Choice

Contents

1. A proud pedigree
2. Choice partnership
3. Why choice?
4. Choice opportunities
5. Freedom and flexibility
6. Choice features
7. Choice administration
8. The offshore advantage
9. Important notes

A Proud Pedigree

Scottish Provident International operates from the Isle of Man. Since it was established in 1991, the company has enjoyed a period of strong growth, with funds under management in excess of £1 billion*.

Scottish Provident International is a wholly owned subsidiary of Abbey National plc, one of the largest UK banking groups by market capitalisation. whilst the Abbey National Group serves sow 15 million customers in the UK and overseas.

Scottish Provident International is committed to providing both individual and corporate clients with an innovative range of investment savings, retirement and protection solutions. Success has been built upon a continued commitment to investment excellence, innovative product design and providing clients and their advisers with the highest quality service.

By selecting Choice, you will harness that pedigree to benefit your investment.

*Funds under management as at 1st January 2001.

Choice partnership

Expectations
Whatever you look for in life - new experiences, tranquillity, time to do the things you promised yourself you would do, spending more time with your family - Choice is designed to help.

All of them demand the confidence and clarity which come with financial security. Choice will help you as you anticipate your future financial requirements. Knowing that your assets have the opportunity to grow gives you a sound foundation for concentrating on the more important things in life, allowing you to focus on the future.

Confidence
For all of us, confidence comes from being in control. How we choose to achieve this may vary, but the aim is the same. To be in control, we must have the choice and flexibility to adapt over time. This applies as much to investments as to anything else in life. You may want to be personally involved with your portfolio. You may wish your professional investment adviser to handle investment decisions. Whichever way - the choice is yours.

Choice is a life assurance policy, which may offer tax efficiency. It is flexible and offers access to a wide variety of asset classes.

Why choice?

Clarity
Investment opportunity abounds. Choice provides access to those opportunities. The key to taking advantage of it lies in clarity - the clarity of having a wide variety of investments in one place regardless of your investment objective. Your objectives may well change over time - Choice can accommodate the changes you want.

To keep you up to date with the performance of your assets, you will receive quarterly statements of your portfolio.

Investment Choice

You can include almost any combination of global investments in Choice:

• Scottish Provident International's own investment funds
• UK authorised unit trusts
• UK investment trusts
• Open ended investment companies (OEICs)
• Non UK collective investment schemes constituted as a company or unit trust and authorised under the law of its country of residence
• Cash deposits made available by Scottish Provident International
• Shares
• Bonds

Choice opportunities

Tailored
The continued accumulation of wealth demands that you take advantage of the opportunities that surround you. Your investments must work hard. Modern investment portfolios will be highly diversified and will hold a variety of assets from cash right through to individual stock holdings. By selecting Choice you build in the flexibility to switch* the balance of your portfolio over time, both in terms of risk profile and desired investment return. This means that you can build in your aspirations - with your desired balance of protection, income generation, capital growth and opportunistic speculation.

As an international investor, you expect to be able to take advantage of global investment opportunities. The pace of change in all markets means that you will be unlikely to anticipate today which investments will be of most appeal to you at different points in the future. Choice brings with it the qualities of a good bespoke service - strong foundations providing adaptability and longevity.

* Charge for switching investments within Choice are set out in the facts.

Freedom and flexibility

Investment Expertise
Accessing the best equity and bond opportunities and the best fund managers globally demands vision and flexibility. A key feature offered through Choice is to access highly diversified, professionally managed funds, alongside direct share and bond holdings, and cash.

Should you choose to appoint a professional investment manager to advise you on your investment decisions, you will find that as your adviser concentrates on the extensive opportunities open to you, Scottish Provident International will concentrate on the administration of your portfolio. You can give attention to other things in life should you choose.

An example of how choice can be adapted to suit your changing lifestyle. Your investment is likely to comprise a differing mix of asset classes, both collective and direct, as your investment objective and risk profile alters over time.

Choice features

Preferred Currency
We understand that as an international investor, you may wish to select assets denominated in certain currencies, possibly for reasons to do with personal circumstances or the global economy.

Choice may be denominated in Sterling, US Dollars, Japanese Yen, Euro or Hong Kong Dollars. Your valuation will be in that choice of currency. Investments can be made or transferred into Choice in any freely available currency. We will take care of all currency transactions and report all investment deals.

Use our Share Transfer Scheme if you wish to invest the value of existing holdings of funds, stocks and shares into your investment. We can look after all the paperwork, offering an alternative to you selling the shares direct.

Additional Investments may be made at any time, either in the currency of your choice or by use of the Share Exchange Scheme.

Withdrawals
Designed to perform optimally over the medium to long term, there are no time constraints on the length of time you may hold Choice. You can access your capital at any time, either in whole or in part. During the period of investment money may be required for special occasions. You have the comfort of knowing you can easily access your investment Withdrawals from Choice, either as a regular amount or as a lump sum can be arranged at any time. Regular payments can start and stop whenever you wish and they may be taken as a fixed amount or as a percentage of the value of your investments. Withdrawals can he paid by cheque or directly into a bank account You can opt for further flexibility - the frequency of payment can be either monthly, quarterly, yearly or half yearly. Withdrawals in the early years of Choice may incur penalties. Full details are included in 'Choice - the fad enclosed.

Additional Life Assurance Cover can be added to your policy at any time and, should your needs change, it may be adjusted. Normally the benefit paid on death is 101% of the encashment value of your Choice. Details are provided in 'Choice - the facts'.

Scottish Provident International's Choice may be used in a way which can assist in Estate Planning. This may help meet the diverse needs of investors who wish to preserve the value of their investment, perhaps for future generations. You may wish to consult your tax adviser about the most appropriate way to use this sort of application in conjunction with Choice. More details on these additional features can be found enclosed with this brochure in 'Choice - the facts.'

Choice administration

Partnership - Scottish Provident International Administration
Taking advantage of all the opportunities on offer means the administration of your portfolio of investments must be as simple as possible. To ensure that our service meets your expectations, we have created dedicated administration team to support Choice. Highly personalised investments demand the skills and knowledge of an administration team adaptable enough to understand your high quality service expectations.

This team handles all aspects of investment administration from set-up, through day-to-day running until you choose to encash Choice. As your investments in Choice develop over time, the team will handle all aspects of sale and purchase transactions on your instructions or those of your appointed investment adviser.

You will also receive quarterly valuations to keep you up to date with the performance of Choice.

The team's focus on your portfolio means that they have the knowledge to understand your service expectations.

Choice Expenses
The cost of Choice reflects the breadth of investment opportunities afforded by this flexible portfolio wrapper. A choice of charging structures enables you to choose the most appropriate to your circumstances.

A combination of an Establishment Fee, and ongoing Administration Fees are levied, along with variable Dealing and Settlement charges depending on the type and level of trading activity on your investment.

The offshore advantage

Constancy and Reliability
Scottish Provident International operates globally from the Isle of Man. In selecting Choice, you will benefit from the strengths of the Isle of Man as an offshore financial centre, in terms of both stability and security.

The Isle of Man is well established as an international centre with a solid reputation for security and political stability. Strict supervision of the activities of insurance companies is exercised by the Isle of Man government and comprehensive compensation arrangements are in place to further safeguard the interests of international investors. Investors throughout the world receive protection through the Isle of Man life Assurance (Compensation of Policyholders) Regulations 1991.

Scottish Provident International fully subscribes to anti-money laundering laws and directives.

Tax Efficient Growth
Within the Isle of Man Choice is not liable to tax on income or gains either on the individual assets held or on any changes for the overall value of the investment. Therefore, apart from any withholding tax deducted at source on income from assets held in some countries, your investment effectively grows tax-free.

The interest dividend income and realised gain on disposal of investments are currently exempted from Hong Kong profits tax under the Inland Revenue Ordinance.

Choice is a life assurance contract which bestows valuable security and tax advantages to some investors. The tax treatment of any benefits you take from Choice will depend on your country of residence or domicile and personal circumstances at the time. For example UK resident policyholders will have a possible income tax liability on a chargeable event (such as a surrender or a withdrawal exceeding 5% p.a. or where the policy is classed as a personal portfolio bond) which is reportable through Self Assessment. You should be aware that when you create a chargeable event Scottish Provident International is required to provide details of the chargeable event to the Inland Revenue if the value of the gain is in excess of half the basic rate threshold.

Choice is a Personal Portfolio Bond, as defined within the Personal Portfolio Bond (Tax) Regulations 1999, therefore an annual liability to income tax will arise for UK resident policyholders, based on a deemed gain of 15% of the compound value of Choice, regardless of the rate of return actually achieved. If a policyholder becomes resident in the UK the asset selection of Choice will be restricted so that it is no longer defined as a personal portfolio bond.

If you become a US taxpayer, you should be aware that Choice does not qualify as a life insurance or an annuity contract for US tax purposes. As a result increases in the cash value would be subject to current federal income taxation and death benefit proceeds would not be excludable from the recipient's income. You are strongly advised to consult your professional financial adviser to discuss your own taxation position, as Scottish Provident International is not permitted to give individual tax advice.

Important Notes

Choice is available exclusively in association with independent financial advisers. Scottish Provident International is not permitted to provide individual advice.

Scottish Provident International is supervised by the Isle of Man Insurance and Pensions Authority. Scottish Provident International investors receive the protection of the Isle of Man life Assurance (Compensation to Policyholders) Regulations 1991. The company reserves the right to adjust the returns from the investments to cater for any levy or charge made on the company under these regulations or similar legislation.

Holders of policies issued by the Scottish Provident International will not be protected by the UK Policyholders Protection Act 1975 if the company should be unable to meet its liabilities to them.

It is important to know that unit prices reflect the value of the underlying assets of the funds and so can go down as well as up. Past performance is not necessarily a guide to future performance. Where a fund invests in overseas securities, the unit prices may also rise and fall purely on account of exchange rate fluctuations.

Choice is not available in certain jurisdictions, such as South Africa, and the United States and its territories*. Nor is Choice being offered to citizens or residents of the US or its territories*. If you become resident or a citizen in some jurisdictions some aspects of your policy may have to be curtailed or modified to maintain compliance with local regulations. For example, if you purchase Choice and later become resident in the United States or its territories*, there will be restrictions placed on your policy while you are resident there. These include the inability to switch the assets of the investment funds placed with the Company, as otherwise permitted under the policy, and the inability to make additional investments.

United States territories refers to Puerto Rico, US Virgin Islands, Northern Mariana Islands, Guam, American Samoa, Wake island and the Trust Territory (a group of islands in the South Pacific including the Marshall Islands).

The information contained in this brochure is based on the company's understanding of the Isle of Man legislation, UK Revenue law and practice, US tax and securities laws and regulations and Code on Investment linked Assurance Schemes issued by the Securities and Futures Commission in Hong Kong as at May 2001. While every care has been taken, the Company cannot accept responsibility for its interpretation or any subsequent changes.