Highlights of 2007 with respect to life insurance were as follows:

• New Life Insurance Regulation went into effect on 05 November 2007.

• The following have been regulated with respect to critical illness coverage:

- Critical illness coverage may be provided by companies licensed in life branch but not licensed in health branch only on prepaid (accelerated) basis.

- It may be provided by companies holding licenses in life as well as health branch on prepaid basis, solo or as additional coverage to life.

- It may be provided by pension companies only on prepaid (accelerated) basis since they are not allowed to hold a license in health branch as per the Private Pension Law.

20 life insurance and pension companies were active in the life branch during 2007 out of which 10 are pension companies which also operate in the private pension sector. Upon merger of two pension companies during the year, the number of pension companies operating in the Private Pension Sector went down to 9. In addition to these companies, 4 insurance companies operating in non-life branches sustained their life portfolios from the
previous years.

Although the industry's premium production in life branch as at 31 December 2007 is not yet available, it is estimated that there will be a 1.9% rise year-on in premium generation that will bring it up to TRY 1,410 million.

Because the Private Pension System increasingly replaced saving policies, the weight of new saving policies in the portfolio became insignificant. Once again bank credit life insurance has driven new premium production in the life branch, as it did last year.

In 2007, Milli Re's premium income from life branch increased by 9% year-on, and reached TRY 17,461,553. The company's gross loss ratio was 26% in 2007, as opposed to 42% in 2006. Consequently, life insurance retained account yielded a technical profit of TRY 3,511,180.

In 2007, Milli Re's premium income from Life branch increased 9% year-on, and reached TRY 17,461,553.