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Case 2:10-cv-09198-JVS-RNB Document 387 Filed 01/30/13 Page 1of4 Page ID
#:17277

Jonathan A. Shapiro (257199)

WILMER CUTLER PICKERING HALE AND DORR LLP

1950 Page Mill Road
| Palo Alto, California 93304

Tel: (650) 858-6101
Fax: (650) 858-6100
jonathan.shapiro@wilmerhale.com

Andrea J. Robinson (pro hac vice)
Timothy J. Perla (pro hac vice)

WILMER CUTLER PICKERING HALE AND DORR LLP

60 State Street

Boston, Massachusetts 02109
Tel: (617) 526-6000

Fax: (617) 526-5000
andrea.robinson@wilmerhale.com
timothy.perla@wilmerhale.com

Attorneys for Defendant Life Insurance
Company of the Southwest

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

SOUTHERN DIVISION

JOYCE WALKER, KIM BRUCE

HOWLETT, and MURIEL SPOONER, on

behalf of themselves and all others
similarly situated,

Plaintiffs,

VS.

LIFE INSURANCE COMPANY OF THE

SOUTHWEST, a Texas corporation, and
DOES 1-50

Defendant.

Case No.: CV 10-9198-JVS(RNBx)

DECLARATION OF ELIZABETH
MACGOWAN IN SUPPORT OF
DEFENDANT LIFE INSURANCE
COMPANY OF THE SOUTHWEST’S
OPPOSITION TO PLAINTIFES’
MOTION FOR LEAVE TO FILE
THIRD AMENDED COMPLAINT

Judge: Hon. James V. Selna
Date: March 4, 2013
Time: 1:30 P.M.

Courtroom: 10C

DECLARATION OF ELIZABETH MACGOWAN, 10-09198-JVS(RNBx)

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Case 2:10-cv-09198-JVS-RNB Document 387 Filed 01/30/13 Page 2of4 Page ID
#:17278

I, Elizabeth MacGowan, declare as follows:

1. I am Vice President and Chief Life Product Officer at National Life. In that
position, one of my responsibilities is overseeing the team responsible for pricing and
implementing life insurance products for National Life and Life Insurance Company of
the Southwest (“LSW”), including LSW’s SecurePlus Provider (“Provider”) and
SecurePlus Paragon (“Paragon”) policies.

2 I have personal knowledge of the facts stated herein and, if called as a
witness, I could and would testify competently thereto.

3, I currently bear responsibility for overseeing the pricing of the products and
determining the rates at which LSW will credit interest and the level of the rates charged.

4, LSW intends to provide the Account Value Enhancement starting in year ten
and the reduced Monthly Administrative Charge starting after year ten, as provided on
Provider illustrations. LS W also intends to provide the reduced Monthly Administrative
Charge and reduced Percent of Accumulated Value Charge reflected on Paragon
illustrations when Paragon policies reach their tenth anniversary.

S. National Life has issued several life insurance policies that, although quite
different from Paragon and Provider, do include non-guaranteed elements that will accrue
after a policy has been in force for a period of years. In every instance, when the period
of years has run, National Life has provided every non-guaranteed element. These
products include:

e Navitrak, a universal life insurance product. Navitrak was illustrated
to provide a non-guaranteed Account Value bonus of 0.50%
beginning after policy year ten, and to reduce (on a non-guaranteed
basis) the spread on preferred loans from 1.3% to 0% at the same
time. These non-guaranteed elements have been implemented for

policies that have been in force for at least ten years.

fe
DECLARATION OF ELIZABETH MACGOWAN, 10-CV-09198-JVS (RNBx)

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Case 2:10-cv-09198-JVS-RNB Document 387 Filed 01/30/13 Page 3of4 PageID.
#:17279

Varitrak, a variable universal life insurance product. Varitrak was
illustrated to provide a non-guaranteed Account Value bonus of
0.50% beginning after policy year ten, and to reduce (on a non-
guaranteed basis) the spread on preferred loans from 1.3% to 0.8% at
the same time. These non-guaranteed elements have been
implemented for policies that have been in force for at least ten years.
Sentinel Estate Provider, a survivorship variable universal life
insurance product. Sentinel Estate Provider was illustrated to reduce
the policy fee from $15 per month to $7.50 per month on a non-
guaranteed basis beginning after the tenth policy year. In addition,
Sentinel Estate Provider was illustrated to show a charge of $1,000
per death benefit reduced to $0 on a non-guaranteed basis after policy
year ten. Finally, Sentinel Estate Provider was illustrated to reduce
(on a non-guaranteed basis) the spread on preferred loans from 2.00%
to 0.25% beginning in policy year ten. These non-guaranteed
elements have been implemented for policies that have been in force
for at least ten years.

NL Estate Provider, a survivorship universal life insurance product.
NL Estate Provider was illustrated to reduce (on a non-guaranteed
basis) the spread on preferred loans by 0.50 % after policy year ten.
In addition, NL Estate Provider was illustrated to provide a non-
guaranteed interest bonus of 0.50 %, beginning after policy year ten.

These non-guaranteed elements have been implemented for policies

that have been in force for at least ten years.

-2-

DECLARATION OF ELIZABETH MACGOWAN, 10-CV-09198-JVS (RNBx)

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Case 2:10-cv-09198-JVS-RNB Document 387 Filed 01/30/13 Page4of4 Page ID
#:17280

I declare under the penalty of perjury that the foregoing is true and correct.

Executed this 24 day of January, 2013 at Montpelier, Vermont.

By: bbe ten

Elizabeth MacGowan

soa
DECLARATION OF ELIZABETH MACGOWAN, 10-CV-09198-JVS (RNBx)