provided the Scheme Creditor expects to settle the underlying claim prior to 30 June 2011. Where the settlement date of the underlying claim is expected to be some time after 30 June 2011, the Claim will be reduced by 5.5% per annum for the period between 30 June 2011 and the expected settlement date. To allow reasonable equity with the Claims described in Section 5.5 and to reduce complexity, the settlement date can be approximated by the Claim reporting date in the calculations.

Scheme of Arrangement made in Sydney on the Effective Date pursuant to section 411 of the Corporations Act Parties NRG London Reinsurance Company Limited (a company incorporated in England, with limited liability, registered as a foreign company under the Corporations Act, 2001 of Australia) ABN 77 001 160 792("Scheme Company") The Scheme Creditors ("Scheme Creditors") Operative provisions

1. The Scheme Company (a) The Scheme Company was incorporated in England (company number 660030) on 20 May 1960, as London Reinsurance Company Limited. (b) The Scheme Company's name changed to New London Reinsurance Company Limited on 31 January 1961, and on 1 July 1975, to NRG London Reinsurance Company Limited. (c) The Scheme Company established its Australian branch in September 1973, and it was registered as a foreign company under the precursor to the Corporations Act in Australia on 28 September 1973. (d) The Scheme Company ceased writing business through its Australian branch in 1991, and its authorisation under the Insurance Act1973, only permits it to carry on insurance business in Australia for the sole purpose of discharging liabilities under policies entered into prior to 18 June 2002.
2. Scheme The terms of the Scheme are set out in the Attachment to this document.
3. Accounting Claims Provision and Excluded Liabilities For the purposes of the Scheme and the Attachment: "Accounting Claims Provision" means $7,032,000. "Excluded Liabilities" means Liabilities under Reinsurance Contracts not written through the Australian branch of the Scheme Company. For this purpose, a Reinsurance Contract will be taken to have been written through the Australian branch only if the relevant Reinsurance Contract was: (a) described on its face as being signed or executed for and on behalf of "NRG London Reinsurance Company Limited Australian Branch"; and/or (b) signed or executed on behalf of NRG London adjacent to a stamp headed "NRG London Reinsurance Co. Ltd Australian Branch". NRG Victory Scheme

Scheme of Arrangement made in Sydney on the Effective Date pursuant to section 411 of the Corporations Act Parties NRG Victory Australia Limited (ABN 47 002 971 477) ("Scheme Company") The Scheme Creditors ("Scheme Creditors") Operative provisions

1. The Scheme Company (a) The Scheme Company was incorporated in Victoria under the precursor to the Corporations Act on 26 November 1956 and its registration was transferred to New South Wales effective 2 August 1975. It was initially called The Victory Reinsurance Company of Australia Ltd but changed its name to NRG Victory Australia Limited on 11 December 1991. (b) The Scheme Company is only authorised by APRA under the Insurance Act 1973 to conduct insurance business in Australia for the sole purpose of discharging liabilities under policies entered into prior to October 1993.
2. Scheme The terms of the Scheme are set out in the Attachment to this document.
3. Accounting Claims Provision and Excluded Liabilities For the purposes of the Scheme and the Attachment: "Accounting Claims Provision" means $11,788,000. "Excluded Liabilities" means Liabilities written under Reinsurance Contracts which were transferred to Life Reinsurance of Australasia in 1993, (now Hannover Life Re of Australasia Ltd ), under the Life Insurance Act 1945.

1. Definitions and interpretations 1.1 Definitions In the Scheme, unless the context otherwise requires or otherwise expressly provides, the following expressions shall have the following meanings: "Act" means the Corporations Act 2001 (Cth) of Australia. "Adjudication Costs" has the meaning given to that term in clause 4.6(j)(i). "Admissible Interest" means any interest provided for in a relevant Reinsurance Contract or any relevant statute. "Advance Payment" has the meaning given to that term in clause 3.2(b). "Agreed Claim (Pre Set-Off)" means the amount determined as being due in respect of a Scheme Creditor's Claim pursuant to clauses 4.5(b), 4.5(d), 4.5(e), 4.6(f) or 4.6(h) prior to set-off and relevant deductions in accordance with the relevant Scheme. "Agreed Paid Losses" means Paid Losses which the Scheme Company determines (in its sole discretion, by reference to its computer records) were due and payable but unpaid by it on the Effective Date. "ASIC" means Australian Securities and Investments Commission. "Authorised Insurer" means a general insurer authorised to conduct business in Australia under the Insurance Act 1973. "Bill Rate" for a period means the following rate (expressed as percentage per annum): (a) the average of the bid rates shown at or about 10:30 am (Sydney time), on page "BBSY" on the Reuters Monitor System, on the first day of that period, for a term of 360 days; or (b) if: (i) for any reason, the rate referred to at paragraph (a) of this definition is not displayed for a term equivalent to the relevant period, or such rate is no longer available; or (ii) in the opinion of the Scheme Company, the basis on which that rate is displayed is changed, and ceases to reflect the Scheme Company's cost of funding to the same extent as at the date of this document, then the rate determined by the Scheme Company to be the average of the buying rates quoted to the Scheme Company by three banks in the Australian market, as determined by the Scheme Company, at or about 10:30 am (Sydney time), on the first day of the relevant period for bills accepted by a leading Australian bank, and which have a term equivalent to the period. If the Scheme Company is unable to obtain three quotes, the Bill Rate will be the rate reasonably determined by the Scheme Company to be the appropriate equivalent rate, having regard to prevailing market conditions. "Board" means the board of directors of the Scheme Company from time to time. "Broker" means any broker who placed business with, or on behalf of, the Scheme Company or, if applicable, any successor to such a broker. "Business Day" means any day other than a Saturday, Sunday or public holiday on which banks are not generally open for business in Sydney. "Claim" means any claim against the Scheme Company (not being a claim in respect of Pre-Scheme Expenses or Scheme Costs) in respect of a Liability (other than an Excluded Liability), under, or in relation to, Scheme Business and to which the Scheme Company was subject at the Valuation Date, or to which the Scheme Company may become subject after the Valuation Date, by reason of an obligation incurred on, or before that date, including a claim for Admissible Interest. "Claim Form" means the document entitled "Claim Form" made available to Scheme Creditors and Known Brokers in accordance with the notices issued pursuant to clause 4.2(a), which Scheme Creditors are required to Submit prior to the Final Claims Submission Date, in order to have their Claims agreed or determined. "Court" means the Federal Court of Australia. "Creditors' Meeting" means the meeting of the Scheme Creditors of the Scheme Company convened for the purpose of considering and, if thought fit, approving the Scheme. "Default Interest" means interest payable pursuant to clause 4.14(b) in circumstances where the Scheme Company fails to make payment in full of a Scheme Creditor's Final Determined Claim within 90 days from (but not including) the date of such Final Determined Claim having been determined. "Delegate" means any person to whom the Scheme Actuary delegates any of his powers, rights, duties or functions under the Scheme. "Disputed Final Determined Claim Notice" shall have the meaning given to that term in clause 4.7(b)(ii). "Disputed Claim" means a Claim referred to the Scheme Adjudicator in accordance with clause 4.5(e), 4.5(f), 4.5(h) or 4.7(d). "Dispute Resolution Procedure" means the procedure for the adjudication of disputes by the Scheme Adjudicator set out in clauses 4.6, 4.7(d), 4.7(e) and 4.7(f). "Disputed Set-Off or Deduction" has the meaning given to that term in clause 4.7(b)(i). "Effective" where used in relation to the Scheme, means the coming into effect, pursuant to section 411(10) of the Act, of the order of the Court made under section 411(4)(b) of the Act. "Effective Date" means the date on which the Scheme becomes effective. "Employee" means, as the context shall admit, any partner in the same firm as the Scheme Actuary or any individual or corporate entity employed, whether under a contract of service or a contract for services, by that firm, by any company owned by that firm or the Scheme Actuary in connection with the performance or exercise of his powers, rights, duties or functions under the Scheme. "Estimation Methodology" means the method of estimation described at Section 5 to the Scheme Booklet. "Final Claims Submission Date" means 11:59 pm (Sydney time) on the 120th day after, but not including, the Effective Date (or, if such day is not a Business Day, the first Business Day thereafter). "Final Determined Claim" means the balance, if any, remaining due from the Scheme Company to a Scheme Creditor, following the deduction of those amounts referred to in clause 4.7(a). "Final Determined Claim Notice" shall have the meaning given to that term in clause 4.7(b). "Final Determined Claim Notification Date" shall have the meaning given to that term in clause 4.7(b). "Guidance Notes" means the guidance notes in respect of the Claim Form explaining how to access, obtain, complete, amend and submit a Claim Form, and the manner in which a Scheme Creditor may provide any supporting documentation to the Scheme Company. "IBNR Claims" means a Claim under a Reinsurance Contract based on Liabilities of the Scheme Company, in respect of losses which have been incurred but have not been reported to the Scheme Company, and which are subject to potential recoveries under a Reinsurance Contract with the Scheme Company. "Known Broker" means a Broker of whose involvement in placing and/or administering a Reinsurance Contract, the Scheme Company is aware. "Liability" means any debt or liability (being a liability to pay money or money's worth) of a person, whether it is present or future, certain or contingent, whether its amount is fixed or liquidated, or is capable of being ascertained by fixed rules or as a matter of opinion, including any liability under any enactment (in Australia or in any other jurisdiction), and any liability in contract, tort or bailment, or arising out of an obligation to make restitution or in any other manner whatsoever, provided that such expression does not include any debt or liability which is barred by statute under Australian law, or the law of any other jurisdiction, which applies to that liability or is otherwise unenforceable. For the avoidance of doubt, where any obligation or liability under a contract or policy is void or, being voidable, has been duly avoided, no obligation or liability shall arise in respect of such obligation or liability. "Long Stop Date" has the meaning given to that term in clause 4.5(h). "Notified Outstanding Claims" means a Claim under a Reinsurance Contract, based on Liabilities of the Scheme Company in respect of losses which have been notified to the Scheme Company, but have not become Paid Losses, and which are subject to potential recoveries under a Reinsurance Contract. "Paid Losses" means Liabilities of the Scheme Company, in respect of losses of a Scheme Creditor arising pursuant to Scheme Business, which have been notified to the Scheme Company and which are certain in amount. "Post" means delivered by hand (including by a generally recognised commercial courier service), pre-paid first class post, or air mail. "Pre-Scheme Expenses" means all costs, charges, expenses and disbursements reasonably incurred by the Scheme Company in connection with the promotion and preparation of the Scheme, including the costs of holding the Creditors' Meeting, and the costs of obtaining the sanction of the Court of the Scheme. "Proceedings" means any form of proceedings in any jurisdiction or forum including, without limitation, any legal proceedings, demand, arbitration, alternative dispute resolution procedure, judicial review, adjudication, mediation, execution, seizure, distraint, forfeiture, re-entry, enforcement of judgment or enforcement of any security or any step taken for the purpose of creating or enforcing a lien. "Property" means all forms of property (including money, goods, things in action, land and every description of property wherever situated), and every description of interest, whether present, future, vested or contingent, arising out of, or incidental to, property and including, for the avoidance of doubt, all contributions to the assets of the Scheme Company. "Reinsurance Contract" means any inwards contract, or a policy of insurance, reinsurance or retrocession of any kind whatsoever: (a) which has been entered into by, or on behalf of, the Scheme Company; or (b) in respect of which Liabilities arising thereunder have been assigned or otherwise novated to the Scheme Company (whether pursuant to statute or otherwise); or (c) under which the Scheme Company has any Liabilities for any other reason whatsoever. "Relevant Rate of Exchange" means the closing mid-market rate of exchange applying to a particular currency in respect of the currency into which it is to be converted, as quoted by the Reserve Bank of Australia on its website on the close of business on the last Monday of the calendar month prior to the month in which the conversion takes place, in accordance with clause 4.13(c). "Resolution Period" has the meaning given to that term in clause 4.7(d). "Reversion to Run-Off Date" has the meaning given to that term in clause 8.2(a). "Scheme" means, in respect of the Scheme Company, the scheme of arrangement pursuant to section 411 of the Act, in the form set out in this document with or subject to any modification, addition or condition approved or imposed by the Court. "Scheme Actuary" means Scott Collings of Finity Consulting Pty Limited, or such other person for the time being appointed as Scheme Actuary in accordance with clause 5.1(f). "Scheme Adjudicator" means Mark Moyes of 3 red Pty Ltd, or such other person for the time being appointed as Scheme Adjudicator in accordance with clause 6.1 or, where the context may admit, an alternate Scheme Adjudicator in accordance with clause 6.1(b). "Scheme Booklet" means the document bearing that title and dated the date hereof, explaining the effect of the Scheme to Scheme Creditors in compliance with section 412(1) of the Act and sent to Scheme Creditors in advance of the Creditors' Meeting. "Scheme Business" means all the Scheme Company's Reinsurance Contracts, excluding the Excluded Liabilities. "Scheme Costs" means: (a) all costs, charges, expenses, disbursements and other debts incurred by the Scheme Company in the course of implementing and carrying out the Scheme, and of complying with the provisions of the Act; and (b) insofar as they do not fall within (a), all costs, charges, expenses and disbursements incurred by the Scheme Company, and the remuneration of the Scheme Actuary and the Scheme Adjudicator, to the extent that such costs, charges, expenses, disbursements and remuneration are referable to the implementation of the Scheme. "Scheme Creditor" means a creditor of the Scheme Company in respect of a Claim. "Scheme Period" means the period beginning on the Effective Date and ending on the Termination Date. "Submit" means duty to complete and submit a Claim Form to the Scheme Company (in accordance with the instructions thereon) whether by email, by facsimile or by Post, and "Submitted" and "Submitting" shall be construed accordingly. "Tax" means any form of taxation, levy, deduction, duty, charge, contribution, withholding, or impost of whatever nature (including any related fine, penalty, surcharge or interest) imposed, collected, assessed or withheld by, or payable to, a Tax Authority. "Tax Authority" means any government, state, municipality, or any local, state, federal or other fiscal, revenue, customs or excise authority, body or official, anywhere in the world in relation to Tax (including, in Australia, without limitation, the Australian Taxation Office or any successor thereto). "Termination Date" has the meaning given to that term in clause 8.1. "Valuation Date" means 30 June 2006. 1.2 Interpretation In the Scheme, unless the context otherwise requires, or the Scheme expressly provides otherwise: (a) references to the Scheme include this Attachment; (b) references to "clauses" and "sub-clauses" are references to the clauses and sub-clauses, respectively, of the Scheme; (c) references to a "person" include an individual, firm, partnership, company, corporation, unincorporated body of persons or any state or state agency; (d) references to a statute or a statutory provision or to a statutory instrument or provision of a statutory instrument, include the same as subsequently modified, amended or re-enacted from time to time; (e) the singular includes the plural and vice versa and words importing one gender shall include both genders; (f) headings and subheadings of this Scheme are for ease of reference only, and shall not affect the interpretation of the Scheme; and (g) references to currency are to Australian currency. 1.3 Participation in the Scheme The Scheme Actuary and the Scheme Adjudicator have each consented to act in relation to the Scheme.
2. Purpose of Scheme (a) The purpose of the Scheme is to provide a procedure for the agreement, determination or adjudication, and satisfaction of Claims as early as practicable. (b) The Scheme shall apply to all Claims. The Scheme will not apply to any Excluded Liabilities.
3. The Scheme 3.1 Restraint on proceedings by Scheme Creditors (a) Without prejudice to clause 3.1(c), except with the prior express written consent of the Scheme Company, no Scheme Creditor shall be permitted to institute or continue, any Proceedings whatsoever against the Scheme Company or its Property, to establish the existence, or amount, of a Claim. (b) Except to the extent that the Scheme Company has failed to perform any obligation to make a payment to a Scheme Creditor under the provisions of the Scheme, no Scheme Creditor shall be entitled to institute or continue any Proceedings whatsoever against the Scheme Company, or its Property, to enforce payment in whole, or in part, of any Claim. (c) Nothing in the Scheme shall preclude the Scheme Company from commencing or continuing any Proceedings against a Scheme Creditor. For the avoidance of doubt, the relevant Scheme Creditor shall be entitled to assert and prosecute a Claim against the Scheme Company in such Proceedings provided that: (i) the relevant Claim arises out of a Reinsurance Contract that is the subject matter of the Scheme Company's Claim in the relevant Proceedings; and (ii) the relevant Claim does not require the presence of third parties over whom the court or tribunal in question cannot have jurisdiction for its adjudication. 3.2 Effect of breach of clause 3.1(a) restraint (a) If, and to the extent that, a Scheme Creditor obtains an order, judgment, decision or award of a court or tribunal against the Scheme Company in relation to a Claim in contravention of clause 3.1(a), such order, judgment, decision or award shall not give rise to an Agreed Claim (Pre Set-Off), and shall be disregarded when determining the Liability of the Scheme Company in respect of the relevant Claim. (b) If any Scheme Creditor takes any action after the Effective Date, which is prohibited by clause 3.1(a) or 3.1(b), it shall, without prejudice to any other rights of the Scheme Company, be treated as having received an advance payment on account of its Claim, equal to the amount or gross value of any money, Property, benefit or advantage obtained by him at the expense of the Scheme Company as the result of such action (an Advance Payment) and the extent to which it is entitled to receive any payment under the Scheme in respect of its Final Determined Claim shall be determined accordingly. (c) For the purpose of clause 3.2(b), the gross value of any Advance Payment shall be conclusively determined by the Scheme Company and, without limitation, may include such amounts as the Scheme Company may consider to be appropriate by way of interest, costs, charges or expenses incurred by the Scheme Company as a consequence of the relevant Scheme Creditor acting in a manner prohibited by clause 3.1(a) or 3.1(b). (d) If the amount of an Advance Payment which a Scheme Creditor is treated as having received pursuant to clause 3.2(b) (such Advance Payment, if necessary, being converted at the Relevant Rate of Exchange into one or more of the currencies in which the Scheme Creditor has an Final Determined Claim), exceeds the total amount the relevant Scheme Creditor would otherwise be entitled to receive pursuant to the Scheme, then, without prejudice to any other rights of the Scheme Company, the Scheme Creditor shall immediately pay the excess to the Scheme Company, failing which interest shall accrue on such excess for the period from the date upon which the Scheme Creditor's Final Determined Claim is determined under the Scheme, to the date of payment of such excess, at the annual rate which is the Bill Rate applicable at the date of determination. Interest shall accrue from day-to-day for the duration of such period (from and including the first day thereof), and shall be calculated on the basis of the actual number of days elapsed and a 360-day year and shall be payable on the last day of such period. Such excess and interest shall be held on trust for the Scheme Company by the relevant Scheme Creditor until paid. 3.3 Interest (a) For the purpose of making payments under the Scheme, where a Claim includes an element of Admissible Interest, such Admissible Interest shall be payable for the period from the date provided for in the relevant Reinsurance Contract or statute, to the day immediately preceding the date on which payment is made in respect of the relevant Final Determined Claim. (b) No payment shall be made under the Scheme in respect of any part of a Claim which represents interest which is not Admissible Interest or Default Interest. (c) Any payment made under the Scheme in respect of any part of a Claim which represents Admissible Interest or Default Interest shall be made net of any necessary deduction or withholding for, or on account of, Tax.
4. Determination of Claims 4.1 Valuation Date All Claims shall be valued as at the Valuation Date, provided that any amounts paid by the Scheme Company or by any other person to the relevant Scheme Creditor in full or partial satisfaction of a Claim against the Scheme Company from the Valuation Date up to and including the Effective Date, shall be taken into account in calculating that Scheme Creditor's aggregate Final Determined Claim against the Scheme Company. 4.2 Notice of Effective Date and availability of Claim Forms (a) The Scheme Company shall, as soon as reasonably practicable, and in any event within 15 Business Days of the Effective Date, send by Post to: (i) each Scheme Creditor known to it as at the Effective Date and for whom it has a postal address; (ii) Known Brokers; and (iii) Authorised Insurers, the following documents: (iv) notice that the Scheme has become effective, confirming the Effective Date and the Final Claims Submission Date and calling for all Scheme Creditors to Submit their Claim Forms by the Final Claims Submission Date; and (v) a Claim Form. (b) In addition, the Scheme Company shall as soon as reasonably practicable, and in any event within 15 Business Days of the Effective Date, cause to be published in the same newspaper and publications in which the Creditors' Meeting was advertised or, if this should not prove possible, in such other publications as it shall deem appropriate, notice: (i) that the Scheme has become effective, giving the Effective Date; (ii) of the Final Claims Submission Date; and (iii) calling for all Scheme Creditors to Submit their Claim Forms by the Final Claims Submission Date. (c) Where the Scheme Company is notified of a Scheme Creditor or a Scheme Creditor's postal address after the Effective Date, but before the Final Claims Submission Date, the Scheme Company shall send, within 14 days of being so notified and, if practicable, prior to the Final Claims Submission Date, the relevant Scheme Creditor the information referred to in clause 0. 4.3 Completing Claim Forms (a) Each Scheme Creditor shall Submit with its Claim Form, information relating to its Claims as at the Valuation Date, by reference to each Reinsurance Contract in respect of Scheme Business pursuant to which the relevant Claims arise, together with such details as the Scheme Creditor may have of the Broker or Brokers who placed the relevant business. (b) The information provided by the relevant Scheme Creditor shall be provided separately for Claims which relate to Paid Losses, Notified Outstanding Claims and IBNR. In respect of: (i) (Paid Losses): Scheme Creditors shall provide with the Claim Form an analysis supporting each Claim in respect of Paid Losses, including (where relevant), but not limited to, loss bordereaux certified by the leading underwriter, and/or copies of loss reports from policyholders/cedants or their legal representatives to the Scheme Creditor; (ii) (Notified Outstanding Claims): Scheme Creditors shall provide on or with the Claim in respect of a Notified Outstanding Claim, including (where relevant), but not limited to, loss bordereaux certified by the leading underwriter and/or copies of loss reports from policyholders/cedants or their legal representative to the Scheme Creditor and/or closing statements in respect of agreed Claims not yet settled by the Scheme Creditor, for each Claim; and (iii) (IBNR): Scheme Creditors shall, insofar as is reasonably practicable, provide with the Claim Form, an amount for IBNR and details of the basis for the estimate for each Claim in respect of IBNR, and any relevant documentary evidence to show the reasonableness of such estimate, including (but not limited to): A. cumulative data triangles of paid loss data; and/or B. cumulative data triangles of incurred loss data; and/or C. cumulative data triangles of incurred loss ratios; and/or D. loss bordereaux certified by the leading underwriter; and/or E. copies of loss reports from policyholders/cedants to the Scheme Creditor; and/or F. any relevant actuarial reports; and/or G. any other supporting information. (c) Where it has sufficient information, the Scheme Company shall pre-complete each Claim Form sent to any Scheme Creditor known to it as at the Effective Date with its estimate of the Claims of the Scheme Creditor (other than in respect of IBNR). Scheme Creditors shall not be required to Submit a Claim Form, or provide any additional supporting information, in respect of such amounts. For the avoidance of doubt, only amounts which have been pre-completed by the Scheme Company on the relevant Scheme Creditor's Claim Form are "Agreed Paid Losses" for the purposes of clause 4.4(c). If a Scheme Creditor wishes to receive payment in respect of any other Claims, it must submit a Claim Form in respect of such Claims, prior to the Final Claims Submission Date. (d) In respect of each Reinsurance Contract, the Scheme Creditor shall also provide details of: (i) all Liabilities owed by it to the Scheme Company in relation to such Reinsurance Contract; and (ii) all reinstatement premiums paid or payable in relation to such Reinsurance Contract. (e) Subject to clause 4.4(b), a Claim Form must be Submitted to the Scheme Company on, or before, the Final Claims Submission Date. Except as provided for in clause 4.3(f), the information contained in the Claim Form shall be binding on the Scheme Creditor as to the matters referred to therein. (f) Each Scheme Creditor shall be entitled to Submit a new or revised Claim Form and to provide revised or further information in respect of its Claims, together with any relevant supporting documentation (as contemplated by clause 4.3(e)), to the Scheme Company in each case so as to reach the Scheme Company: (i) any time on or before the Final Claims Submission Date; or (ii) prior to the date on which it has been notified in accordance with clause 9.4 that the relevant Claim has become an Agreed Claim (Pre Set-Off), whichever is the earlier. (g) Where a Scheme Creditor Submits more than one Claim Form or Submits an amended Claim Form in accordance with this clause, the Scheme Company shall only consider the Claim Form or the version of the Claim Form last Submitted. (h) A Scheme Creditor may, by placing a tick in the relevant box on the Claim Form and then Submitting that Claim Form, elect to incorporate into its Claim Form, the Claims information contained in its proxy and voting form which it submitted to the Scheme Company for the purpose of voting at the Creditors' Meeting. A Claim Form will only validly incorporate the Claims information contained in, or supplied with, the said proxy and voting form pursuant to this clause, if the Claims information sections of the Claim Form are left blank by the Scheme Creditor. The provisions of this clause are without prejudice to the Scheme Creditor's rights under clause 4.3(f). (i) Determination of the amount of the Claim should take into account the normal negotiated process of discounting the value of future expenses to be incurred by the claimant (such as future care costs) in recognition of the fact that the underlying claim is to be settled by way of immediate lump sum as opposed to by way of an ongoing stream of expense reimbursement. The Scheme Company will pay the amount of the Claim so agreed at face value provided the Scheme Creditor expects to settle the underlying claim within five years of the Valuation Date. Where the settlement date of the underlying claim is expected to be beyond five years of the Valuation Date, the Claim will be reduced by 5.5% per annum for the period between five years of the Valuation Date and the expected settlement date. 4.4 Failure to return Claim Forms (a) Subject to clauses 4.3(c), 4.4(b) and 4.4(c), no Scheme Creditor shall be entitled to claim under, or receive any payment under, the Scheme in respect of a Claim, unless that Claim has been notified to the Scheme Company by the Scheme Creditor by means of a Claim Form Submitted to the Scheme Company no later than the Final Claims Submission Date. (b) The Scheme Company may, in its absolute and sole discretion, allow a Claim Form that was not Submitted on or before the Final Claims Submission Date, to be determined in accordance with the provisions of the Scheme as if that Claim Form had been Submitted on or before the Final Claims Submission Date. (c) If a Scheme Creditor has not Submitted a Claim Form on or before the Final Claims Submission Date, that Scheme Creditor's Claim will be valued at the Agreed Paid Losses, if any. To the extent that there are no Agreed Paid Losses, the Scheme Creditor's Claim shall be valued at zero, and such Claim shall be deemed satisfied in full. For the avoidance of doubt, for the purpose of this clause, the Scheme Company's determination of the amount of Agreed Paid Losses shall be final and binding on the Scheme Company and the relevant Scheme Creditor, and there shall be no right of appeal in respect thereof, whether pursuant to the Scheme or otherwise. 4.5 Review of Claim Forms and determination of Agreed Claims (Pre Set-Off) (a) The Scheme Company will consider the information concerning a Scheme Creditor's Claims on its Claim Form including, but not limited to, consideration of whether any submissions are accurate and/or adequately supported with relevant documentation, whether any estimates in relation to future or contingent Claims are reasonable and have been calculated in accordance with the Estimation Methodology, and whether there is any applicable reinstatement premiumor set-off. (b) If the Scheme Company agrees with a Scheme Creditor's estimate of the value of any of its Claims as set out in its Claim Form, it shall, as soon as reasonably practicable, notify the relevant Scheme Creditor of such agreement in writing in accordance with clause 9.4. Such estimated value, together with any unpaid Agreed Paid Losses, shall be the Scheme Creditor's Agreed Claim (Pre Set-Off) in respect of each such Claim. (c) If the Scheme Company does not agree with the information provided on a Claim Form in respect of a Claim, it shall, as soon as reasonably practicable, notify the relevant Scheme Creditor in writing, in accordance with clause 9.4, that the Claim Form has not been agreed, and advise the Scheme Creditor in writing of those matters which are not agreed, the reasons for failing to agree to such matters, and any additional information that the Scheme Company may require to further consider the Claim. The Scheme Creditor shall provide such additional information no later than 30 days after deemed receipt (in accordance with clause 9.4(b)) of such a request. (d) If the relevant Scheme Creditor provides any additional information required pursuant to clause 4.5(c), within the time period set out therein, the Scheme Company will then endeavour to agree the disputed matters and the relevant Claim, as soon as reasonably practicable. In the event that the Claim is so agreed, the Scheme Company shall, as soon as reasonably practicable, notify the Scheme Creditor in writing of its agreement and of the amount of the Agreed Claim (Pre Set-Off). (e) If the relevant Scheme Creditor: (i) fails to provide any additional information required pursuant to clause 4.5(c) within the time period by that clause; (ii) provides inadequate or insufficient additional information (in the opinion of the Scheme Company); or (iii) does provide such additional information, but the Scheme Company is still unable to agree with the information on the Scheme Creditor's Claim Form, the Scheme Company may send the Scheme Creditor a copy of a Claim Form in relation to the relevant Claim, completed in such manner as it is prepared to accept, and inform the Scheme Creditor that, if it is rejected by the Scheme Creditor, it will refer the Claim to the Scheme Adjudicator as a Disputed Claim. If the Scheme Creditor wishes its Claim to be referred to the Scheme Adjudicator, it must give notice thereof to the Scheme Company, in accordance with clause 9.4, within 30 days of deemed receipt of the Scheme Company's communication. If such notice is received from the Scheme Creditor, the Scheme Company shall refer the relevant Claim to the Scheme Adjudicator as a Disputed Claim. If the Scheme Creditor does not respond to the communication from the Scheme Company within 30 days of deemed receipt of such communication, the Claim Form so completed by the Scheme Company, will be deemed to be determinative of the disputed matters and will form the basis of the Scheme Creditor's Agreed Claim (Pre Set-Off). (f) For the avoidance of doubt, notwithstanding any other provision of this clause, the Scheme Company shall, at any time, by notice to the Scheme Creditor concerned given in accordance with clause 9.4, be entitled to: (i) require the production by such Scheme Creditor of such further information, or such documentary or other evidence as it may reasonably require to assist it in agreeing the relevant Claim (in which case, the Scheme Creditor must produce such information within 30 days of deemed receipt of such notice and the provisions of clause 4.5(d) or 4.5(e) shall apply with the necessary changes being made); and (ii) upon notice to the relevant Scheme Creditor in accordance with clause 9.4, refer a Claim to the Scheme Adjudicator. (g) The amount of any Agreed Claim (Pre Set-Off) determined or agreed under clause 4.5(b), (d) or (e), shall be final and binding on the Scheme Company and the relevant Scheme Creditor and, subject to clause 4.16, there shall be no right of appeal in respect thereof.

(h) In the event that a Claim contained in a Claim Form Submitted in accordance with the requirements of clause 4.3, has not become a Final Determined Claim by 11:59 pm Sydney time on the day on which a period of 365 days from the Final Claims Submission Date elapses (the Long Stop Date) the Scheme Company shall within a further 7 days, refer such Claim to the Scheme Adjudicator as a Disputed Claim (unless, and on such terms as, both the Scheme Creditor and the Scheme Company shall otherwise agree). The Scheme Company shall send notice in writing in accordance with clause 9.4 to the Scheme Creditor concerned, that the Claim has become a Disputed Claim and has been referred to the Scheme Adjudicator and the provisions of clause 4.6 shall apply to such Disputed Claim. 4.6 Adjudicator dispute resolution procedure (a) In referring a Claim to the Scheme Adjudicator in accordance with clause 4.5(e), 4.5(f) or 4.5(h), the Scheme Company shall provide the Scheme Adjudicator with a copy of the Claim Form relating to such Claim (as Submitted by the Scheme Creditor and, where applicable, as amended by the Scheme Company), and a copy of any notice, statement or correspondence sent or received by the Scheme Company in connection with the Claim. The Scheme Adjudicator shall have access to all of the Scheme Company's records and information in the possession of, or under the control of, the Scheme Company, which the Scheme Adjudicator considers he needs to resolve the dispute concerning such Claim subject to any claim for legal professional privilege. (b) The Scheme Adjudicator shall consider the records and information sent to him in accordance with clause 4.6(a), and shall have regard to (but not be bound by) the Estimation Methodology, in relation to any Claim referred to him and, as soon as reasonably practicable, shall notify the Scheme Company and/or the Scheme Creditor concerned as to whether he requires: (i) further documents, data or information, in which case the relevant person shall, within 30 days after deemed receipt of such notice, provide the Scheme Adjudicator with the required documents, data or information; and/or (ii) the Scheme Company and/or the relevant Scheme Creditor to appear before him and address him on any matter he shall determine, in which case the Scheme Company and/or the relevant Scheme Creditor (or in either case its duly authorised representative) shall appear on such date, which shall be within 30 days after deemed receipt of such notice, and at such place as the Scheme Adjudicator shall prescribe. The Scheme Adjudicator shall be entitled to prescribe and lay down such procedures or provisions for the purposes of the appearance of the parties before him, as he, in his sole and absolute discretion, deems appropriate (including, without limitation, making provision for meetings via a video conferencing facility), and shall be entitled to call for such evidence, documents, data and information as he may require to assist him in reaching his decision. (c) At the request of a Scheme Creditor, the Scheme Adjudicator may attend a meeting with that Scheme Creditor to discuss its Claim. Any such meeting may take place in person or via a video conferencing facility, and the Scheme Adjudicator shall be entitled to travel to another jurisdiction in order to attend a meeting with a Scheme Creditor. (d) The Scheme Adjudicator may (but is not obliged to) extend any time period laid down by clause 4.6(b) as he thinks fit for any one, or more, or all, Disputed Claims. (e) The Scheme Adjudicator shall be entitled to consult with such advisers, including legal advisers and experts and actuaries from any relevant jurisdiction, as he may deem appropriate in considering any Claim referred to him. The Scheme Adjudicator will consider all documents, data or information Submitted by a Scheme Creditor in support of its Claim including details of relevant actuarial principles applying in other jurisdictions. (f) If any person concerned fails to provide further documents, data or information in accordance with clause 4.6(b)(i) above, or fails to appear before the Scheme Adjudicator in accordance with clause 4.6(b)(ii) above, the Scheme Adjudicator shall make such determination as he sees fit in relation to the relevant Disputed Claim on the basis of the information then available to him. (g) In adjudicating on any Disputed Claim, the Scheme Adjudicator shall act as an expert and not as an arbitrator. (h) The Scheme Adjudicator shall notify the relevant Scheme Creditor and the Scheme Company of his determination in respect of the relevant Disputed Claim, and of the resulting amount of the Scheme Creditor's Agreed Claim (Pre Set-Off), by notice given in accordance with clause 9.4, within 30 days after the later of: (i) receipt of the documents accompanying the reference of the Disputed Claim to him in accordance with clause 4.6(a); (ii) the provision of further documents, data or information to him pursuant to clause 4.6(b)(i); (iii) the conclusion of any appearance before him pursuant to clause 4.6(b)(ii); or (iv) the failure of the relevant party to provide such documents, data or information in accordance with clause 4.6(b)(i), or to appear before him in accordance with clause 4.6(b)(ii). (i) Any such determination shall, to the extent permitted by law and subject to section 1321(a) of the Corporations Act, be final and binding on the Scheme Company and the relevant Scheme Creditor, and neither the Scheme Creditor nor the Scheme Company shall have any right of appeal from such determination. Neither the Scheme Creditor, nor the Scheme Company, shall have any right to make any claim against the Scheme Adjudicator in respect of such determination, save in respect of his negligence, wilful default, wilful breach of duty or trust, fraud or dishonesty. (j) Notwithstanding clauses 6.2(b) and 6.3(c)(i), the Scheme Adjudicator must before adjudicating the Disputed Claim: (i) advise the Scheme Creditor in writing that remuneration, costs, charges and expenses incurred by the Scheme Adjudicator in respect of a Disputed Claim, including the fees and expenses of any adviser or expert consulted by him pursuant to clause 4.6(e) (the Adjudication Costs) may be apportioned between the Scheme Company and the Scheme Creditor in such proportions as the Scheme Adjudicator may determine in his absolute discretion and shall be paid in accordance with clauses 4.6(k) and 4.6(l), subject to section 1321(a) of the Corporations Act; and (ii) provide to the Scheme Creditor an estimate of the Adjudication Costs including an estimate of the Scheme Creditor's portion of the Adjudication Costs. Any costs, charges and expenses incurred by the relevant Scheme Creditor or by the Scheme Company shall be borne respectively by those parties. (k) The amount of the Scheme Company's share of such Adjudication Costs, calculated pursuant to clause 4.6(j), shall be paid out of the Property of the Scheme Company, in accordance with clause 6.2(b), as Scheme Costs. (l) The amount of the relevant Scheme Creditor's share of such Adjudication Costs calculated in accordance with clause 4.6(j) shall, at the Scheme Adjudicator's option, be either: (i) paid out of the Property of the Scheme Company in accordance with clause 6.2(b) as Scheme Costs, in which case: A. the Scheme Creditor shall pay the Scheme Company the amount so paid by the Scheme Company as soon as reasonably practicable; or B. at the option of the Scheme Company, the Scheme Company may deduct such amount from that Scheme Creditor's aggregate Agreed Claim (Pre Set-Off) when calculating its Final Determined Claim pursuant to clause 4.7; or (ii) paid by the Scheme Creditor to the Scheme Adjudicator directly. 4.7 Determination of Final Determined Claims (a) Subject to clause 4.13, following determination of the Agreed Claim (Pre Set-Off), in respect of all of a Scheme Creditor's Claims pursuant to clause 4.5(b), 4.5(d), 4.5(e), 4.6(f) or 4.6(h), the Scheme Company shall determine the Scheme Creditor's Final Determined Claim (which may be denominated in more than one currency) by: (i) deducting from the aggregate Agreed Claim (Pre Set-Off) any Advance Payments, any sum paid in accordance with clause 4.1 and any sum to be deducted pursuant to clause 4.6(l); and then (ii) deducting any reinstatement premium payable in accordance with the terms of the relevant Reinsurance Contract;and then (iii) applying any applicable set-off pursuant to clause 4.10. For the avoidance of doubt, if the balance of an account is in favour of the Scheme Company, then that amount will be payable by the Scheme Creditor to the Scheme Company and there shall be no Final Determined Claim in respect of which that Scheme Creditor may receive payment. (b) The Scheme Company shall notify the Scheme Creditor in writing in accordance with clause 9.4, of the value of its Final Determined Claim (the Final Determined Claim Notice) as soon as reasonably practicable (the Final Determined Claim Notification Date). Except in the case of manifest error, being an arithmetical or typographical error which is apparent on the face of the document concerned, a Scheme Creditor shall not be entitled to challenge the amount of the Final Determined Claim set out in the Final Determined Claim Notice, except where such challenge is: (i) in respect of the amount of any deduction or set-off determined by the Scheme Company under clause 4.7(a)(i), (ii) or (iii), in respect of the Scheme Creditor's Agreed Claim (Pre Set-Off) (the Disputed Set-Off or Deduction); and (ii) made by notice given in accordance with clause 9.4, within 30 days of the Final Determined Claim Notification Date (the Disputed Final Determined Claim Notice). Where no such challenge is made within this 30 day period, the Scheme Company's valuation shall be deemed to have been accepted by the Scheme Creditor and shall constitute such Scheme Creditor's Final Determined Claim. (c) If a Scheme Creditor wishes to challenge the value of the Disputed Set-Off or Deduction, the Scheme Company has attributed to its Final Determined Claim in accordance with clause 4.7(b), it shall, within 30 days of the Final Determined Claim Notification Date, issue the Disputed Final Determined Claim Notice to the Scheme Company, which notice shall set out in writing those matters which are not agreed and the reasons for failing to agree such matters and provide any relevant additional information to support its position. The Scheme Company and the Scheme Creditor shall endeavour to agree the disputed matters and the relevant Final Determined Claim set-off or deduction, if any, as soon as reasonably practicable. In the event that a set-off or deduction is agreed between them, the Scheme Company shall provide the relevant Scheme Creditor with written confirmation, in accordance with clause 9.4, of the agreed valuation of its Final Determined Claim, taking into account the agreed set‑off or deduction, and such valuation shall constitute the Scheme Creditor's Final Determined Claim for the purposes of the Scheme. (d) If the disputed matters and the relevant Final Determined Claim are not resolved between the Scheme Creditor and the Scheme Company within 30 days of the date of the Disputed Final Determined Claim Notice, the Resolution Period, the Scheme Creditor may, no later than 30 days after the end of the Resolution Period, notify the Scheme Company in writing that it wishes the valuation of the Disputed Set-Off or Deduction to be referred to the Scheme Adjudicator. If such notification is received from the Scheme Creditor, the Scheme Company shall refer the matter to the Scheme Adjudicator as a Disputed Claim. If the Scheme Creditor does not issue a request for the value of its Disputed Set-Off or Deduction to be adjudicated before the expiry of that 30 day period, the last value attributed to the Final Determined Claim by the Scheme Company shall be deemed to have been accepted by the Scheme Creditor, and shall constitute its Final Determined Claim. (e) The Scheme Adjudicator's adjudication of Final Determined Claims shall be conducted in accordance with the Dispute Resolution Procedure set out in clause 4.6, which provisions shall apply with the necessary changes being made except that the information initially provided to the Scheme Adjudicator by the Scheme Company in accordance with clause 4.6(a), shall consist of documentation evidencing the value of, the Disputed Set-Off or Deduction, together with a copy of any statement, notice, correspondence or documentation sent or received by the Scheme Company in relation to the valuation of the Scheme Creditor's Disputed Set-Off or Deduction. (f) In determining the value of a Scheme Creditor's Disputed Set-Off or Deduction in accordance with clause 4.7(e) above, the Scheme Adjudicator shall take into account the Scheme Creditor's share (if any) of the Adjudication Costs described in clause 4.6(j). (g) The value of a Scheme Creditor's Disputed Set-Off or Deduction, determined in accordance with clauses 4.7(a) to 4.7(f) shall, to the extent permitted by law, including section 1321(a) of the Act, be binding on the relevant Scheme Creditor and the Scheme Company as the amount of that Scheme Creditor's Disputed Set-Off or Deduction, and by virtue of its deduction from the Agreed Claim (Pre Set-Off), its Final Determined Claim, and there shall be no right of appeal in respect thereof. 4.8 Extension of time limits Except in respect of the Final Claims Submission Date, and the Long Stop Date, the Scheme Company may, at its absolute and sole discretion, extend any time period referred to in clause 4 (except for any time period set out in clause 4.6 which, in accordance with clause 4.6(c), shall be extended at the sole and absolute discretion of the Scheme Adjudicator), for any one or more of its Scheme Creditors and whether in respect of any one, or more, or all of such Scheme Creditor's Claims against it. 4.9 Scheme Creditors to provide assistance (a) During the Scheme Period, Scheme Creditors shall provide the Scheme Company and/or the Scheme Actuary, and/or the Scheme Adjudicator, with all reasonable assistance required by any of them in connection with the Scheme, and shall provide such assistance as they may reasonably require in connection with the recovery of any Property, or the enforcement of any obligations, owed to the Scheme Company. (b) The Scheme Company shall provide the Scheme Actuary and/or the Scheme Adjudicator with all reasonable assistance required by them in connection with the Scheme. 4.10 Set-off (a) Where a Scheme Creditor owes a Liability to the Scheme Company in respect of any Reinsurance Contract (including, for the avoidance of doubt, where such Liability is contingent and/or prospective), an account shall be taken of the sums due from the relevant Scheme Creditor to the Scheme Company and from the Scheme Company to that Scheme Creditor, in relation to such Scheme Business. Sums (including contingent or prospective sums) owing by a Scheme Creditor to the Scheme Company in respect of the Scheme Business, will be set-off against sums owing by the Scheme Company to that Scheme Creditor in respect of Scheme Business. For the avoidance of doubt, pursuant to this clause, sums owing by a Scheme Creditor to the Scheme Company in respect of the latter's Scheme Business shall include, without limitation, sums owing by that Scheme Creditor in its capacity as reinsurer of the Scheme Company's Scheme Business. (b) For the avoidance of doubt, contingent and prospective Claims against the Scheme Company, the amount of which have been determined as Agreed Claims (Pre Set-Off) pursuant to the terms of the Scheme, shall be included in any account taken pursuant to clause 4.10(a), including where the relevant Agreed Claims (Pre Set-Off) give rise to a reinsurance or other indemnity claim by the Scheme Company against a reinsurer/indemnitor who is also a Scheme Creditor of the Scheme Company. (c) Only the balance of an account, if any, referred to in clause 4.10(a) and payable to a Scheme Creditor, as well as other sums deductible in accordance with the Scheme, shall be capable of becoming a Final Determined Claim in respect of which that Scheme Creditor may receive payment. (d) The discount applying for the purposes of set-off is as follow: (i) projected obligations payable within five years of the Valuation Date will be paid at face value; (ii) projected obligations payable beyond five years of the Valuation Date will be discounted at a rate of 5.5% per annum for the period between five years of the Valuation Date and the expected payment date of the obligation. 4.11 Treatment of agents The Scheme Company shall be entitled (but shall not be bound) to treat any underwriting agent (including, but not limited to, a manager of an underwriting pool, a managing general agent or a holder of a line-slip or binding authority), as a single Scheme Creditor of the Scheme Company in respect of the Claims of its principal(s) and as a single debtor of the Scheme Company in respect of Liabilities owed to the Scheme Company by its principal(s). 4.12 Funding (a) Brokers who have funded Claims shall not constitute Scheme Creditors for the purposes of asserting such Claims in the Scheme unless: (i) they have acquired an assignment of the funded Claim or written confirmation from the beneficiaries of such funding that the Brokers are entitled to Submit a Claim Form in the Scheme in the place of such beneficiaries in respect of the funded Claim, such assignment or confirmation being in a form acceptable to the Scheme Company; or (ii) such funding took place: A. pursuant to a contractual obligation of the Broker to the Scheme Company; or B. in circumstances where, as a matter of law, the Scheme Company is liable to indemnify or reimburse such Broker. (b) For the avoidance of doubt, any Broker claiming in respect of a funded Claim shall Submit a Claim Form in respect of such Claim in accordance with the provisions of clauses 4.3(a) to 4.3(f). The supporting information to be provided pursuant to clause 4.3(b) shall, unless the Broker is claiming pursuant to clause 4.12(a)(ii)B, include a copy of the relevant assignment, written confirmation or contract referred to in clause 4.12(a)(ii). 4.13 Currency Except where the Scheme Company and a Scheme Creditor otherwise agree: (a) Claims and Agreed Claims (Pre Set-Off) shall be denominated in the currency of the relevant Reinsurance Contract. (b) For the purpose of clause 4.7, the aggregate Agreed Claim (Pre Set-Off) may be denominated in more than one currency and the deductions and application of set-off, shall be applied: (i) first against that element of the Agreed Claim (Pre Set-Off) which is denominated in the same currency as the items to be deducted or set-off (as the case may be); (ii) thereafter against the predominant currency of the Agreed Claim (Pre Set-Off) until exhausted; and (iii) thereafter against the next most predominant currency and so on. (c) For the purpose of converting amounts into a predominant currency, as required by clause 4.13(b) and 4.13(d), such amounts shall be converted at the Relevant Rate of Exchange. (d) Final Determined Claims shall be denominated and paid in the predominant currency in which Claims arise, unless otherwise requested by the Scheme Creditor (subject to clause 4.13(e) below), after application of the deductions and set-off required under clause 4.7. (e) Where a Scheme Creditor requests that its Final Determined Claims be paid in an alternative currency to the predominant currency of its Claims, the Scheme Company may in its absolute and sole discretion, decide to accept or decline such a request. 4.14 Payment of Final Determined Claims (a) The Scheme Company shall not agree any Claims after the Effective Date, nor pay any Claims agreed after the Effective Date, otherwise than pursuant to the Scheme, save where such agreement is in the nature of a commutation or policy buy-back which is negotiated upon a basis which is in all material respects the same as that provided for under the Scheme. (b) The Scheme Company shall effect payment in full of each Scheme Creditor's Final Determined Claim as soon as reasonably practicable after determination, in accordance with the Scheme. Where the Scheme Company fails to make payment in full of a Scheme Creditor's Final Determined Claim within 90 days from (but not including) the date of such Final Determined Claim having been determined, interest shall accrue on that part of the Final Determined Claim which remains unpaid, at the annual rate which is the Bill Rate in force at such time. For the avoidance of doubt, a Scheme Creditor's Final Determined Claim shall be deemed to have been determined on the day: (i) upon which the 30 day period referred to in clause 4.7(b) expires, provided that no Disputed Final Determined Claim Notice has been issued during this period; (ii) of any deemed receipt by the Scheme Creditor of a written confirmation given by the Scheme Company to the relevant Scheme Creditor of the agreed valuation of that Scheme Creditor's Final Determined Claim in accordance with clause 4.7(c); (iii) upon which the 30 day period after the Resolution Period referred to in clause 4.7(d) expires (provided that the Scheme Creditor has not notified the Scheme Company in writing that it wishes the valuation of its Final Determined Claim to be referred to the Scheme Adjudicator during such period); (iv) of any deemed receipt by the Scheme Company of notification from the Scheme Adjudicator of his determination of the amount of the Final Determined Claim. (c) All payments pursuant to the Scheme shall be made, in the absolute discretion of the Scheme Company and at its expense: (i) by electronic funds transfer to such bank account as the Scheme Creditor may from time to time notify to the Scheme Company; or (ii) if requested by the Scheme Creditor, by cheque in favour of the Scheme Creditor (or as the Scheme Creditor may direct by written notice in accordance with clause 9.4 sent by Post at the risk of the Scheme Creditor to the last address of the Scheme Creditor known to the Scheme Company or to such other address as the Scheme Creditor may notify to the Scheme Company); or (iii) in such other manner as the Scheme Company may determine, and the Scheme Company shall be entitled to require a Scheme Creditor, or other person to execute such forms of discharge, receipt or other documents as it may determine in connection with the making of any payment pursuant to the Scheme. (d) Subject to clause 4.14(e) below, any payment pursuant to this clause 4.14 which is uncashed or otherwise unclaimed by the intended payee within 6 months of payment will be transferred into a separate account and will be dealt with in accordance with the Unclaimed Money Act 1995 (NSW). The Final Determined Claim to which it relates shall be deemed to have been settled in full. (e) The Scheme Company reserves the right to re-issue relevant payment instructions or unpaid cheques in respect of any unclaimed amount up to and including the Termination Date, if, in its sole and absolute discretion, it shall deem fit. (f) Payments made pursuant to this clause to a Scheme Creditor or any payment made pursuant to the Unclaimed Money Act 1995 (NSW) shall for all purposes, constitute a valid discharge of the Scheme Company in respect of such Final Determined Claim to the extent of such payment. For the purpose of this clause 4.14, receipt by the receiving bank of the amount of an electronic funds transfer shall be satisfaction of the obligation to pay the amount transferred, and payment of any cheque by the bank on which it is drawn shall be satisfaction of this obligation to pay the amount in which it was drawn. 4.15 No release Subject to clause 4.4 and this clause, nothing in the Scheme shall be construed as resulting in any release, extinguishment, modification, compromise or waiver of any Liability owed by the Scheme Company, but the amount of a Scheme Creditor's entitlement to payment under the Scheme in respect of Final Determined Claims shall constitute the Scheme Company's entire Liability to the Scheme Creditor concerned in respect of its Claim, and payment in full of a Scheme Creditor's Final Determined Claim in accordance with clause 4.14 shall be in full and final settlement of all and any Claim(s) of that Scheme Creditor against the Scheme Company. 4.16 Corporations Act appeal rights Despite any other provision of this Scheme, nothing in this Scheme shall derogate from any right to appeal to the Court that a person may have in respect of any act, omission or decision of a person administering this Scheme under section 1321(a) of the Act. 5. The Scheme Actuary 5.1 The Scheme Actuary (a) There shall be a Scheme Actuary having the duties and functions and the rights conferred upon him by the Scheme. (b) The Scheme Actuary shall provide such advice and assistance to the Scheme Company and the Scheme Adjudicator in respect of the valuation of Claims and the application of the Estimation Methodology, as he may be requested in the discharge of his functions under the Scheme. (c) The Scheme Actuary shall be a Fellow of the Institute of Actuaries of Australia and meet all the requirements to be an approved actuary under General Insurance Prudential Standard GPS220 or GPS520 (from 1 October 2006). (d) The Scheme Actuary shall be Scott Collings of Finity Consulting Pty Limited. (e) The office of Scheme Actuary shall be vacated, if the appointee to that office: (i) dies or becomes bankrupt; (ii) is admitted to hospital because of mental disorder or becomes the subject of an order in matters concerning his mental disorder made by a court having jurisdiction in such matters in Australia or elsewhere; (iii) is convicted of an indictable offence; (iv) resigns his office in accordance with any terms agreed with the Scheme Company; (v) is removed for good cause by the Scheme Company; or (vi) ceases to be a Fellow of the Institute of Actuaries of Australia. (f) In the event of a vacancy in the office of the Scheme Actuary, the Scheme Company shall be entitled to appoint as a replacement Scheme Actuary, a person who is qualified so to act pursuant to clause 5.1(c), and who is not disqualified from acting in accordance with clause 5.1(e). The Scheme Company will notify the Australian Prudential Regulation Authority, following the appointment of a replacement Scheme Actuary. (g) The Scheme Actuary shall be paid such remuneration for (as well as costs, charges and expenses incurred in), the exercise and performance of his powers, rights, duties and functions under the Scheme as may be agreed between the Scheme Actuary and the Scheme Company, such remuneration, costs, charges and expenses are to be paid as a Scheme Cost. 5.2 Responsibility and indemnity (a) No Scheme Creditor shall be entitled to challenge the validity of any act done or omitted to be done by the Scheme Actuary or his Employees or Delegates pursuant to the provisions of the Scheme or in the exercise or performance of any power, right, duty or function conferred upon him under the Scheme and the Scheme Actuary, his Delegates and/or Employees shall not be liable for any loss, unless such loss is attributable to their own (or in the case of the Scheme Actuary, his Employee's or Delegates') fraud or dishonesty. (b) Subject to the Act, the Scheme Actuary (in his capacity as such) and each of his Employees and Delegates shall, in relation to the Scheme Company, be entitled to an indemnity out of the Property of the Scheme Company against: (i) all expenses and liabilities properly incurred by such Scheme Actuary, his Employees and/or Delegates in performing or exercising any power, right, duty or function conferred upon him under the Scheme in respect of the Scheme Company; and (ii) any liability incurred by such Scheme Actuary, his Employees and/or Delegates in defending any Proceedings, whether civil or criminal, in respect of any alleged negligence, wilful default, wilful breach of duty or trust, fraud or dishonesty on their part, in relation to the operation of the Scheme, in which judgment is given in their favour or in which they are acquitted or which are discontinued before judgment is given; or in connection with any application in any such Proceedings in which relief is granted to them by a court from liability for negligence, wilful default, wilful breach of duty or trust, fraud or dishonesty on his part in relation to the operation of the Scheme. (c) The Scheme Company may pay costs incurred by any Scheme Actuary in defending Proceedings of the nature described in clause 5.2(b)(ii) which relate to the operation of the Scheme, provided that the Scheme Actuary undertakes to reimburse the Scheme Company (with interest) for any amount which would not, in the event, have been payable by the Scheme Company under clause 5.2(b)(ii). 6. The Scheme Adjudicator 6.1 Qualification, resignation and removal (a) Subject to the appointment of an alternate Scheme Adjudicator in accordance with clause 6.1(b), there shall be one Scheme Adjudicator who shall be an individual who is duly qualified in the reasonable opinion of the Scheme Company, in consultation with the Scheme Actuary, to discharge the function of the Scheme Adjudicator under the Scheme. The first Scheme Adjudicator shall be Mark Moyes of 3 red Pty Ltd. (b) In the event that: (i) the Scheme Adjudicator becomes aware that he has a conflict of interest in relation to any matter referred to him (in which case the Scheme Adjudicator shall, as soon as reasonably practicable thereafter, inform the Scheme Company of such conflict); and/or (ii) the Scheme Company becomes aware that the Scheme Adjudicator has a conflict of interest in relation to any matter referred to the Scheme Adjudicator (in which case the Scheme Company will notify the Scheme Adjudicator of such conflict), the Scheme Company shall, in either event, nominate an alternate Scheme Adjudicator qualified to act in accordance with clause 6.1(a), for the sole purpose of adjudicating on the relevant matter and shall, as soon as reasonably practicable, give notice of such nomination to the Scheme Creditor in relation to which the conflict arises. If the relevant Scheme Creditor fails to object to the Scheme Company's nomination within 7 days of deemed receipt by it of the notice of the nomination, or agreement is otherwise reached between the Scheme Company and the Scheme Creditor within that period, the Scheme Company shall have the power to appoint the nominated or agreed alternate Scheme Adjudicator. If the Scheme Creditor objects to the nomination and the Scheme Company and the Scheme Creditor cannot agree on the identity of an alternate Scheme Adjudicator within 7 days, the Scheme Company shall request the appointment of a suitably qualified Scheme Adjudicator to be made by the President of the Institute of Actuariesof Australia for the time being, whose decision shall be final. The Scheme Adjudicator's appointment shall continue during the appointment of any alternate Scheme Adjudicator and he shall continue to adjudicate on other matters referred to him unless a conflict shall arise in respect of those matters in which case the terms of this clause6.1(b) shall apply. (c) For the avoidance of doubt, the provisions of clauses 6.1(d), 6.1(e), 6.2, and 6.3 shall apply with the necessary changes made to any alternate Scheme Adjudicator appointed pursuant to clause 6.1(b). (d) The Scheme Adjudicator may continue to act in spite of a conflict of interest, if the Scheme Creditor in relation to whom the conflict arises, and the Scheme Company, agree in writing to permit the Scheme Adjudicator to act and, if the Scheme Adjudicator himself is willing to act, notwithstanding such conflict. Any such waiver of a conflict will only be made after the Scheme Adjudicator, relevant Scheme Creditor and the Scheme Company have been provided with (and have provided), sufficiently detailed disclosure of the circumstances and nature of the conflict to enable each of them to take an informed decision on whether the conflict may be waived without prejudicing or embarrassing any of them. (e) The office of Scheme Adjudicator shall be vacated if the appointee to that office shall: (i) die or become bankrupt; (ii) be admitted to hospital because of mental disorder or be the subject of an order in matters concerning his mental disorder made by a court having jurisdiction in such matters in Australia or elsewhere; (iii) be convicted of an indictable offence; (iv) resign his office in accordance with any terms agreed with the Scheme Company; or (v) be removed for good cause by the Scheme Company, and the Scheme Company shall forthwith appoint a person who is qualified to act as Scheme Adjudicator pursuant to clause 6.1(a), and not ineligible by reason of any of the matters referred to in this clause 6.1(e). (f) Any alternate or replacement Scheme Adjudicator must enter into a deed poll agreeing to be bound by the terms of this Scheme in a similar form to that entered into by the original Scheme Adjudicator (with the necessary changes being made). 6.2 Powers, rights, duties and functions (a) The Scheme Adjudicator shall be responsible for the adjudication of Disputed Claims and the determination of Agreed Claims (Pre Set-Off) (in the case of a referral under clauses 4.5(e), 4.5(f) or 4.5(h)) or Final Determined Claims (in the case of a referral under clause 4.7(d), in respect of such Disputed Claims and shall have the powers, rights, duties and functions conferred upon him by the Scheme for such purposes. (b) The Scheme Adjudicator shall be paid such remuneration for the exercise and performance of his powers, rights, duties and functions under the Scheme as may be agreed between the Scheme Adjudicator and the Scheme Company. Subject to clauses 4.6(j) and 4.6(l), such remuneration shall be paid out of the Property of the Scheme Company as Scheme Costs. 6.3 Responsibility and indemnity (a) In exercising his powers and rights and in carrying out his duties and functions under the Scheme, the Scheme Adjudicator shall act in good faith and with due care and diligence and shall exercise his powers and rights under the Scheme to ensure that the Scheme is operated in accordance with its terms. (b) No Scheme Creditor shall be entitled to challenge the validity of any act done or permitted to be done within his powers and in good faith and with due care and diligence by the Scheme Adjudicator, pursuant to the provisions of the Scheme or in the exercise or performance of any power, right, discretion, duty or function conferred upon him under the Scheme, and the Scheme Adjudicator shall not be liable for any loss unless any such loss is attributable to his own negligence, wilful default, wilful breach of duty or trust, fraud or dishonesty. (c) Subject to the Act, the Scheme Adjudicator shall be entitled to an indemnity out of the Property of the Scheme Company against: (i) all costs, charges, expenses and liabilities properly incurred by him in the course of exercising or performing his powers, rights, duties or functions under the Scheme in relation to the Scheme Company; and (ii) any liability incurred by him in defending any Proceedings, whether civil or criminal, in respect of any negligence, wilful default, wilful breach of duty or trust, fraud or dishonesty on his part in relation to the operation of the Scheme in which judgment is given in his favour or in which he is acquitted; or in connection with any application in any such Proceedings in which relief is granted to him by a court from liability for negligence, wilful default, wilful breach of duty or trust, fraud or dishonesty on his part in relation to the operation of the Scheme. (d) The Scheme Company may pay costs incurred by the Scheme Adjudicator in defending Proceedings of the nature described in clause 6.3(c)(ii), provided that the Scheme Adjudicator undertakes to reimburse the Scheme Company (with interest) for any amount which would not, in the event, have been payable by the Scheme Company under clause 6.3(c)(ii). 7. The Board The powers of the Board shall remain as immediately before the Effective Date. 8. Termination of the Scheme and reversion to run-off 8.1 Final implementation of the Scheme Without prejudice to the continuing effect of those provisions of the Scheme set out in clause 8.3, the Scheme shall be fully implemented upon written confirmation by the Scheme Company to the Scheme Adjudicator that all Claims have been adjudicated or otherwise determined and all Final Determined Claims have been paid in full (or deemed to have been satisfied in full) in accordance with the terms of the Scheme. The date of such confirmation shall be the Termination Date. This confirmation shall be given as soon as is reasonably practicable after all Final Determined Claims have been paid in full (or deemed to have been satisfied in full). The Scheme Adjudicator and the Scheme Actuary shall be released from their obligations under the Scheme on the Termination Date. 8.2 Reversion to run-off (a) If at any time on or before 90 days after the Final Claims Submission Date, the Scheme Company determines that the total value of Claims Submitted (or treated as so submitted) by Scheme Creditors on or prior to the Final Claims Submission Date is materially in excess of the Accounting Claims Provision (in the judgment of the directors of the Scheme Company, acting reasonably and taking into account the level at which they reasonably consider Claims may ultimately be determined in accordance with the Scheme) then the Scheme Company may send notice to all its Scheme Creditors in accordance with clause 9.4, and place a notice in those newspapers and publications in which the Creditors' Meetings were advertised (or should this not prove reasonably possible, in such other publications as it shall deem appropriate), that the Scheme shall terminate (the first date on which any such advertisement appears being the Reversion to Run-Off Date). (b) If the business of the Scheme Company reverts to run-off as contemplated by this clause 8.2: (i) Agreed Claims (Pre Set-Off) determined hereunder, but which have not become Final Determined Claims pursuant to clause 4.7, shall cease to be binding on the Scheme Company and Scheme Creditor; (ii) Final Determined Claims (which have not yet been paid), shall continue to be binding upon the Scheme Company and the Scheme Creditor (and therefore shall remain payable hereunder, if not yet paid), except where the Scheme Creditor elects otherwise, by written notice sent to the Scheme Company in accordance with clause 9.4, no later than 30 days after the Reversion to Run-off Date, in which case, such determination shall likewise cease to be binding upon the Scheme Company and that Scheme Creditor; (iii) Final Determined Claims which have been paid by the Scheme Company will continue to be binding upon the Scheme Company and the Scheme Creditor. For this purpose a Final Determined Claim will be treated as being paid on the earlier of the Scheme Creditor receiving cleared funds for the Final Determined Claim, and 7 days after the Scheme Company has posted a cheque to the Scheme Creditor for the Final Determined Claim. 8.3 Provisions surviving termination Clauses 2, 3.1, 3.2, 4.3(e), 4.3(f), 4.4(a), 4.4(c), 4.5(g), 4.6(i), 4.7(g), 4.10(c), 4.14(d), 4.15, 5.2, 6.3, 8.2(b), 9.2, 9.4, 9.5 and 9.6 shall survive termination of the Scheme. 9. General Scheme provisions 9.1 Effective Date The Scheme shall become effective on the Effective Date. 9.2 Pre-Scheme Expenses and Scheme Costs (a) As soon as practicable after the Effective Date, there shall be paid in full out of the Scheme Company's Property, all Pre-Scheme Expenses. (b) There shall be paid in full, out of the Scheme Company's Property, as incurred, all Scheme Costs. 9.3 Modification of the Scheme The Scheme Company, by its solicitors or counsel, may at any hearing by the Court to sanction the Scheme, consent on behalf of its Scheme Creditors, to any modification of, or addition to, the Scheme or any terms or conditions which the Court may think fit to approve or impose. 9.4 Notices (a) Without prejudice to clause 4, any notice or other written communication to be given under, or in relation to, the Scheme shall be given in writing and shall be deemed to have been duly given if: (i) in the case of the Scheme Company, it is sent by email to schemes@recentre.com.au (email address), or it is sent by facsimile to +(61) (02) 9274 3033 (fax number) or it is sent by Post c/o Littlewoods Services Pty Limited, Level 21, Tower Building, Australia Square, 264 George Street, Sydney, New South Wales, Australia, , marked for the attention of Ross Littlewood, or such other email address, fax number or postal address as the Scheme Company may notify to the relevant Scheme Creditor by Post; (ii) in the case of the Scheme Adjudicator, it is sent by Post, to Mark Moyes, c/- 3 red Pty Ltd, PO Box 761, Woollahra, New South Wales, 1350, Australia, or sent by facsimile to +(61) (02) 9327 3601 (fax number) or by email to mmoyes@3red.com.au (email address) marked for the attention of Mark Moyes, or such other address, fax number or email address as the Scheme Company may notify to the relevant Scheme Creditor by Post; (iii) in the case of a Scheme Creditor, it is sent by Post, to its last known address or it is sent to the last known fax number or email address for the Scheme Creditor in each case according to the Scheme Company's records; and (iv) in the case of a Known Broker, it is sent by Post, to his last known address or, it is sent to the last known fax number or email address for that Broker in each case according to the Scheme Company's records. (b) Except as otherwise provided herein, any notice or other written communication to be given under the Scheme shall be deemed to have been received: (i) if delivered by hand, on the first Business Day following delivery; (ii) if sent by post, on the second Business Day after posting, if the recipient is in the country of despatch and otherwise on the seventh Business Day after posting; (iii) if sent by fax between 9:00 am and 5:00 pm (local time of the recipient) on a Business Day, upon receipt of a clear fax transmission report (and if not sent during this time, the fax shall be deemed received at 9:00 am, (local time), on the next following Business Day); and (iv) if sent by email between 9:00 am and 5:00 pm (local time of the recipient), on a Business Day, at the time of sending recorded by the sender's computer (and if not sent during this time, the email shall be deemed received at 9:00 am, (local time), on the next following Business Day). (c) In proving service, it shall be sufficient proof in the case of a notice sent by Post, that the envelope was properly stamped, addressed and placed in the Post. (d) For the purposes of clause 4, the accidental omission to send any notice, written communication or other document in accordance with this clause or the non-receipt of any such notice by any Scheme Creditor, shall not affect the provisions of clause 4. 9.5 Calculation of time periods Unless otherwise specified, time periods laid down by the Scheme shall be calculated by reference to elapsed days and not Business Days. In the event that a time period expires on a day which is not a Business Day, such period shall be deemed not to expire until close of business on the Business Day next following. 9.6 Governing law and jurisdiction (a) The Scheme shall be governed by, and construed in accordance with, the laws of New South Wales, Australia. (b) The Scheme Creditors hereby agree that the Court shall have non-exclusive jurisdiction to hear and determine any Proceedings and to settle any dispute which may arise out of the Scheme Booklet or any provision of the Scheme, including this clause 9.6, or out of any action taken or omitted to be taken under the Scheme or in connection with the administration of the Scheme. (c) The Scheme Creditors irrevocably submit to the non-exclusive jurisdiction of the Court. (d) Nothing in this clause 9.6, shall affect the validity of any other provisions determining governing law and jurisdiction as between the Scheme Company and any of its Scheme Creditors, whether contained in any Reinsurance Contract or otherwise. (e) Notwithstanding the provisions of clause 9.6(a), the Scheme Company retains the right to bring Proceedings in the courts of any other country having jurisdiction under its own laws to hear such Proceedings.

Deed Poll - in favour of NRG London and its Scheme Creditors

Deed Poll made on 2006 Party Mark Moyes of 173 Sutherland Street, Paddington NSW 2021 ("Scheme Adjudicator") in favour of NRG London Reinsurance Company Limited ABN 77 001 160 792 of Level 21, Tower Building, Australia Square, Sydney NSW 2000, Australia ("NRG London") and The scheme creditors of NRG London as at the Effective Date ("Scheme Creditors") Recitals 1.1 The directors of NRG London have proposed the Scheme. 1.2 The effect of the Scheme will be that from the Effective Date, NRG London will: (i) cease to adjust Claims as they arise in the ordinary course of conducting its Scheme Business; and (ii) seek to agree a "once-and-for-all" valuation of each Scheme Creditor's Claim (including previously unquantified and un-notified Claims). 1.3 The Scheme Adjudicator is entering into this Deed Poll for the purpose of covenanting in favour of NRG London and the Scheme Creditors to perform the steps attributed to it under the Scheme.

1. Definitions and interpretations 1.1 Definitions In this Deed Poll: (a) "Scheme" means the proposed scheme of arrangement between NRG London and its Scheme Creditors the subject of the Scheme Booklet dated on or around July 2006, subject to any alterations or conditions made or required by the Federal Court pursuant to section 411(6) of the Corporations Act 2001 (Commonwealth); and (b) words and phrases defined in the Scheme have the same meaning in this Deed Poll. 1.2 Interpretation In this document, unless the contrary intention appears or the context requires otherwise: (a) words and phrases (other than those defined in clause 1.1) have the same meaning (if any) given to them in the Corporations Act; (b) the singular includes the plural and vice versa; (c) each gender includes each other gender; (d) references to persons include references to individuals, corporations, other bodies corporate or bodies politic; (e) references to paragraphs or clauses are to a paragraph or clause of this document; (f) a reference to a statute, regulation or agreement is to such a statute, regulation or agreement as from time to time amended; (g) a reference to a person includes a reference to a person's executors, administrators, successors, substitutes (including, without limitation, persons taking by novation) and assigns; (h) if a time period is specified and dates from a given date or the day of an act or event, it is to be calculated exclusive of that day; (i) a reference to a day is to be interpreted as the period of time commencing at midnight and ending 24 hours later; (j) a reference to any time is a reference to that time in Sydney, Australia; (k) a reference to 'A$' is to the lawful currency of the Commonwealth of Australia; (l) a reference to any document (including this Deed Poll) is to that document as varied, novated, ratified or replaced from time to time; (m) the interpretation of a substantive provision is not affected by any heading; and (n) "includes" in any form is not a word of limitation.
2. Operative Provisions 2.1 Effective time This Deed Poll does not have any force or effect unless the Scheme becomes Effective on or prior to 30 September 2006. 2.2 Obligations of Scheme Adjudicator The Scheme Adjudicator acknowledges and agrees that it will for so long as it is the Scheme Adjudicator, duly perform the matters expressed in the Scheme to be done by it in accordance with the Scheme. 2.3 Nature of Deed Poll The Scheme Adjudicator acknowledges that this Deed Poll may be relied on and enforced by NRG London and any Scheme Creditor in accordance with its terms even though NRG London and the Scheme Creditors are not parties to it.
3. General 3.1 Governing law and jurisdiction (a) This Deed Poll is governed by the laws of New South Wales, Australia. (b) The Scheme Adjudicator irrevocably submits to the non-exclusive jurisdiction of the courts of New South Wales, Australia. 3.2 Waiver (a) Waiver of any right arising from a breach of this Deed Poll or of any right, power, authority, discretion or remedy arising upon default under this Deed Poll must be in writing and signed by the party granting the waiver. (b) A failure or delay in exercise, or partial exercise, of: (i) a right arising from a breach of this Deed Poll; or (ii) a right, power, authority, discretion or remedy created or arising upon default under this Deed Poll, does not result in a waiver of that right, power, authority, discretion or remedy. (c) A party is not entitled to rely on a delay in the exercise or non-exercise of a right, power, authority, discretion or remedy arising from a breach of this Deed Poll or on a default under this Deed Poll as constituting a waiver of that right, power, authority, discretion or remedy. (d) A party may not rely on any conduct of another party as a defence to exercise of a right, power, authority, discretion or remedy by that other party. (e) This clause may not itself be waived except in writing. 3.3 Further action The Scheme Adjudicator will promptly do all things and execute all further documents necessary to give effect to this Deed Poll. Executed as a deed poll. Signed sealed and deliveredbyMark Moyesin the presence of: [Signature Mark Moyes] [Signature Jeffrey Robert Flick] Signature

Signature of Witness [Jeffrey Robert Flick] Name of Witness in full

Deed Poll - in favour of NRG Victory and its Scheme Creditors

Deed Poll made on 2006 Party Mark Moyes of 173 Sutherland Street, Paddington NSW 2021 ("Scheme Adjudicator") in favour of NRG Victory Australia Limited ABN 47 002 971 477 of Level 21, Tower Building, Australia Square, Sydney NSW 2000, Australia ("NRG Victory") and The scheme creditors of NRG Victoryas at the Effective Date ("Scheme Creditors") Recitals A. The directors of NRG Victory have proposed the Scheme. B. The effect of the Scheme will be that from the Effective Date, NRG Victory will: (i) cease to adjust Claims as they arise in the ordinary course of conducting its Scheme Business; and (ii) seek to agree a "once-and-for-all" valuation of each Scheme Creditor's Claim (including previously unquantified and un-notified Claims). C. The Scheme Adjudicator is entering into this Deed Poll for the purpose of covenanting in favour of NRG Victory and the Scheme Creditors to perform the steps attributed to it under the Scheme.

1. Definitions and interpretations 1.1 Definitions In this Deed Poll: (a) "Scheme" means the proposed scheme of arrangement between NRG Victory and its Scheme Creditors the subject of the Scheme Booklet dated on or around July 2006, subject to any alterations or conditions made or required by the Federal Court pursuant to section 411(6) of the Corporations Act 2001 (Commonwealth); and (b) words and phrases defined in the Scheme have the same meaning in this Deed Poll. 1.2 Interpretation In this document, unless the contrary intention appears or the context requires otherwise: (a) words and phrases (other than those defined in clause 1.1) have the same meaning (if any) given to them in the Corporations Act; (b) the singular includes the plural and vice versa; (c) each gender includes each other gender; (d) references to persons include references to individuals, corporations, other bodies corporate or bodies politic; (e) references to paragraphs or clauses are to a paragraph or clause of this document; (f) a reference to a statute, regulation or agreement is to such a statute, regulation or agreement as from time to time amended; (g) a reference to a person includes a reference to a person's executors, administrators, successors, substitutes (including, without limitation, persons taking by novation) and assigns; (h) if a time period is specified and dates from a given date or the day of an act or event, it is to be calculated exclusive of that day; (i) a reference to a day is to be interpreted as the period of time commencing at midnight and ending 24 hours later; (j) a reference to any time is a reference to that time in Sydney, Australia; (k) a reference to 'A$' is to the lawful currency of the Commonwealth of Australia; (l) a reference to any document (including this Deed Poll) is to that document as varied, novated, ratified or replaced from time to time; (m) the interpretation of a substantive provision is not affected by any heading; and (n) "includes" in any form is not a word of limitation.
2. Operative Provisions 2.1 Effective time This Deed Poll does not have any force or effect unless the Scheme becomes Effective on or prior to 30 September 2006. 2.2 Obligations of Scheme Adjudicator The Scheme Adjudicator acknowledges and agrees that it will for so long as it is the Scheme Adjudicator, duly perform the matters expressed in the Scheme to be done by it in accordance with the Scheme. 2.3 Nature of Deed Poll The Scheme Adjudicator acknowledges that this Deed Poll may be relied on and enforced by NRG Victory and any Scheme Creditor in accordance with its terms even though NRG Victory and the Scheme Creditors are not parties to it.
3. General 3.1 Governing law and jurisdiction (a) This Deed Poll is governed by the laws of New South Wales, Australia. (b) The Scheme Adjudicator irrevocably submits to the non-exclusive jurisdiction of the courts of New South Wales, Australia. 3.2 Waiver (a) Waiver of any right arising from a breach of this Deed Poll or of any right, power, authority, discretion or remedy arising upon default under this Deed Poll must be in writing and signed by the party granting the waiver. (b) A failure or delay in exercise, or partial exercise, of: (i) a right arising from a breach of this Deed Poll; or (ii) a right, power, authority, discretion or remedy created or arising upon default under this Deed Poll, does not result in a waiver of that right, power, authority, discretion or remedy. (c) A party is not entitled to rely on a delay in the exercise or non-exercise of a right, power, authority, discretion or remedy arising from a breach of this Deed Poll or on a default under this Deed Poll as constituting a waiver of that right, power, authority, discretion or remedy. (d) A party may not rely on any conduct of another party as a defence to exercise of a right, power, authority, discretion or remedy by that other party. (e) This clause may not itself be waived except in writing. 3.3 Further action The Scheme Adjudicator will promptly do all things and execute all further documents necessary to give effect to this Deed Poll. Executed as a deed poll. Signed sealed and deliveredbyMark Moyesin the presence of: [Signature Mark Moyes] [Signature Jeffrey Robert Flick] Signature

Signature of Witness [Jeffrey Robert Flick] Name of Witness in full

By an order of the Federal Court of Australia made on 5 July 2006 pursuant to section 411(1) of the Corporations Act, a meeting of the Scheme Creditors of NRG London Reinsurance Company Limited (ABN 77 001 160 792) (a company incorporated in England, with limited liability, registered as a foreign company under the Corporations Act, 2001 of Australia) will be held at the offices of Clayton Utz, Level 34, No 1 O'Connell Street, Sydney NSW 2000 on 15 August 2006 at 10:00 am. The Court has directed that Nancy Milne act as chairperson of the meeting or in her absence, Ian Hutchinson, except that in the case of any decision or determination in relation to which Nancy Milne or Ian Hutchinson has a conflict of interest, the chairperson will be Mark Moyes, the Scheme Adjudicator (the Chairperson). The Court has directed the Chairperson to report the result of the meeting to the Court. To enable you to make an informed voting decision, further information on the Scheme is set out in the document of which the notice convening this meeting forms part. Terms used in this notice have the same meaning as set out in the Definitions in Section 11 of the document of which the notice convening this meeting forms part. This document is important and requires your immediate attention. If you are in any doubt as to any aspect of this proposal or as to the action you should take, you should consult your insurance broker or other financial or professional adviser without delay. Business of the meeting

To consider and if thought fit, pass the following resolution: "That pursuant to, and in accordance with, section 411 of the Corporations Act, the scheme of arrangement proposed between the company and its scheme creditors as contained in and more particularly described in the document of which the notice convening this meeting forms part is approved (with or without modification) as approved by the Federal Court of Australia." Voting

How to vote Scheme Creditors may vote in either of two ways: by attending the meeting and voting in person or by attorney (or, if a corporation, by a duly authorised representative); or by appointing another person (whether a Scheme Creditor or not), as their proxy to attend and vote in their place, using the yellowproxy and voting form accompanying the document of which the notice convening this meeting forms part. Voting in person (or by attorney) Scheme Creditors are asked to arrive at the venue at least 30 minutes before the time designated for the Scheme Meeting to allow for registration for the meeting. A representative of a company attending the Scheme Meeting must present satisfactory evidence of his or her appointment to attend on its behalf unless previously lodged with the Company. Attorneys should bring with them original or certified copies of the power of attorney under which they have been authorised to attend and vote at the Scheme Meeting. Voting by proxy A Scheme Creditor entitled to attend and vote is entitled to appoint not more than two proxies. Each proxy will have the right to vote on the poll and also to speak at the Scheme Meeting. The appointment of a proxy may specify the proportion or the number of votes that the proxy may exercise. Where more than one proxy is appointed, and if the appointment does not specify the proportion or number of the Scheme Creditor's votes each proxy may exercise, each proxy may exercise half of the votes. A proxy need not be a Scheme Creditor. If a proxy is not directed how to vote on an item of business, the proxy may vote or abstain from voting, as that person thinks fit. If a proxy is instructed to abstain from voting on an item of business, that person is directed not to vote on the Scheme Creditor's behalf on the poll, and the Claim the subject of the proxy appointment will not be counted in computing the required majority. Scheme Creditors who return their proxy and voting form with a direction how to vote but do not nominate the identity of their proxy will be taken to have appointed the Chairperson of the Scheme Meeting as their proxy to vote on their behalf. If a proxy and voting form is returned but the nominated proxy does not attend the Scheme Meeting, the Chairperson of the Scheme Meeting will act in place of the nominated proxy and vote in accordance with any instructions. Proxy appointments in favour of the Chairperson of the Scheme Meeting, which do not contain a direction will be used to support the resolution to approve the Scheme. Any Scheme Creditor completing and returning a proxy and voting form only will have the value of its Claims determined for voting purposes by the Chairperson of the Scheme Meeting on the basis of the information available to the relevant Scheme Company in respect of such Claims. To be effective, completed proxy and voting forms must be: · emailed to schemes@recentre.com.au; · sent to the Scheme Company at Level 21, Tower Building, Australia Square, 264 George Street, Sydney NSW 2000; or · faxed to (02) 9274 3033, so that they are received no later than 5:00 pm (Sydney time) on 11 August 2006. Proxy and voting forms may also be handed in at the registration desk at the relevant Scheme Meeting prior to its commencement. The proxy and voting form must be signed by the Scheme Creditor or the Scheme Creditor's attorney. Proxies given by Australian companies must be executed in accordance with the Corporations Act. Proxies given by foreign companies must be executed in accordance with the laws of the jurisdiction of incorporation and constituent documents. Where the appointment of a proxy is signed by the appointor's attorney, a certified copy of the power of attorney, or the power itself, must be received by the Scheme Company at the above address, by email or by facsimile transmission by 5:00 pm (Sydney time) on 11 August 2006. If facsimile transmission is used, the power of attorney must be certified. Scheme Creditors who are entitled to vote

Pursuant to section 411 of the Corporations Act and all other enabling powers, the Court has determined that the time for determining eligibility to vote at the Scheme Meeting is 5:00 pm (Sydney time) on 11 August 2006. Only those Scheme Creditors will be entitled to attend and vote at the Scheme Meeting. Court approval

In accordance with section 411(4)(b) of the Corporations Act, in order to become effective the Scheme (with or without modification) must be approved by an order of the Court. If the resolution put to the Scheme Meeting is passed by the requisite majority, the Company intends to apply to the Court on 16 August 2006 for approval of the Scheme.

By an order of the Federal Court of Australia made on 5 July 2006 pursuant to section 411(1) of the Corporations Act, a meeting of the Scheme Creditors of NRG Victory Australia Limited (ABN 47 002 971 477) will be held at the offices of Clayton Utz, Level 34, No 1 O'Connell Street, Sydney NSW 2000 on 15 August 2006 at 10:30 am. The Court has directed that Nancy Milne act as chairperson of the meeting or in her absence, Ian Hutchinson, except that in the case of any decision or determination in relation to which Nancy Milne or Ian Hutchinson has a conflict of interest, the chairperson will be Mark Moyes, the Scheme Adjudicator (the Chairperson). The Court has directed the Chairperson to report the result of the meeting to the Court. To enable you to make an informed voting decision, further information on the Scheme is set out in the document of which the notice convening this meeting forms part. Terms used in this notice have the same meaning as set out in the Definitions in Section 11 of the document of which the notice convening this meeting forms part. This document is important and requires your immediate attention. If you are in any doubt as to any aspect of this proposal or as to the action you should take, you should consult your insurance broker or other financial or professional adviser without delay. Business of the meeting

To consider and if thought fit, pass the following resolution: "That pursuant to, and in accordance with, section 411 of the Corporations Act, the scheme of arrangement proposed between the company and its scheme creditors as contained in and more particularly described in the document of which the notice convening this meeting forms part is approved (with or without modification) as approved by the Federal Court of Australia." Voting

How to vote Scheme Creditors may vote in either of two ways: by attending the meeting and voting in person or by attorney (or, if a corporation, by a duly authorised representative); or by appointing another person (whether a Scheme Creditor or not), as their proxy to attend and vote in their place, using the pink proxy and voting form accompanying the document of which the notice convening this meeting forms part. Voting in person (or by attorney) Scheme Creditors are asked to arrive at the venue at least 30 minutes before the time designated for the Scheme Meeting to allow for registration for the meeting. A representative of a company attending the Scheme Meeting must present satisfactory evidence of his or her appointment to attend on its behalf unless previously lodged with the Company. Attorneys should bring with them original or certified copies of the power of attorney under which they have been authorised to attend and vote at the Scheme Meeting. Voting by proxy A Scheme Creditor entitled to attend and vote is entitled to appoint not more than two proxies. Each proxy will have the right to vote on the poll and also to speak at the Scheme Meeting. The appointment of a proxy may specify the proportion or the number of votes that the proxy may exercise. Where more than one proxy is appointed, and if the appointment does not specify the proportion or number of the Scheme Creditor's votes each proxy may exercise, each proxy may exercise half of the votes. A proxy need not be a Scheme Creditor. If a proxy is not directed how to vote on an item of business, the proxy may vote or abstain from voting, as that person thinks fit. If a proxy is instructed to abstain from voting on an item of business, that person is directed not to vote on the Scheme Creditor's behalf on the poll, and the Claim the subject of the proxy appointment will not be counted in computing the required majority. Scheme Creditors who return their proxy and voting form with a direction how to vote but do not nominate the identity of their proxy will be taken to have appointed the Chairperson of the Scheme Meeting as their proxy to vote on their behalf. If a proxy and voting form is returned but the nominated proxy does not attend the Scheme Meeting, the Chairperson of the Scheme Meeting will act in place of the nominated proxy and vote in accordance with any instructions. Proxy appointments in favour of the Chairperson of the Scheme Meeting, which do not contain a direction will be used to support the resolution to approve the Scheme. Any Scheme Creditor completing and returning a proxy and voting form only will have the value of its Claims determined for voting purposes by the Chairperson of the Scheme Meeting on the basis of the information available to the relevant Scheme Company in respect of such Claims. To be effective, completed proxy and voting forms must be: · schemes@recentre.com.au; · sent to the Scheme Company at Level 21, Tower Building, Australia Square, 264 George Street, Sydney NSW 2000; or · faxed to (02) 9274 3033, so that they are received no later than 5:00 pm (Sydney time) on 11 August 2006. Proxy and voting forms may also be handed in at the registration desk at the relevant Scheme Meeting prior to its commencement. The proxy and voting form must be signed by the Scheme Creditor or the Scheme Creditor's attorney. Proxies given by Australian companies must be executed in accordance with the Corporations Act. Proxies given by foreign companies must be executed in accordance with the laws of the jurisdiction of incorporation and constituent documents. Where the appointment of a proxy is signed by the appointor's attorney, a certified copy of the power of attorney, or the power itself, must be received by the Scheme Company at the above address, by email or by facsimile transmission by 5:00 pm (Sydney time) on 11 August 2006. If facsimile transmission is used, the power of attorney must be certified. Scheme Creditors who are entitled to vote

Pursuant to section 411 of the Corporations Act and all other enabling powers, the Court has determined that the time for determining eligibility to vote at the Scheme Meeting is 5:00 pm (Sydney time) on 11 August 2006. Only those Scheme Creditors will be entitled to attend and vote at the Scheme Meeting. Court approval

In accordance with section 411(4)(b) of the Corporations Act, in order to become effective the Scheme (with or without modification) must be approved by an order of the Court. If the resolution put to the Scheme Meeting is passed by the requisite majority, the Company intends to apply to the Court on 16 August 2006 for approval of the Scheme.

NRG London Reinsurance Company Limited Scheme of the Australian branch

Proxy and voting form for Scheme Meeting to be held at the offices of Clayton Utz, Level 34, No 1 O'Connell Street, Sydney NSW 2000 on 15 August 2006 at 10:00 am General

This proxy and voting form is to be used by the Scheme Creditors at the Scheme Meeting to consider, and if thought fit, approve a scheme of arrangement between NRG London Reinsurance Company Limited (ABN 77 001 160 792) a company incorporated in England, with limited liability, registered as a foreign company under the Corporations Act (the Scheme Company) and its Scheme Creditors pursuant to, and in accordance with, section 411 of the Corporations Act. Unless separately defined in this proxy and voting form, the defined words and expressions contained within this proxy and voting form and its accompanying Guidance Notes have the meaning given to them in the Scheme Booklet dated 5 July 2006. This document is important and requires your immediate attention. If you are in any doubt as to any aspect of this proposal or as to the action you should take, you should consult your insurance broker or other financial or professional adviser without delay. If it has sufficient information to do so, the Scheme Company has included in this proxy and voting form its estimate of the value of your Claim (other than in respect of IBNR Claims). That estimate is not binding on you and you may replace or amend any detail relating to your Claim that is written on this form if you wish to do so. You should review all pre-completed information carefully to see if it is accurate. This proxy and voting form comprises: A the proxy form; B the voting form; C Guidance Notes for: (i) completion of the proxy form; and (ii) completion of the Summary Table and Detailed Tables; and D the Summary Table and three Detailed Tables (for non-proportional claims, proportional claims, and IBNR claims). A Proxy Form

Insert Name/s I/We Individual or Scheme Creditor

being a Scheme Creditor of the Scheme Company in the sum of: (enter the estimated Net total Claim as detailed in the Summary Table forming part of the voting form) HEREBY APPOINT the Chairperson OR Write here the name of the person you are appointing if this person is someone other than the Chairperson (mark with an 'X')

or failing the person named, or if no person is named, the Chairperson, as my/our proxy to attend, to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit), and to act generally on my/our behalf, at the Scheme Meeting of the Scheme Company to be held at the offices of Clayton Utz, Level 34, No 1 O'Connell Street, Sydney NSW 2000 on 15 August 2006 at 10:00 am and at any adjournment of that Scheme Meeting.

Where more than one proxy is to be appointed or where voting intentions cannot be adequately expressed using this form an additional form of proxy is available on request from the Scheme Company. Proxies will only be valid and accepted by the Scheme Company if they are (a) sent to the Scheme Company at Level 21, Tower Building, Australia Square, 264 George Street, Sydney NSW 2000; or (b) faxed to (02) 9274 3033, so that they are received no later than 5:00 pm (Sydney time) on 11 August 2006. Voting directions to your proxy - please mark X to indicate your direction

Resolution 1 For Against Abstain*c

The Chairperson of the Scheme Meeting intends voting all undirected proxies in favour of the resolution.

• If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll. Signature of Scheme Creditor

This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

Sole Director and Sole Company Secretary/Sole Director (cross out inapplicable capacity) Director Director/Company Secretary (cross out inapplicable capacity) / /

Contact name Contact daytime numbers Date Contact email Facsimile number

This voting form consists of a Summary Table and three Detailed Tables (for non-proportional claims, proportional claims and IBNR claims) and Guidance Notes for completion of the Summary Table and Detailed Tables. The Summary Table and Detailed Tables must be completed in accordance with the Guidance Notes on the following pages. You should read the instructions carefully. Failure to follow them may result in a Claim being rejected in whole or in part for voting purposes if the Chairperson has insufficient information to decide whether it is a fair and reasonable Claim.

The amount of a Claim admitted for voting purposes will not constitute an admission of the existence or amount of any Claim and will not bind the Scheme Company or Scheme Creditor unless the Scheme Creditor accepts the value of the Claims set out in the proxy and voting form. Scheme Creditors should note that information and estimates provided in relation to the proxy and voting form may not be protected by legal professional privilege and may be required to be disclosed in any relevant future legal proceedings. Scheme Creditors should consult their own legal advisers as to the consequences of furnishing such particulars in the event that they are, or may become, involved in any litigation. You should note that any amendments you make to the pre-completed voting form do NOT represent agreed Claims and will be subject to review in accordance with paragraph 4.5 of the Scheme. C Guidance Notes

Instructions for the completion of the proxy form 1 Value of Net total Claim: Insert the value of your claim in respect of the Net total Claim against the Scheme Company as detailed in the Summary Table forming part of the voting form. The value to be attributed for voting purposes to a Scheme Creditor's claims will be determined by the Chairperson as the assessment of the Scheme Company's net liability to the Scheme Creditor in respect of claims after any deduction, set-off or cross claim. The Chairperson's determination shall be based on: (a) the information provided by the Scheme Creditor; (b) the information available to the Scheme Company from its existing records; and (c) advice from the Scheme Actuary applying the principles described in the Estimation Methodology. Account will also be taken of any known deductions, set-off or cross-claim. If the sum of the deduction, set-off or cross-claim exceeds the value of the claims, the value for voting purposes will be zero. For the purposes of voting at the Scheme Meetings, claims will be converted into Australian dollars at the closing mid-market rate of exchange for the relevant currency quoted on the Reserve Bank of Australia website 11 August 2006. 2 Appointment of a proxy: If you wish to appoint the Chairperson as your proxy, mark the box. If the person you wish to appoint as your proxy is someone other than the Chairperson please write the name of that person. If you leave this section blank, or your named proxy does not attend the Scheme Meeting, the Chairperson will be your proxy. A proxy need not be a Scheme Creditor. A proxy may be an individual or a body corporate. 3 Votes on item of business: You should direct your proxy how to vote by placing a mark in one of the three boxes opposite the item of business. All your votes will be voted in accordance with such a direction unless you indicate only a proportion or number of votes are to be voted on an item by inserting the proportion of number of votes you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on the item of business, your proxy may vote as he or she chooses. If you mark more than one box on the item, your vote on that item will be invalid. 4 Signing instructions: You must sign this form as follows in the spaces provided: Individual: the Scheme Creditor must sign. Power of Attorney: to sign under Power of Attorney, either the Power of Attorney must have been lodged with the Scheme Company for notation or the original (or a certified copy) of the Power of Attorney must accompany this form when you return it. Companies: the following person(s) must sign (a) Australian proprietary company with a sole director who is also the sole company secretary - that person; (b) Australian proprietary company with a sole director and no company secretary - that person; (c) other Australian companies - two directors or one director and one company secretary; (d) foreign company - in accordance with the laws of the jurisdiction of incorporation and constituent documents. Please indicate the office held by signing in the appropriate place. Lodgement of a proxy This proxy form (and any Power of Attorney under which it is signed) must be received at an address given below no later than 5:00 pm (Sydney time) on 11 August 2006. Proxy and voting forms may also be handed in at the registration desk at the relevant Scheme Meeting prior to its commencement. Where the appointment of a proxy is signed by the appointer's attorney, a certified copy of the Power of Attorney, or the power itself, must be received by the Scheme Company at the address below or by facsimile transmission by 5:00 pm (Sydney time) on 11 August 2006. If facsimile transmission is used, the Power of Attorney must be certified. Proxy and voting forms may be lodged to the Scheme Company (attention Ross Littlewood) by email to schemes@recentre.com.au, by facsimile to +(61)(02) 92743033 or by post to Level 21, Tower Building, Australia Square, 264 George Street, Sydney NSW 2000. If submitted by facsimile, please also post the original. Instructions for the completion of the voting form The Detailed Tables are for incidents arising under non-proportional Reinsurance Contracts, proportional Reinsurance Contracts and any IBNR held thereunder. You should review your individual list of Reinsurance Contracts, making such amendments or additions to the Detailed Tables as may be necessary and providing appropriate information to support each amendment and/or addition. Your (re)insurance broker, agent or intermediary should be able to assist you in confirming or identifying additional Reinsurance Contracts and reference numbers. A separate Detailed Table and Summary Table must be completed for each currency in which you have a claim. If you need to complete more than one Detailed Table, please complete the Detailed Tables as required. You should update the Summary Table as the Detailed Tables are updated. Please check the information in the Summary Table following completion of the Detailed Tables. You should note that all claims submitted will be subject to review in accordance with paragraph 4.5 of the Scheme. Detailed Tables 1 Currency: claims will be converted into Australian dollars at the closing mid-market rate of exchange for the relevant currency quoted on the Reserve Bank of Australia website. 2 Scheme Company contract reference: specify the Scheme Company reference number in relation to each Reinsurance Contract under which your claim against the Scheme Company is made. 3 Reinsurance Contract name: specify the contract name that identifies the Reinsurance Contract (including type, class/classes of business and layer). This should be as per the original signed slip and/or signed contract wording. 4 Underwriting year: specify the underwriting year to which the loss is ceded. 5 Priority: specify the original attachment point of the Reinsurance Contract. 6 Limit: specify the original maximum payable by the Reinsurance Contract. 7 Index date: if the Reinsurance Contract is subject to indexation, specify the applicable indexation date. 8 Participation %: specify the percentage line underwritten by the Scheme Company for the Reinsurance Contract. 9 Claim name: specify the original insured's name, the event name or some other short description by which the incident is known. 10 Date of loss: specify the date on which the loss under the Reinsurance Contract arises. For event based policies, this is the date the incident occurred. For claims made/claims notified policies, this is the date the incident is notified. 11 Scheme Creditor claim reference number: specify your claim reference number. 12 Scheme Creditor Reinsurance Contract reference number: specify your Reinsurance Contract reference number. 13 Broker claim reference number: specify the Broker's (or agent's or intermediary's) claim reference number. 14 Broker Reinsurance Contract reference number: specify the Broker's (or agent's or intermediary's) Reinsurance Contract reference number. 15 Scheme Company claim reference number: specify the Scheme Company's claim reference number. 16 Ground up loss paid: the net amount paid by the Scheme Creditor applicable to the claim (taking into account any recoveries due from proportional reinsurance, subrogation, input tax credits, decreasing adjustments etc). 17 Ground up loss outstanding: the reserve held by the Scheme Creditor in respect of future amounts payable to settle the claim in accordance with industry practice. Future care costs should be discounted in accordance with industry practice. Where an amount has been provided by the Scheme Company these will be in accordance with the last advice received from the Scheme Creditor or its Broker. 18 Reinsurance Contract incurred: this is the total of columns 16 and 17 applied against columns 5 and 6. Payments which have been made will be adjusted using the applicable indexation rate from the index date in column 7 to the date of each payment. Amounts which have not been paid, will be adjusted using the applicable indexation rate from the index date in column 7 to 30 June 2006. 19 Amount due to Scheme Creditor: specify the amount due to the Scheme Creditor from the Scheme Company. For non-proportional claims this is column 18 multiplied by column 8. For proportional claims this is any current treaty account amounts due to the Scheme Creditor from the Scheme Company. 20 Amount paid to Scheme Creditor: specify the amount paid to the Scheme Creditor as at 30 June 2006. 21 Scheme Company treaty account outstanding claims: this is the amount of outstanding claims as per the last account received multiplied by column 8. 22 Amount outstanding to Scheme Creditor: for non-proportional claims this is column 19 minus column 20. For proportional claims this is column 19 plus column 21. 23 Reinstatement or burning cost premium due: specify any additional premiums due to the Scheme Company but not yet paid as a result of the claim. 24 Unsettled amounts due to Scheme Company: list separately any other amounts in respect of the claims due to the Scheme Company. 25 Latent: specify (yes or no) whether the claim is for a latent claim such as asbestos, silica, etc. 26 IBNR claims: specify the estimated amount of any claim (or where there is more than one claim the aggregated estimated amount of any claims) you have in respect of losses which have been incurred but not reported to the Scheme Company and which are subject to potential recoveries in supporting schedules in accordance with the Scheme and the Estimation Methodology set out in Section 5 of the Scheme Booklet. Summary Table A Net total Claim: specify the total of the entries in column 21. B Total owing to the Scheme Company: specify the total of the entries in columns 22 and 23. C Net balance due to/from Scheme Creditor: this figure is the difference between figures "A" and "B".

Proxy and voting form for Scheme Meeting to be held at the offices of Clayton Utz, Level 34, No 1 O'Connell Street, Sydney NSW 2000 on 15 August 2006 at 10:30 am General

This proxy and voting form is to be used by the Scheme Creditors at the Scheme Meeting to consider, and if thought fit, approve a scheme of arrangement between NRG Victory Australia Limited (ABN 47 002 971 477) (the Scheme Company) and its Scheme Creditors pursuant to, and in accordance with, section 411 of the Corporations Act. Unless separately defined in this proxy and voting form, the defined words and expressions contained within this proxy and voting form and its accompanying Guidance Notes have the meaning given to them in the Scheme Booklet dated 5 July 2006. This document is important and requires your immediate attention. If you are in any doubt as to any aspect of this proposal or as to the action you should take, you should consult your insurance broker or other financial or professional adviser without delay. If it has sufficient information to do so, the Scheme Company has included in this proxy and voting form its estimate of the value of your Claim (other than in respect of IBNR Claims). That estimate is not binding on you and you may replace or amend any detail relating to your Claim that is written on this form if you wish to do so. You should review all pre-completed information carefully to see if it is accurate. This proxy and voting form comprises: A the proxy form; B the voting form; C Guidance Notes for: (i) completion of the proxy form; and (ii) completion of the Summary Table and Detailed Tables; and D the Summary Table and three Detailed Tables (for non-proportional claims, proportional claims, and IBNR claims). A Proxy Form

Insert Name/s I/We Individual or Scheme Creditor

being a Scheme Creditor of the Scheme Company in the sum of: (enter the estimated Net total Claim as detailed in the Summary Table forming part of the voting form) HEREBY APPOINT the Chairperson OR Write here the name of the person you are appointing if this person is someone other than the Chairperson (mark with an 'X')

or failing the person named, or if no person is named, the Chairperson, as my/our proxy to attend, to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit), and to act generally on my/our behalf, at the Scheme Meeting of the Scheme Company to be held at the offices of Clayton Utz, Level 34, No 1 O'Connell Street, Sydney NSW 2000 on 15 August 2006 at 10:30 am and at any adjournment of that Scheme Meeting.

Where more than one proxy is to be appointed or where voting intentions cannot be adequately expressed using this form an additional form of proxy is available on request from the Scheme Company. Proxies will only be valid and accepted by the Scheme Company if they are (a) sent to the Scheme Company at Level 21, Tower Building, Australia Square, 264 George Street, Sydney NSW 2000; or (b) faxed to (02) 9274 3033, so that they are received no later than 5:00 pm (Sydney time) on 11 August 2006. Voting directions to your proxy - please mark X to indicate your direction

Resolution 1 For Against Abstain*c

The Chairperson of the Scheme Meeting intends voting all undirected proxies in favour of the resolution.

• If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll. Signature of Scheme Creditor

This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

Sole Director and Sole Company Secretary/Sole Director (cross out inapplicable capacity) Director Director/Company Secretary (cross out inapplicable capacity) / /

Contact name Contact daytime numbers Date Contact email Facsimile number

This voting form consists of a Summary Table and three Detailed Tables (for non-proportional claims, proportional claims and IBNR claims) and Guidance Notes for completion of the Summary Table and Detailed Tables. The Summary Table and Detailed Tables must be completed in accordance with the Guidance Notes on the following pages. You should read the instructions carefully. Failure to follow them may result in a Claim being rejected in whole or in part for voting purposes if the Chairperson has insufficient information to decide whether it is a fair and reasonable Claim.

The amount of a Claim admitted for voting purposes will not constitute an admission of the existence or amount of any Claim and will not bind the Scheme Company or Scheme Creditor unless the Scheme Creditor accepts the value of the Claims set out in the proxy and voting form. Scheme Creditors should note that information and estimates provided in relation to the proxy and voting form may not be protected by legal professional privilege and may be required to be disclosed in any relevant future legal proceedings. Scheme Creditors should consult their own legal advisers as to the consequences of furnishing such particulars in the event that they are, or may become, involved in any litigation. You should note that any amendments you make to the pre-completed voting form do NOT represent agreed Claims and will be subject to review in accordance with paragraph 4.5 of the Scheme. C Guidance Notes

Instructions for the completion of the proxy form 1 Value of Net total Claim: Insert the value of your claim in respect of the Net total Claim against the Scheme Company as detailed in the Summary Table forming part of the voting form. The value to be attributed for voting purposes to a Scheme Creditor's claims will be determined by the Chairperson as the assessment of the Scheme Company's net liability to the Scheme Creditor in respect of claims after any deduction, set-off or cross claim. The Chairperson's determination shall be based on: (a) the information provided by the Scheme Creditor; (b) the information available to the Scheme Company from its existing records; and (c) advice from the Scheme Actuary applying the principles described in the Estimation Methodology. Account will also be taken of any known deductions, set-off or cross-claim. If the sum of the deduction, set-off or cross-claim exceeds the value of the claims, the value for voting purposes will be zero. For the purposes of voting at the Scheme Meetings, claims will be converted into Australian dollars at the closing mid-market rate of exchange for the relevant currency quoted on the Reserve Bank of Australia website 11 August 2006. 2 Appointment of a proxy: If you wish to appoint the Chairperson as your proxy, mark the box. If the person you wish to appoint as your proxy is someone other than the Chairperson please write the name of that person. If you leave this section blank, or your named proxy does not attend the Scheme Meeting, the Chairperson will be your proxy. A proxy need not be a Scheme Creditor. A proxy may be an individual or a body corporate. 3 Votes on item of business: You should direct your proxy how to vote by placing a mark in one of the three boxes opposite the item of business. All your votes will be voted in accordance with such a direction unless you indicate only a proportion or number of votes are to be voted on an item by inserting the proportion of number of votes you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on the item of business, your proxy may vote as he or she chooses. If you mark more than one box on the item, your vote on that item will be invalid. 4 Signing instructions: You must sign this form as follows in the spaces provided: Individual: the Scheme Creditor must sign. Power of Attorney: to sign under Power of Attorney, either the Power of Attorney must have been lodged with the Scheme Company for notation or the original (or a certified copy) of the Power of Attorney must accompany this form when you return it. Companies: the following person(s) must sign (a) Australian proprietary company with a sole director who is also the sole company secretary - that person; (b) Australian proprietary company with a sole director and no company secretary - that person; (c) other Australian companies - two directors or one director and one company secretary; (d) foreign company - in accordance with the laws of the jurisdiction of incorporation and constituent documents. Please indicate the office held by signing in the appropriate place. Lodgement of a proxy This proxy form (and any Power of Attorney under which it is signed) must be received at an address given below no later than 5:00 pm (Sydney time) on 11 August 2006. Proxy and voting forms may also be handed in at the registration desk at the relevant Scheme Meeting prior to its commencement. Where the appointment of a proxy is signed by the appointer's attorney, a certified copy of the Power of Attorney, or the power itself, must be received by the Scheme Company at the address below or by facsimile transmission by 5:00 pm (Sydney time) on 11 August 2006. If facsimile transmission is used, the Power of Attorney must be certified. Proxy and voting forms may be lodged to the Scheme Company (attention Ross Littlewood) by email to schemes@recentre.com.au, by facsimile to +(61)(02) 92743033 or by post to Level 21, Tower Building, Australia Square, 264 George Street, Sydney NSW 2000. If submitted by facsimile, please also post the original. Instructions for the completion of the voting form The Detailed Tables are for incidents arising under non-proportional Reinsurance Contracts, proportional Reinsurance Contracts and any IBNR held thereunder. You should review your individual list of Reinsurance Contracts, making such amendments or additions to the Detailed Tables as may be necessary and providing appropriate information to support each amendment and/or addition. Your (re)insurance broker, agent or intermediary should be able to assist you in confirming or identifying additional Reinsurance Contracts and reference numbers. A separate Detailed Table and Summary Table must be completed for each currency in which you have a claim. If you need to complete more than one Detailed Table, please complete the Detailed Tables as required. You should update the Summary Table as the Detailed Tables are updated. Please check the information in the Summary Table following completion of the Detailed Tables. You should note that all claims submitted will be subject to review in accordance with paragraph 4.5 of the Scheme. Detailed Tables 1 Currency: claims will be converted into Australian dollars at the closing mid-market rate of exchange for the relevant currency quoted on the Reserve Bank of Australia website. 2 Scheme Company contract reference: specify the Scheme Company reference number in relation to each Reinsurance Contract under which your claim against the Scheme Company is made. 3 Reinsurance Contract name: specify the contract name that identifies the Reinsurance Contract (including type, class/classes of business and layer). This should be as per the original signed slip and/or signed contract wording. 4 Underwriting year: specify the underwriting year to which the loss is ceded. 5 Priority: specify the original attachment point of the Reinsurance Contract. 6 Limit: specify the original maximum payable by the Reinsurance Contract. 7 Index date: if the Reinsurance Contract is subject to indexation, specify the applicable indexation date. 8 Participation %: specify the percentage line underwritten by the Scheme Company for the Reinsurance Contract. 9 Claim name: specify the original insured's name, the event name or some other short description by which the incident is known. 10 Date of loss: specify the date on which the loss under the Reinsurance Contract arises. For event based policies, this is the date the incident occurred. For claims made/claims notified policies, this is the date the incident is notified. 11 Scheme Creditor claim reference number: specify your claim reference number. 12 Scheme Creditor Reinsurance Contract reference number: specify your Reinsurance Contract reference number. 13 Broker claim reference number: specify the Broker's (or agent's or intermediary's) claim reference number. 14 Broker Reinsurance Contract reference number: specify the Broker's (or agent's or intermediary's) Reinsurance Contract reference number. 15 Scheme Company claim reference number: specify the Scheme Company's claim reference number. 16 Ground up loss paid: the net amount paid by the Scheme Creditor applicable to the claim (taking into account any recoveries due from proportional reinsurance, subrogation, input tax credits, decreasing adjustments etc). 17 Ground up loss outstanding: the reserve held by the Scheme Creditor in respect of future amounts payable to settle the claim in accordance with industry practice. Future care costs should be discounted in accordance with industry practice. Where an amount has been provided by the Scheme Company these will be in accordance with the last advice received from the Scheme Creditor or its Broker. 18 Reinsurance Contract incurred: this is the total of columns 16 and 17 applied against columns 5 and 6. Payments which have been made will be adjusted using the applicable indexation rate from the index date in column 7 to the date of each payment. Amounts which have not been paid, will be adjusted using the applicable indexation rate from the index date in column 7 to 30 June 2006. 19 Amount due to Scheme Creditor: specify the amount due to the Scheme Creditor from the Scheme Company. For non-proportional claims this is column 18 multiplied by column 8. For proportional claims this is any current treaty account amounts due to the Scheme Creditor from the Scheme Company. 20 Amount paid to Scheme Creditor: specify the amount paid to the Scheme Creditor as at 30 June 2006. 21 Scheme Company treaty account outstanding claims: this is the amount of outstanding claims as per the last account received multiplied by column 8. 22 Amount outstanding to Scheme Creditor: for non-proportional claims this is column 19 minus column 20. For proportional claims this is column 19 plus column 21. 23 Reinstatement or burning cost premium due: specify any additional premiums due to the Scheme Company but not yet paid as a result of the claim. 24 Unsettled amounts due to Scheme Company: list separately any other amounts in respect of the claims due to the Scheme Company. 25 Latent: specify (yes or no) whether the claim is for a latent claim such as asbestos, silica, etc. 26 IBNR claims: specify the estimated amount of any claim (or where there is more than one claim the aggregated estimated amount of any claims) you have in respect of losses which have been incurred but not reported to the Scheme Company and which are subject to potential recoveries in supporting schedules in accordance with the Scheme and the Estimation Methodology set out in Section 5 of the Scheme Booklet. Summary Table A Net total Claim: specify the total of the entries in column 21. B Total owing to the Scheme Company: specify the total of the entries in columns 22 and 23. C Net balance due to/from Scheme Creditor: this figure is the difference between figures "A" and "B".

NRG London Reinsurance Company Limited Scheme of the Australian branch

Claim Form What is this form: This is a Claim Form in accordance with the scheme of arrangement, between NRG London Reinsurance Company Limited (ABN 77 001 160 792) a company incorporated in England, with limited liability, registered as a foreign company under the Corporations Act (the "Scheme Company") and its Scheme Creditors, the subject of the order of the Court on 16 August 2006 and lodged with ASIC on the same date. Unless separately defined in this Claim Form, the defined words and expressions contained within this Claim Form and its accompanying Guidance Notes have the meaning given to them in the Scheme Booklet dated 5 July 2006. This Claim Form comprises: · this cover page; · the Claim Form (Parts A, B and C); · Guidance Notes for completion of the Summary Table and Detailed Tables; and · the Summary Table and three Detailed Tables (for non-proportional claims, proportional claims, and IBNR claims). What to do with this Claim Form: If you are a Scheme Creditor and have a Claim against the Scheme Company, you should complete, execute and return this Claim Form by 11:59 pm (Sydney time) on the date that is 120 days after the Effective Date. If you have no claim against the Scheme Company you need not take any further action. If you have a claim other than in Australian Dollars (AUD), complete and return additional forms for each additional currency. This document is important and requires your immediate attention. If you are in any doubt as to any aspect of this proposal or as to the action you should take, you should consult your insurance broker or other financial or professional adviser without delay. Choices in completing this Claim Form: In order to submit your claims against the Scheme Company in relation to the Scheme Business, you can either: (a) elect to incorporate the information that was submitted in your proxy and voting form into this Claim Form by ticking the box on the Claim Form attached; or (b) complete or amend the information contained in the Summary Table and Detailed Tables, and execute and submit your claims against the Scheme Company. You should note that any amendments you may have made to the pre completed voting form do NOT represent agreed claims and will be subject to review per provision 4.5 of the Scheme. If you tick the box and make amendments, the Scheme Company will consider the amendments as your claim. To avoid doubt, if there is no change to the information you submitted previously with your proxy and voting form, you need only complete your details on the claim form, place a "ü" in the appropriate currency box, place a "ü" in the box to use the previous details submitted as your claim, sign and return the form. You should note that any amendments you may have made to the pre completed voting form do NOT represent agreed claims and will be subject to review per provision 4.5 of the Scheme. If you did not submit a proxy and voting form previously, or you believe your claim has changed, you must complete the Summary Table and Detailed Tables.

NRG London Reinsurance Company Limited Scheme of the Australian branch Claim Form

Scheme Creditor Contact: ___________________________________________________

Currency: AUDNZD PGKUSDGBPOther (please specify)____________

PART A - PROXY AND VOTING FORM ELECTION PROCEDURE If you agree with the claims information and supporting information that was submitted in the proxy and voting form, you can elect to incorporate this information into this Claim Form by placing a "ü" in the box below. The amount included in that form will become your claim against the Scheme Company. Otherwise proceed to Part B. PROXY AND VOTING FORM ELECTION:

If you elect to incorporate the information included in the proxy and voting form into this Claim Form, you need only execute Part C and return this form. You do not need to provide any additional details. You should note that any amendments you may have made to the pre completed voting form do NOT represent agreed claims and will be subject to review per provision 4.5 of the Scheme.

PART B - CLAIMS SUBMISSION PROCEDURE If you have not completed Part A please complete or amend the pre-completed information in the Summary Table and three Detailed Tables. Any information that has been pre-completed by the Scheme Company is intended to assist you. It is not binding upon you and you may replace or amend any information relating to your Claim if you wish to do so. You should review all pre-completed information carefully to see if it is accurate. In order to submit your claims against the Scheme Company in relation to the Scheme Business, you must complete and return this Claim Form, along with appropriate supporting information, to the Scheme Company, by email (with attachments in Microsoft Word, Microsoft Excel or pdf format only), by fax, or by post, as soon as possible and by no later than the Final Claims Submission Date, being 11:59 pm (Sydney time) on the 120th day after (but not including), the Effective Date (or if such date is not a Business Day, the first Business Day thereafter). After this date, you will not be entitled to submit a Claim Form or a revised Claim Form and no revised or further information will be accepted (except, in the latter case, in response to a request from the Scheme Company or the Scheme Adjudicator). (Step 1): Read the Guidance Notes carefully before completing the Summary Table and Detailed Tables. (Step 2): Complete or amend the individual Detailed Tables making such additions or amendments to the details as may be necessary and provide appropriate supporting information (as described in the Guidance Notes to this Claim Form and in the Estimation Methodology). Please note that any details of claims provided by the Scheme Company in the Detailed Tables is intended to assist you in completing this Claim Form and should not be regarded as a complete and accurate list of all claims you may have that may be affected by the Scheme. (Step 3): Following completion of the Detailed Tables, check and amend if necessary the information in the Summary Table. (Step 4): Execute this Claim Form (Part C) in accordance with the execution instructions. (Step 5): Submit this Claim Form by the date that is 120 days after the Effective Date to the Scheme Company (attention Ross Littlewood) by email (with any attachments in Microsoft Word, Microsoft Excel or pdf format only) to schemes@recentre.com.au, by fax to +(61)(02) 92743033 or by post c/o GPO Box 3973, Sydney, NSW, 2001 Australia. If submitted by email or facsimile, please also post the original. PART C - EXECUTION (TO BE COMPLETED BY ALL SCHEME CREDITORS)

The Scheme Creditor represents and warrants to the Scheme Company that the information contained in this Claim Form as amended or otherwise and any supporting information, is complete and accurate.

Signed by the Scheme Creditorin the presence of: Signature

Signed for and on behalf of the Scheme Creditor by the Attorney under a Power of Attorney and the Attorney declares that the Attorney has not received any notice of the revocation of such Power of Attorney, in the presence of: Signature of Attorney

Signature of Witness Name of Attorney in full Name of Witness in full

Executed by the Scheme Creditorin accordance with section 127 of the Corporations Act or if incorporated outside Australia, in accordance with the laws of its place of incorporation by or in the presence of:

Signature of Secretary/other Director Signature of Director or Sole Director and Secretary Name of Secretary/other Director in full Name of Director or Sole Director and Secretary in full

Execution instructions You must sign this Claim Form as follows in the spaces provided: Individual the individual must sign in the presence of a witness. Power of Attorney to sign under Power of Attorney, either the Power of Attorney must have already been lodged with the Scheme Company for notation or the original (or a certified copy) of the Power of Attorney must accompany this document. Companies the following person(s) must sign: (a) Australian proprietary company with a sole director who is also the sole company secretary - that person; (b) Australian proprietary company with a sole director and no company secretary - that person; (c) other Australian companies - two directors or one director and one company secretary; (d) foreign company - in accordance with the laws of the jurisdiction of incorporation and constituent documents.

GUIDANCE NOTES Instructions for the completion of the Summary Table and the Detailed Tables The Detailed Tables are for incidents arising under non-proportional Reinsurance Contracts, proportional Reinsurance Contracts and any IBNR held thereunder. You should review your individual list of Reinsurance Contracts, making such amendments or additions to the Detailed Tables as may be necessary and providing appropriate information to support each amendment and/or addition. Your (re)insurance broker, agent or intermediary should be able to assist you in confirming or identifying additional Reinsurance Contracts and reference numbers. A separate Detailed Table and Summary Table must be completed for each currency in which you have a claim. If you need to complete more than one Detailed Table, please complete the Detailed Tables as required. You should update the Summary Table as the Detailed Tables are updated. Please check the information in the Summary Table following completion of the Detailed Tables. You should note that all claims submitted will be subject to review per provision 4.5 of the Scheme. Detailed Tables 1 Currency: enter the currency of the claims. A separate Detailed Table needs to be completed in respect of each different currency. 2 Scheme Company contract reference: specify the Scheme Company reference number in relation to each Reinsurance Contract under which your claim against the Scheme Company is made. 3 Reinsurance Contract name: specify the contract name that identifies the Reinsurance Contract (including type, class/classes of business and layer). This should be as per the original signed slip and/or signed contract wording. 4 Underwriting year: specify the underwriting year to which the loss is ceded. 5 Priority: specify the original attachment point of the Reinsurance Contract. 6 Limit: specify the original maximum payable by the Reinsurance Contract. 7 Index date: if the Reinsurance Contract is subject to indexation, specify the applicable indexation date. 8 Participation %: specify the percentage line underwritten by the Scheme Company for the Reinsurance Contract. 9 Claim name: specify the original insured's name, the event name or some other short description by which the incident is known. 10 Date of loss: specify the date on which the loss under the Reinsurance Contract arises. For event based policies, this is the date the incident occurred. For claims made/claims notified policies, this is the date the incident is notified. 11 Scheme Creditor claim reference number: specify your claim reference number. 12 Scheme Creditor Reinsurance Contract reference number: specify your Reinsurance Contract reference number. 13 Broker claim reference number: specify the Broker's (or agent's or intermediary's) claim reference number. 14 Broker Reinsurance Contract reference number: specify the Broker's (or agent's or intermediary's) Reinsurance Contract reference number. 15 Scheme Company claim reference number: specify the Scheme Company's claim reference number. 16 Ground up loss paid: the net amount paid by the Scheme Creditor applicable to the claim (taking into account any recoveries due from proportional reinsurance, subrogation, input tax credits, decreasing adjustments etc). 17 Ground up loss outstanding: the reserve held by the Scheme Creditor in respect of future amounts payable to settle the claim in accordance with industry practice. Future care costs should be discounted in accordance with industry practice. Where an amount has been provided by the Scheme Company these will be in accordance with the last advice received from the Scheme Creditor or its Broker. 18 Reinsurance Contract incurred: this is the total of columns 16 and 17 applied against columns 5 and 6. Payments which have been made will be adjusted using the applicable indexation rate from the index date in column 7 to the date of each payment. Amounts which have not been paid, will be adjusted using the applicable indexation rate from the index date in column 7 to 30 June 2006. 19 Amount due to Scheme Creditor: specify the amount due to the Scheme Creditor from the Scheme Company. For non-proportional claims this is column 18 multiplied by column 8. For proportional claims this is any current treaty account amounts due to the Scheme Creditor from the Scheme Company. 20 Amount paid to Scheme Creditor: specify the amount paid to the Scheme Creditor as at 30 June 2006. 21 Scheme Company treaty account outstanding claims: this is the amount of outstanding claims as per the last account received multiplied by column 8. 22 Amount outstanding to Scheme Creditor: for non-proportional claims this is column 19 minus column 20. For proportional claims this is column 19 plus column 21. 23 Reinstatement or burning cost premium due: specify any additional premiums due to the Scheme Company but not yet paid as a result of the claim. 24 Unsettled amounts due to Scheme Company: list separately any other amounts in respect of the claims due to the Scheme Company. 25 Latent: specify (yes or no) whether the claim is for a latent claim such as asbestos, silica, etc. 26 IBNR claims: specify the estimated amount of any claim (or where there is more than one claim the aggregated estimated amount of any claims) you have in respect of losses which have been incurred but not reported to the Scheme Company and which are subject to potential recoveries in supporting schedules in accordance with the Scheme and the Estimation Methodology set out in Section 5 of the Scheme Booklet. Summary Table A Net total Claim: specify the total of the entries in column 21. B Total owing to the Scheme Company: specify the total of the entries in columns 22 and 23. C Net balance due to/from Scheme Creditor: this figure is the difference between figures "A" and "B". You are requested to return this Claim Form, together with supporting information, to the Scheme Company by one of the means described on the Claim Form by the date that is 120 days after the Effective Date.

Claim Form What is this form: This is a Claim Form in accordance with the scheme of arrangement, between NRG Victory Australia Limited (ABN 47 002 971 477) (the "Scheme Company") and its Scheme Creditors, the subject of the order of the Court on 16 August 2006 and lodged with ASIC on the same date. Unless separately defined in this Claim Form, the defined words and expressions contained within this Claim Form and its accompanying Guidance Notes have the meaning given to them in the Scheme Booklet dated 5 July 2006. This Claim Form comprises: · this cover page; · the Claim Form (Parts A, B and C); · Guidance Notes for completion of the Summary Table and Detailed Tables; and · the Summary Table and three Detailed Tables (for non-proportional claims, proportional claims, and IBNR claims). What to do with this Claim Form: If you are a Scheme Creditor and have a Claim against the Scheme Company, you should complete, execute and return this Claim Form by 11:59 pm (Sydney time) on the date that is 120 days after the Effective Date. If you have no claim against the Scheme Company you need not take any further action. If you have a claim other than in Australian Dollars (AUD), complete and return additional forms for each additional currency. This document is important and requires your immediate attention. If you are in any doubt as to any aspect of this proposal or as to the action you should take, you should consult your insurance broker or other financial or professional adviser without delay. Choices in completing this Claim Form: In order to submit your claims against the Scheme Company in relation to the Scheme Business, you can either: (a) elect to incorporate the information that was submitted in your proxy and voting form into this Claim Form by ticking the box on the Claim Form attached; or (b) complete or amend the information contained in the Summary Table and Detailed Tables, and execute and submit your claims against the Scheme Company. You should note that any amendments you may have made to the pre completed voting form do NOT represent agreed claims and will be subject to review per provision 4.5 of the Scheme. If you tick the box and make amendments, the Scheme Company will consider the amendments as your claim. To avoid doubt, if there is no change to the information you submitted previously with your proxy and voting form, you need only complete your details on the claim form, place a "ü" in the appropriate currency box, place a "ü" in the box to use the previous details submitted as your claim, sign and return the form. You should note that any amendments you may have made to the pre completed voting form do NOT represent agreed claims and will be subject to review per provision 4.5 of the Scheme. If you did not submit a proxy and voting form previously, or you believe your claim has changed, you must complete the Summary Table and Detailed Tables.

Scheme Creditor Contact: ___________________________________________________

Currency: AUDNZD PGKUSDGBPOther (please specify)____________

PART A - PROXY AND VOTING FORM ELECTION PROCEDURE If you agree with the claims information and supporting information that was submitted in the proxy and voting form, you can elect to incorporate this information into this Claim Form by placing a "ü" in the box below. The amount included in that form will become your claim against the Scheme Company. Otherwise proceed to Part B. PROXY AND VOTING FORM ELECTION:

If you elect to incorporate the information included in the proxy and voting form into this Claim Form, you need only execute Part C and return this form. You do not need to provide any additional details. You should note that any amendments you may have made to the pre completed voting form do NOT represent agreed claims and will be subject to review per provision 4.5 of the Scheme.

PART B - CLAIMS SUBMISSION PROCEDURE If you have not completed Part A please complete or amend the pre-completed information in the Summary Table and three Detailed Tables. Any information that has been pre-completed by the Scheme Company is intended to assist you. It is not binding upon you and you may replace or amend any information relating to your Claim if you wish to do so. You should review all pre-completed information carefully to see if it is accurate. In order to submit your claims against the Scheme Company in relation to the Scheme Business, you must complete and return this Claim Form, along with appropriate supporting information, to the Scheme Company, by email (with attachments in Microsoft Word, Microsoft Excel or pdf format only), by fax, or by post, as soon as possible and by no later than the Final Claims Submission Date, being 11:59 pm (Sydney time) on the 120th day after (but not including), the Effective Date (or if such date is not a Business Day, the first Business Day thereafter). After this date, you will not be entitled to submit a Claim Form or a revised Claim Form and no revised or further information will be accepted (except, in the latter case, in response to a request from the Scheme Company or the Scheme Adjudicator). (Step 1): Read the Guidance Notes carefully before completing the Summary Table and Detailed Tables. (Step 2): Complete or amend the individual Detailed Tables making such additions or amendments to the details as may be necessary and provide appropriate supporting information (as described in the Guidance Notes to this Claim Form and in the Estimation Methodology). Please note that any details of claims provided by the Scheme Company in the Detailed Tables is intended to assist you in completing this Claim Form and should not be regarded as a complete and accurate list of all claims you may have that may be affected by the Scheme. (Step 3): Following completion of the Detailed Tables, check and amend if necessary the information in the Summary Table. (Step 4): Execute this Claim Form (Part C) in accordance with the execution instructions. (Step 5): Submit this Claim Form by the date that is 120 days after the Effective Date to the Scheme Company (attention Ross Littlewood) by email (with any attachments in Microsoft Word, Microsoft Excel or pdf format only) to schemes@recentre.com.au, by fax to +(61)(02) 92743033 or by post c/o GPO Box 3973, Sydney, NSW, 2001 Australia. If submitted by email or facsimile, please also post the original. PART C - EXECUTION (TO BE COMPLETED BY ALL SCHEME CREDITORS)

The Scheme Creditor represents and warrants to the Scheme Company that the information contained in this Claim Form as amended or otherwise and any supporting information, is complete and accurate.

Signed by the Scheme Creditorin the presence of: Signature

Signed for and on behalf of the Scheme Creditor by the Attorney under a Power of Attorney and the Attorney declares that the Attorney has not received any notice of the revocation of such Power of Attorney, in the presence of: Signature of Attorney

Signature of Witness Name of Attorney in full Name of Witness in full

Executed by the Scheme Creditorin accordance with section 127 of the Corporations Act or if incorporated outside Australia, in accordance with the laws of its place of incorporation by or in the presence of:

Signature of Secretary/other Director Signature of Director or Sole Director and Secretary Name of Secretary/other Director in full Name of Director or Sole Director and Secretary in full

Execution instructions You must sign this Claim Form as follows in the spaces provided: Individual the individual must sign in the presence of a witness. Power of Attorney to sign under Power of Attorney, either the Power of Attorney must have already been lodged with the Scheme Company for notation or the original (or a certified copy) of the Power of Attorney must accompany this document. Companies the following person(s) must sign: (a) Australian proprietary company with a sole director who is also the sole company secretary - that person; (b) Australian proprietary company with a sole director and no company secretary - that person; (c) other Australian companies - two directors or one director and one company secretary; (d) foreign company - in accordance with the laws of the jurisdiction of incorporation and constituent documents.

GUIDANCE NOTES Instructions for the completion of the Summary Table and the Detailed Tables The Detailed Tables are for incidents arising under non-proportional Reinsurance Contracts, proportional Reinsurance Contracts and any IBNR held thereunder. You should review your individual list of Reinsurance Contracts, making such amendments or additions to the Detailed Tables as may be necessary and providing appropriate information to support each amendment and/or addition. Your (re)insurance broker, agent or intermediary should be able to assist you in confirming or identifying additional Reinsurance Contracts and reference numbers. A separate Detailed Table and Summary Table must be completed for each currency in which you have a claim. If you need to complete more than one Detailed Table, please complete the Detailed Tables as required. You should update the Summary Table as the Detailed Tables are updated. Please check the information in the Summary Table following completion of the Detailed Tables. You should note that all claims submitted will be subject to review per provision 4.5 of the Scheme. Detailed Tables 1 Currency: enter the currency of the claims. A separate Detailed Table needs to be completed in respect of each different currency. 2 Scheme Company contract reference: specify the Scheme Company reference number in relation to each Reinsurance Contract under which your claim against the Scheme Company is made. 3 Reinsurance Contract name: specify the contract name that identifies the Reinsurance Contract (including type, class/classes of business and layer). This should be as per the original signed slip and/or signed contract wording. 4 Underwriting year: specify the underwriting year to which the loss is ceded. 5 Priority: specify the original attachment point of the Reinsurance Contract. 6 Limit: specify the original maximum payable by the Reinsurance Contract. 7 Index date: if the Reinsurance Contract is subject to indexation, specify the applicable indexation date. 8 Participation %: specify the percentage line underwritten by the Scheme Company for the Reinsurance Contract. 9 Claim name: specify the original insured's name, the event name or some other short description by which the incident is known. 10 Date of loss: specify the date on which the loss under the Reinsurance Contract arises. For event based policies, this is the date the incident occurred. For claims made/claims notified policies, this is the date the incident is notified. 11 Scheme Creditor claim reference number: specify your claim reference number. 12 Scheme Creditor Reinsurance Contract reference number: specify your Reinsurance Contract reference number. 13 Broker claim reference number: specify the Broker's (or agent's or intermediary's) claim reference number. 14 Broker Reinsurance Contract reference number: specify the Broker's (or agent's or intermediary's) Reinsurance Contract reference number. 15 Scheme Company claim reference number: specify the Scheme Company's claim reference number. 16 Ground up loss paid: the net amount paid by the Scheme Creditor applicable to the claim (taking into account any recoveries due from proportional reinsurance, subrogation, input tax credits, decreasing adjustments etc). 17 Ground up loss outstanding: the reserve held by the Scheme Creditor in respect of future amounts payable to settle the claim in accordance with industry practice. Future care costs should be discounted in accordance with industry practice. Where an amount has been provided by the Scheme Company these will be in accordance with the last advice received from the Scheme Creditor or its Broker. 18 Reinsurance Contract incurred: this is the total of columns 16 and 17 applied against columns 5 and 6. Payments which have been made will be adjusted using the applicable indexation rate from the index date in column 7 to the date of each payment. Amounts which have not been paid, will be adjusted using the applicable indexation rate from the index date in column 7 to 30 June 2006. 19 Amount due to Scheme Creditor: specify the amount due to the Scheme Creditor from the Scheme Company. For non-proportional claims this is column 18 multiplied by column 8. For proportional claims this is any current treaty account amounts due to the Scheme Creditor from the Scheme Company. 20 Amount paid to Scheme Creditor: specify the amount paid to the Scheme Creditor as at 30 June 2006. 21 Scheme Company treaty account outstanding claims: this is the amount of outstanding claims as per the last account received multiplied by column 8. 22 Amount outstanding to Scheme Creditor: for non-proportional claims this is column 19 minus column 20. For proportional claims this is column 19 plus column 21. 23 Reinstatement or burning cost premium due: specify any additional premiums due to the Scheme Company but not yet paid as a result of the claim. 24 Unsettled amounts due to Scheme Company: list separately any other amounts in respect of the claims due to the Scheme Company. 25 Latent: specify (yes or no) whether the claim is for a latent claim such as asbestos, silica, etc. 26 IBNR claims: specify the estimated amount of any claim (or where there is more than one claim the aggregated estimated amount of any claims) you have in respect of losses which have been incurred but not reported to the Scheme Company and which are subject to potential recoveries in supporting schedules in accordance with the Scheme and the Estimation Methodology set out in Section 5 of the Scheme Booklet. Summary Table A Net total Claim: specify the total of the entries in column 21. B Total owing to the Scheme Company: specify the total of the entries in columns 22 and 23. C Net balance due to/from Scheme Creditor: this figure is the difference between figures "A" and "B". You are requested to return this Claim Form, together with supporting information, to the Scheme Company by one of the means described on the Claim Form by the date that is 120 days after the Effective Date.

Copies of the following documents are available for inspection at Level 21, Tower Building, Australia Square, 264 George Street, Sydney, NSW, 2000, Australia between the hours of 9.30am and 4:30pm (Sydney time) on business days prior to the date of the Scheme Meetings: the reports of financial position and financial performance of the Scheme Companies as at 31 December 2005 (although there are no financial reports of the Australian branch of NRG London distinct from the financial reports of NRG London as a whole); and

The Scheme Companies will post a copy of the financial reports referred to in (a) above, to any Scheme Creditor upon request. Impact on non-Scheme Creditors of Scheme Companies

The Schemes will not affect the interests of creditors of the Scheme Companies, other than the Scheme Creditors. The Scheme Companies have paid and are paying all of their respective creditors within normal terms of trade. Each Scheme Company is solvent and is trading in an ordinary commercial manner. Authorisations under Insurance Act 1973

NRG London authorisation under the Insurance Act 1973 provides that: "1 NRG London Reinsurance Company Limited may only conduct insurance business in Australia for the sole purpose of discharging liabilities under policies entered into prior to 18 June 2002. 2 Assets in Australia of NRG London Reinsurance Company Limited are not to be: a) removed from Australia; b)used to discharge liabilities outside Australia; or c)charged for the benefit of any person outside Australia EXCEPT i) to discharge NRG London Reinsurance Company Limited's liabilities under insurance contracts in respect of which premiums are remitted to Australia; ii) to make premium payments due outside Australia under reinsurance arrangements approved by APRA; and iii) where APRA's consent in writing is obtained beforehand." NRG Victory

The authorisation of NRG Victory under the Insurance Act 1973 provides that: "1 The Company may only conduct insurance business in Australia for the sole purpose of discharging liabilities that arose under policies entered into prior to October 1993. 2 The Board of the Company must have a minimum of 3 directors. 3 It is intended that the requirement in condition 2 shall apply to the Company to the exclusion of paragraphs 18(a) and 20 of Prudential Standard GPS 220 made under s 32 of the Act, but without prejudice to the Company's obligation to otherwise comply with prudential standards and guidance notes." APRA

A copy of this Scheme Booklet has been provided to APRA. Neither APRA nor any of its officers take any responsibility for the contents of this Scheme Booklet. APRA has no formal role in relation to schemes of arrangement pursuant to section 411 of the Corporations Act, but in its capacity of prudential regulator of general insurers has confirmed by letter of 29 June 2006 that it has no objection to the Schemes proceeding. ASIC

A copy of this Scheme Booklet has been lodged with ASIC under section 412(6) of the Corporations Act. ASIC has been requested to provide a statement that ASIC has no objection to the Schemes. If ASIC provides this statement, then it will be produced to the Court at the time of the Court hearing to approve the Schemes. Neither ASIC nor any of its officers takes any responsibility for the contents of this Scheme Booklet. ASIC has granted the Scheme Companies relief from disclosure of material otherwise required by paragraphs 8201 and sub-paragraphs 8203(a), (b) and (d), of Part 2 of Schedule 8 of the Corporations Regulations 2001 (Cth). Directors and Directors' interests

The directors of the Scheme Companies are: NRG London Reinsurance Company Limited NRG Victory Australia Limited Martin Richard Baker Willem (Bill) Klaas Dikland Alan John Boyce Ross Littlewood Willem (Bill) Klaas Dikland Nancy Jane Milne Laurence Royden Maxfield Paul Mitchelson

None of the directors has any material interests (whether as director or as member or as creditor of any Scheme Company of which he is a director) in the matters that are proposed to be subject to the Schemes except as disclosed in this Scheme Booklet. In particular: none of the directors of the Scheme Companies is a Scheme Creditor or shareholder of the Scheme Companies; and

the Schemes will not affect the directors' interest in or as directors of the Scheme Companies and no additional remuneration will be received by them under the terms of the Schemes.

Ms Milne and Mr Hutchinson, chairperson and alternate chairperson of the Scheme Meetings, are however directors of Zurich Pty Ltd which is a potential Scheme Creditor. Scheme Adjudicator and Scheme Adjudicator's Interests

The Scheme Adjudicator is Mark Moyes. Experience Mark Moyes is the Managing Director of the consultancy firm 3 red Pty Ltd. He has extensive knowledge of international insurance transactions and of Asia Pacific insurance and reinsurance. Mr Moyes has worked in the insurance industry for over 30 years. Prior to joining 3 red Pty Ltd, he was the Chief Executive Officer of the Claims Management Group Limited, Asia Pacific (from April 2005 to February 2006) and Reinsurance Australia Corporation Limited, Run-off Services (from March 1994 to March 2005). Mr Moyes has broad market experience in insurance claims management and related services provided to insurance and reinsurance companies such as reinsurance debt collection and run-off of insurance liabilities. Mr Moyes has advised insurance and reinsurance companies, self-insurers and governments on all aspects of their insurance business, ranging from claims management advice and service to self-managed run-off. Mr Moyes received his LLB from the University of Technology, Sydney in 1984 and was admitted as a Barrister of the Supreme Court of New South Wales in 1988. He has published a number of articles for the Australian Insurance Institute Journal. Interests Any remuneration, costs, charges and expenses incurred by the Scheme Adjudicator shall be paid by the Scheme Companies except that, in respect of a particular Disputed Claim, the Scheme Adjudicator may apportion his remuneration, costs, charges and expenses between the relevant Scheme Company and the Scheme Creditor (see clause 4.6(j) of the Scheme). Whilst the Scheme Companies may, at the option of the Scheme Adjudicator, discharge the remuneration, costs, charges and expenses apportioned to the Scheme Creditor, the Scheme Creditor shall be obligated to reimburse the relevant Scheme Company any amounts so discharged. The Scheme Company may, in its absolute discretion, deduct any amount to be paid by the Scheme Creditor to the Scheme Adjudicator from the Scheme Creditor's Agreed Claim (Pre Set-Off). The Scheme Adjudicator is not a Scheme Creditor, shareholder or director of either Scheme Company. The Scheme Adjudicator's remuneration is not dependent on the level at which Claims are adjudicated under the Scheme. Scheme Actuary and Scheme Actuary's Interest

The Scheme Actuary is Scott Collings of Finity Consulting Pty Limited. Experience Scott Collings is a Fellow of the Institute of Actuaries of Australia and a Director of Finity Consulting Pty Limited. He has been employed by Finity Consulting Pty Limited (formerly Trowbridge) since 1988. Mr Collings qualified as an actuary in 1994 after graduating from the University of New South Wales in 1988 with honours in electrical engineering. He is based in Finity Consulting Pty Limited's Sydney office. During his 18 years of general insurance consulting, Mr Collings has been involved in a wide range of projects covering pricing, reserving and capital management advice to private sector insurers and reinsurers, as well as government accident compensation schemes. In particular, he has been employed as a consultant by NRG Victory and NRG London for over 10 years, providing actuarial valuation and related services. He is currently Approved Actuary to four licensed general insurers: NRG Victory, NRG London, Lumley General Insurance and Wesfarmers Federation Insurance. As part of his responsibilities as the Approved Actuary to NRG Victory and NRG London, Mr Collings provides advice to the Scheme Companies in respect of its reserves. Mr Colling's responsibilities at Finity Consulting Pty Limited include managing the firm's Volatility and Capital Management (VCM) practice. Within the VCM practice he has prepared advice for a number of major local and overseas insurers with a focus on capital management issues such as the development of operational capital targets, risk-based allocation of capital, dividend strategy, asset mix optimisation and the analysis and restructuring of reinsurance programs. Interests The Scheme Actuary is not a Scheme Creditor, shareholder or director of either Scheme Company. The Scheme Actuary's fees will be payable by the Scheme Companies. The Scheme Actuary's remuneration is not dependent upon the level at which Claims are agreed under the Schemes. Chairperson and chairperson's interest

The chairperson is Nancy Milne. Experience Ms Milne is an experienced company director. She is currently chairperson of Recovre Holdings Limited and director of a number of companies including NRG Victory, Zurich Pty Ltd and Munich Holdings Australasia Limited. Ms Milne is also one of Australia's leading insurance and reinsurance lawyers with over 20 years experience. She is a consultant to and former partner of Clayton Utz and has acted for insureds, insurers, fund managers, professional organisations, and directors. Ms Milne is currently the Chair of the International Bar Association's Insurance Committee. She is a member of the International Insurance Society and the Australian Insurance Law Association. In 2003, Ms Milne was appointed by The Minister for Revenue and Assistant Treasurer, and Parliament Secretary to the Treasurer, to conduct a review of the Insurance Contracts Act 1984 with Mr Alan Cameron AM. This appointment recognised Ms Milne's pre-eminent position in the financial services industry. In addition, she was appointed as one of six non-government members of the Commonwealth's Medical Indemnity Policy Review Panel. Interests Ms Milne is not a Scheme Creditor of either Scheme Company. Ms Milne is a director of NRG Victory. Ms Milne is also a director of Zurich Pty Ltd which is a potential Scheme Creditor. Legal advisers' interest

Clayton Utz is the Australian legal adviser to the Scheme Companies in relation to the Schemes. It is not a Scheme Creditor, shareholder or director of either Scheme Company (although Nancy Milne, a director of NRG Victory, is a consultant to and was a former partner of Clayton Utz). Clayton Utz's fees are payable by the Scheme Companies. Clayton Utz is named for information purposes only and: has not authorised or caused the issue of this Scheme Booklet;

has not made any statement in this Scheme Booklet, or any statement on which any statement in this Scheme Booklet is based; and

to the maximum extent permitted by law, expressly disclaims and take no responsibility for any statements in or omissions from this Scheme Booklet.

Other than as set out in this Scheme Booklet, each Scheme Company is not aware of any information that is material to the making of a decision by a Scheme Creditor as to how to vote in respect of each Scheme. Date of Scheme Booklet

This Scheme Booklet is dated 5 July 2006. Summary Table and Detailed Tables

The Summary Table and Detailed Tables that follow form part of each proxy and voting form in Section 8 and each Claim Form in Section 9.

SCHEME CREDITOR NAME: CURRENCY: AUD

See the "Guidance Notes" to complete. Please complete a separate Summary Table and Detailed Tables for each different currency in which you have a claim.

Claim type Total Claim Total owing to Scheme Company Net balance due to/from Scheme Company (A) (B) (A - B = C) Non-proportional Claim - - - Proportional Claim - - - IBNR Claim - - - TOTAL CLAIM - - -

1 Currency AUD 2 3 4 5 6 7 8 9 10 11 13 15 16 17 18 19 20 22 23 24 Scheme Company contract reference Reinsurance Contract name Underwriting year Priority Limit Index date Participation % Claim name Date of Loss Scheme Creditor claim reference number Broker claim reference number Scheme Company claim reference number Ground up loss paid Ground up loss outstanding Reinsurance Contract incurred Amount due to Scheme Creditor Amount paid to Scheme Creditor Amount outstanding to Scheme Creditor Reinstatement or burning cost premium due Unsettled amounts due to Scheme Company

(A) Total Claim - (B) Totals owing to Scheme Company - -

1 Currency AUD 2 3 4 8 12 14 19 21 22 24 Scheme Company contract reference Reinsurance Contract name Underwriting year Participation % Scheme Creditor Reinsurance Contract reference number Broker Reinsurance Contract reference number Amount due to Scheme Creditor Scheme Company Treaty Account outstanding claims Amount outstanding to Scheme Creditor Unsettled amounts due to Scheme Company

(A) Total Claim - (B) Total owing to Scheme Company -

1 Currency AUD 2 4 8 12 14 25 26 Scheme Company contract reference Underwriting year Participation % Scheme Creditor Reinsurance Contract reference number Broker Reinsurance Contract reference number Latent IBNR claim

(A) Total Claim -

The following definitions are summary definitions used in the Scheme Booklet. They are qualified in their entirety by the definitions within the Schemes set out in Section 6. In this Scheme Booklet, unless the context otherwise requires: "Agreed Claim (Pre Set-Off)" means the amount agreed, determined or otherwise adjudicated as being due in respect of a Scheme Creditor's Claim prior to set-off and relevant deductions in accordance with the relevant Scheme. "Alternative Claim Form" means the claim form setting out the values a Scheme Company is prepared to accept in respect of a Scheme Creditors' Claim. "ANIP" means the Australian Nuclear Insurance Pool. "APRA" means the Australian Prudential Regulation Authority. "ASIC" means Australian Securities and Investments Commission. "Best Estimate" means the average of the distribution of outcomes. A best estimate basis should be used by all Scheme Creditors when estimating Claim reserves. "Business Day" means any day other than a Saturday, Sunday or public holiday on which banks are not generally open for business in Sydney. "Chairperson" in respect of a Scheme Meeting, means Nancy Milne or in her absence, Ian Hutchinson, except that in the case of any decision or determination in relation to which Nancy Milne or Ian Hutchinson has a conflict of interest, the chairperson will be Mark Moyes, the Scheme Adjudicator. "Claim" means any claim against a Scheme Company in respect of a Liability under or in relation to a Reinsurance Contract written by or on behalf of a Scheme Company. "Claim Form" means the form to be sent out to Scheme Creditors in accordance with a Scheme and to be completed by Scheme Creditors prior to the Claims Submission Date in order to have their Claims against the applicable Scheme Company agreed or determined. "Claims Submission Date" means the deadline for submitting completed Claim Forms, being 120 days after the Effective Date. "Corporations Act" means the Corporations Act 2001 (Cth). "Court" means the Federal Court of Australia. "Disputed Claim" means a Claim referred to the Scheme Adjudicator. "Disputed Final Determined Claim Notice" means the notice that a Scheme Creditor must issue to the Scheme Company within 30 days of the Final Determined Claim Notification Date disputing the value which the Scheme Company has attributed to its Final Determined Claim. "Dispute Resolution Procedure" means the process of adjudication of Disputed Claims by the Scheme Adjudicator. "Effective Date" means, in relation to each Scheme Company, the date on which the office copy of the Court order is lodged with ASIC. "Estimation Methodology" means the methodology used in determining Claims as set out in Section 5. "Excluded Liabilities" means any Liability in respect of: (a) in the case of NRG London (Australian branch), Reinsurance Contracts not written through its Australian branch; (b) in the case of NRG Victory, Reinsurance Contracts which were transferred to Life Reinsurance of Australasia in 1993 (now Hannover Life Re of Australasia Ltd) under the Life Insurance Act 1945 (Cth). "Final Determined Claim" means an amount agreed, determined or otherwise adjudicated as being due in respect of the Scheme Creditor's Claim after set-off and relevant deductions applied pursuant to the relevant Scheme. "Final Determined Claim Notification Date" means the date a Scheme Company notifies a Scheme Creditor of the value attributed to its Final Determined Claim following its determination. "GST" has the meaning given to it in the A New Tax System (Goods and Services Tax) Act 1999 (Cth). "Guidance Notes" means the guidance notes in respect of the Claim Form explaining how to access, obtain, complete, amend and submit a Claim Form, and the manner in which a Scheme Creditor may provide any supporting documentation to the Scheme Company. "IBNR" means Scheme Liabilities of a Scheme Creditor in respect of losses which as at the Valuation Date have been incurred but not yet reported by the Scheme Creditor to a Scheme Company. "IBNR Claims" means a Claim under a Reinsurance Contract based on Liabilities of the Scheme Company, in respect of losses which have been incurred but have not been reported to the Scheme Company, and which are subject to potential recoveries under a Reinsurance Contract with the Scheme Company. "Liability" means any debt or liability (being a liability to pay money or money's worth) of a person whether it is present or future, certain or contingent, whether its amount is fixed or liquidated, or is capable of being ascertained by fixed rules or as a matter of opinion, including any liability under any enactment (in Australia or in any other jurisdiction) and any liability in contract, tort or bailment or arising out of an obligation to make restitution or in any manner whatsoever provided that such expression does not include any debt or liability which is barred by statute under Australian law or the law of any other jurisdiction which applies to that liability or is otherwise unenforceable. For the avoidance of doubt, where any obligation or liability under a contract or policy is void or, being voidable, have been duly avoided, no obligation or liability shall arise in respect of such obligation or liability. "Long Stop Date" means the expiry date for any Claim which has not been agreed between a Scheme Company and its Scheme Creditor by 11:59 pm Sydney time on the day on which the period of 365 days from the Claims Submission Date has elapsed. "Notified Outstanding Claims" means a Claim under a Reinsurance Contract based on Liabilities of a Scheme Company in respect of losses which have been notified to the Scheme Company but not yet become Paid Losses and which are subject to potential recoveries under a Reinsurance Contract. "NRG London" means NRG London Reinsurance Company Limited ABN 77 001 160 792. "NRG Victory" means NRG Victory Australia Limited ABN 47 002 971 477. "Paid Losses" means Liabilities of the Scheme Company in respect of losses of a Scheme Creditor arising pursuant to Scheme Business which have been notified to the Scheme Company which are certain in amount. "Proceedings" means any form of proceedings in any jurisdiction or forum including, without limitation, any legal proceedings, demand, arbitration, alternative dispute resolution procedure, judicial review, adjudication, mediation, execution, seizure, distraint, forfeiture, re-entry, enforcement of judgment or enforcement of any security or any step taken for the purpose of creating or enforcing a lien. "Property" means all forms of property and obligations (including money, goods, things in action, land and every description of property wherever situated) and every description of interest, whether present, future, vested or contingent or arising out of or incidental to, property and including for the avoidance of doubt, all contributions to the assets of the relevant Scheme Company. "Reinsurance Contract" means any inwards contract or policy of insurance, reinsurance or retrocession of any kind whatsoever in respect of which a Scheme Company may have Liabilities except those in respect of which the Liability of the Scheme Company would be an Excluded Liability. "Schemes" means the schemes of arrangement pursuant to section 411 of the Corporations Act. "Scheme Actuary" means Scott Collings of Finity Consulting Pty Limited and any person subsequently appointed to be the Scheme Actuary. "Scheme Adjudicator" means Mark Moyes of 3 red Pty Ltd and any person subsequently appointed to be a Scheme Adjudicator. "Scheme Business" means all of a Scheme Company's Reinsurance Contracts. "Scheme Company" means NRG London or NRG Victory or both of them as the case requires. "Scheme Creditor" means, in relation to a particular Scheme Company, a person who is or claims to be a creditor of that Scheme Company in respect of a Claim. "Scheme Liability" means any Liability (not being an Excluded Liability) to which a Scheme Company is subject as at the Valuation Date in respect of a Reinsurance Contract. "Scheme Meetings" means each of the meetings of the Scheme Creditors for a Scheme Company to consider and vote on each Scheme. "Valuation Date" means the date as at which the Scheme Liabilities will be valued, namely 30 June 2006.