10-K

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                                                 UNITED STATES
                                       SECURITIES AND EXCHANGE COMMISSION
                                             Washington, D.C. 20549

                                                   FORM 10-K

                                                   (Mark one)
                 ( X )      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                            SECURITIES EXCHANGE ACT OF 1934

                                  For the fiscal year ended December 31, 2004

                                                       OR

                 (   )      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                            SECURITIES EXCHANGE ACT OF 1934

                              For the transition period from ________ to ________

                                        Commission file number 001-16517

                                          THE PHOENIX COMPANIES, INC.
                             (Exact name of registrant as specified in its charter)

                         Delaware                                                 06-1599088
              (State or other jurisdiction of                        (I.R.S. Employer Identification No.)
              incorporation or organization)

             One American Row, Hartford, Connecticut                              06102-5056
             (Address of principal executive offices)                             (Zip Code)

                               Registrant's telephone number, including area code
                                                 (860) 403-5000

Securities registered pursuant to section 12(b) of the Act:

                             Title of each class                 Name of each exchange on which registered
                        Common stock, $.01 par value                       New York Stock Exchange
                 7.45% Quarterly Interest Bonds, due 2032                  New York Stock Exchange
                             7.25% Equity Units                            New York Stock Exchange

Securities registered pursuant to Section 12(G) of the Act:
                                            Stock Purchase Contracts

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past ninety days.  YES X  NO ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form
10-K. [X]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
YES X NO ___

As of June 30, 2004, the aggregate market value of voting common equity held by non-affiliates of the
registrant was approximately $1.2 billion based on the last reported sale price of $12.25 per share of the
common stock on the New York Stock Exchange on that date. On February 28, 2005, the registrant had 94,942,332
shares of common stock outstanding; it had no non-voting common equity.

                                      DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement to be filed pursuant to Regulation 14A within 120 days
after the end of the registrant's fiscal year are incorporated by reference in Part III.

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                                                       1

                                               TABLE OF CONTENTS

               Item No.   Description                                                                       Page 

Part I            1       Business........................................................................    3

                  2       Properties......................................................................   17

                  3       Legal Proceedings...............................................................   17

                  4       Submission of Matters to a Vote of Security Holders.............................   18

Part II           5       Market for Registrant's Common Equity, Related Stockholder Matters and
                            Issuer Purchases of Equity Securities.........................................   19

                  6       Selected Financial Data.........................................................   20

                  7       Management's Discussion and Analysis of Financial Condition and
                            Results of Operations.........................................................   23

                  7A      Quantitative and Qualitative Disclosures About Market Risk......................   86

                  8       Financial Statements and Supplementary Data.....................................   86

                          Report of Independent Registered Public Accounting Firm.........................  F-1

                          Consolidated Balance Sheet as of December 31, 2004 and 2003.....................  F-3

                          Consolidated Statement of Income and Comprehensive Income For the Years
                            Ended December 31, 2004, 2003 and 2002........................................  F-4

                          Consolidated Statement of Cash Flows For the Years Ended
                            December 31, 2004, 2003 and 2002..............................................  F-5

                          Consolidated Statement of Changes in Stockholders' Equity and Comprehensive
                            Income For the Years Ended December 31, 2004, 2003 and 2002...................  F-6

                          Notes to Consolidated Financial Statements......................................  F-7

                  9       Changes in and Disagreements with Accountants on Accounting and
                            Financial Disclosure..........................................................   86

                  9A      Controls and Procedures.........................................................   86

                  9B      Other Information...............................................................   87

Part III          10      Directors and Executive Officers of the Registrant..............................   87

                  11      Executive Compensation..........................................................   88

                  12      Security Ownership of Certain Beneficial Owners and Management..................   89

                  13      Certain Relationships and Related Transactions..................................   91

                  14      Principal Accountant Fees and Services..........................................   91

Part IV           15      Exhibits and Financial Statement Schedules......................................   92

Signatures................................................................................................   93

Exhibit Index.............................................................................................  E-1



                                                       2


Unless otherwise stated, at all times on and after June 25, 2001, the effective date of Phoenix Home Life
Mutual Insurance Company's demutualization, "Phoenix," "we," "our" or "us" means The Phoenix Companies, Inc.
(the "Company" or "PNX") and its direct and indirect subsidiaries. At all times prior to June 25, 2001, "we,"
"our" or "us" means Phoenix Home Life Mutual Insurance Company (which has been known as Phoenix Life Insurance
Company since June 25, 2001) and its direct and indirect subsidiaries. Furthermore, "Phoenix Life" refers to
Phoenix Life Insurance Company, "Life Companies" refers to Phoenix Life and its direct and indirect
subsidiaries and "Phoenix Investment Partners" refers to Phoenix Investment Partners, Ltd. and its direct and
indirect subsidiaries.


                                                     PART I

Item 1.    Business

                                            Description of Business

We are a manufacturer of insurance, annuity and asset management products for the accumulation, preservation
and transfer of wealth. We provide products and services to affluent and high-net-worth individuals through
their advisors and to institutions directly and through consultants. We offer a broad range of life insurance,
annuity and asset management products and services through a variety of distributors.

The affluent and high-net-worth market is a growing market with significant demand for customized products and
services. We define affluent as those households with a net worth of $500,000 or greater, excluding their
primary residence. We define high-net-worth, a subset of the affluent category, as those households that have
net worth, excluding primary residence, of over $1,000,000. Our wealth management products and services are
designed to assist advisors and their clients in this target market to achieve three main goals:

   •    the accumulation of wealth, primarily during an individual's working years;

   •    the preservation of income and wealth during retirement and following death; and

   •    the efficient transfer of wealth in a variety of situations, including through estate planning,
        business continuation planning and charitable giving.

We distribute our wealth management products and services through various financial intermediaries such as
national and regional broker-dealers, banks, financial planning firms, advisor groups and other insurance
companies.

Segments

We have two operating segments, Life and Annuity and Asset Management, which include three product lines: life
insurance, annuities and asset management. Both segments serve the affluent and high-net-worth market, which
presents opportunities to leverage our capabilities and relationships.

We report our remaining results in two non-operating segments — Venture Capital and Corporate and Other.
Venture Capital includes: limited partnership interests in venture capital funds; leveraged buyout funds; and
other private equity partnerships sponsored and managed by third parties. The segment does not include similar
investments that are part of the closed block. Corporate and Other includes: indebtedness; unallocated assets,
liabilities and expenses; and certain businesses not of sufficient scale to report independently. These
segments are significant for financial reporting purposes, but do not contain products or services relevant to
our core manufacturing operations.

                                                       3


         Operating Segments

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                                         SUMMARY OF OPERATING SEGMENTS
                                               December 31, 2004
===============================================================================================================
Market Presence                    Distribution Channels                    Products
===============================================================================================================
Life and Annuity
- ---------------------------------------------------------------------------------------------------------------

• $48.1 billion of net life        • National and regional broker-dealers   • Variable universal life insurance
  insurance in force               • Financial planning firms               • Universal life insurance
• $7.6 billion of annuity assets   • Advisor groups                         • Term life insurance
  under management                 • Insurance companies                    • Variable annuities
                                   • Banks                                  • Immediate annuities
                                                                            • Private placement life
Principal operating subsidiaries:                                             insurance and annuities
• Phoenix Life
• PHL Variable Insurance Company

- ---------------------------------------------------------------------------------------------------------------
Asset Management
- ---------------------------------------------------------------------------------------------------------------
                                                                            Private client products:
• $42.9 billion of third-party     • National and regional broker-dealers   • Managed accounts
  assets under management          • Institutional asset management         • Mutual funds
                                     consultants                            • Closed-end funds
Principal operating subsidiary:    • Financial planning firms               Institutional products:
• Phoenix Investment Partners      • Affiliated asset managers              • Institutional accounts
                                                                            • Structured products
                                                                            • Phoenix Life general and
                                                                              separate accounts

Life and Annuity Segment

Our Life and Annuity segment offers a variety of life insurance and annuity products through non-affiliated
distributors. We believe our competitive advantage in this segment consists of six main components:

  • our innovative products;
  • our broad asset management capability;
  • our distribution relationships with institutions that have access to our target market;
  • the value-added our distributors provide those institutions;
  • our ability to combine products and services that distributors and their clients find attractive; and
  • our underwriting expertise.

Life and Annuity Products

         Life Products
Our life insurance products include variable universal life, universal life, term life and other insurance
products. We offer single life, first-to-die and second-to-die products. Under first-to-die policies, up to
five lives may be insured with the policy proceeds paid after the death of the first of the five insured lives.
Second-to-die products are typically used for estate planning purposes and insure two lives rather than one,
with the policy proceeds paid after the death of both insured individuals.

Variable Universal Life. Variable universal life products provide insurance coverage and give the policyholder
various investment choices, flexible premium payments and coverage amounts and limited guarantees. The
policyholder may direct premiums and cash value into a variety of separate investment accounts, accounts that
are maintained separately from the other assets of the Life Companies and are not part of the general accounts
of the Life Companies, or into the general account. In separate investment accounts, the policyholder bears the
entire

                                                       4


risk of the investment results. We collect fees for the management of these various investment accounts and the
net return is credited directly to the policyholder's accounts. With some variable universal products, by
maintaining a certain premium level the policyholder receives guarantees that protect the policy's death
benefit if, due to adverse investment experience, the policyholder's account balance is zero. We retain the
right within limits to adjust the fees we assess for providing administrative services. We also collect fees to
cover mortality costs; these fees may be adjusted by us but may not exceed contractual limits.

Universal Life. Universal life products provide insurance coverage on the same basis as variable universal life
products, except that premiums, and the resulting accumulated balances, are allocated only to our general
account for investment. Universal life products may allow the policyholder to increase or decrease the amount
of death benefit coverage over the term of the policy, and also may allow the policyholder to adjust the
frequency and amount of premium payments. Some universal life products provide guarantees that protect the
policy's death benefit if specified minimum premiums are paid. We credit premiums, net of expenses, to an
account maintained for the policyholder. We credit interest to the account at rates that we determine, subject
to certain minimums. Specific charges are made against the account for expenses. We also collect fees to cover
mortality costs; these fees may be adjusted by us but may not exceed contractual limits.

Term Life. Term life insurance provides a guaranteed benefit upon the death of the insured within a specified
time period, in return for the periodic payment of premiums. Specified coverage periods range from one to 30
years, but not longer than the period over which premiums are paid. Premiums may be level for the coverage
period or may vary. Term insurance products are sometimes referred to as pure protection products, in that
there are normally no savings or investment elements. Term contracts expire without value at the end of the
coverage period. Our term insurance policies allow policyholders to convert to permanent coverage, generally
without evidence of insurability.

         Annuity Products
We offer a variety of variable annuities to meet the accumulation and preservation needs of the affluent and
high-net-worth market. Deferred annuities, in which funds accumulate for a number of years before periodic
payments begin, enable the contractholder to save for retirement and also provide options that protect against
outliving assets during retirement. Immediate annuities are purchased by means of a single lump sum payment and
begin paying periodic income immediately. We believe this product is especially attractive to those affluent
and high-net-worth retirees who are rolling over pension or retirement plan assets and seek an income stream
based entirely or partly on equity market performance.

Variable annuities are separate account products, which means that the contractholder bears the investment risk
as deposits are directed into a variety of separate investment accounts. The contractholder typically can also
direct funds to a general account option in which case we credit interest at rates we determine, subject to
certain minimums. Contractholders also may elect certain enhanced living benefit guarantees, for which they are
assessed a specific charge. For example, in the fourth quarter of 2004 we introduced a Guaranteed Minimum
Accumulation Benefit option to our products which guarantees an account value of at least 105% of premium after
10 years assuming other contractual obligations are met. Our major sources of revenues from annuities are
mortality and expense fees charged to the contractholder, generally determined as a percentage of the market
value of any underlying separate account balances, and the excess of investment income over credited interest
for funds invested in our general account.

         Other Products and Services
Life and Annuity is focused on the development of other products and distribution relationships that respond to
the affluent and high-net-worth market's demand for wealth management solutions.

For example, many of our products are designed to be used by corporations to fund special deferred compensation
plans and benefit programs for key employees, commonly referred to as executive benefits. We view these
products as a source of growing fee-based business. In addition, our products can be applied to a number of
situations to meet the sophisticated needs of business owners and individuals, including for charitable giving.

                                                       5


Private Placement Life and Annuity Products. Private placement products are individually customized life and
annuity offerings that include single premium life, second-to-die life and variable annuity products. These
products have minimum deposits of over $500,000, targeting the wealthiest segment of the high-net-worth market.
The average face amount of life insurance policies sold by Philadelphia Financial Group, our private placement
distributor, in 2004 was $15.6 million and the average annuity deposit was $0.8 million.

Underwriting

Insurance underwriting is the process of examining, accepting or rejecting insurance risks, and classifying
those accepted in order to charge appropriate premiums or mortality charges. Underwriting also involves
determining the amount and type of reinsurance appropriate for a particular type of risk.

We believe we have particular expertise in evaluating the underwriting risks relevant to our target market. We
believe this expertise enables us to make appropriate underwriting decisions, including, in some instances, the
issuance of policies on more competitive terms than other insurers would offer. Phoenix Life has a long
tradition of underwriting innovation. Beginning in 1955, we were among the first insurance companies to offer
reduced rates to women. We believe we were the first company to offer reduced rates to non-smokers across all
policy lines, beginning in 1967. Our underwriting team includes doctors and other medical staff to ensure,
among other things, that we are focused on current developments in medical technology.

Our underwriting standards for life insurance are intended to result in the issuance of policies that produce
mortality experience consistent with the assumptions used in product pricing. The overall profitability of our
life insurance business depends, to a large extent, on the degree to which our mortality experience compares to
our pricing assumptions. Our underwriting is based on our historical mortality experience, as well as on the
experience of the insurance industry and of the general population. We continually compare our underwriting
standards to those of the industry to assist in managing our mortality risk and to stay abreast of industry
trends.

Our life insurance underwriters evaluate policy applications on the basis of the information provided by the
applicant and others. We use a variety of methods to evaluate certain policy applications, such as those where
the size of the policy sought is particularly large, or where the applicant is an older individual, has a known
medical impairment or is engaged in a hazardous occupation or hobby. Consistent with industry practice, we
require medical examinations and other tests depending upon the age of the applicant and the size of the
proposed policy.

In the executive benefits market, we issue life policies covering multiple lives on a guaranteed issue basis,
within specified limits per life insured, whereby the amount of insurance issued per life on a guaranteed basis
is related to the total number of lives being covered and the particular need for which the product is being
purchased. Guaranteed issue underwriting applies to employees actively at work, and product pricing reflects
the additional guaranteed issue underwriting risk.

Reserves

We establish and report liabilities for future policy benefits on our consolidated balance sheet to reflect the
obligations under our insurance policies and contracts. Our liability for variable universal life insurance and
universal life insurance policies and contracts is equal to the cumulative account balances, plus additional
reserves we establish for policy riders. Cumulative account balances include deposits plus credited interest,
less expense and mortality charges and withdrawals. Reserves for future policy benefits for whole life policies
are calculated based on actuarial assumptions that include investment yields and mortality.


                                                       6

Reinsurance

While we have underwriting expertise and have experienced favorable mortality trends, we believe it is prudent
to spread the risks associated with our life insurance products through reinsurance. As is customary in the
life insurance industry, our reinsurance program is designed to protect us against adverse mortality experience
generally and to reduce the potential loss we might face from a death claim on any one life.

We cede risk to other insurers under various agreements that cover individual life insurance policies. The
amount of risk ceded depends on our evaluation of the specific risk and applicable retention limits. Under the
terms of our reinsurance agreements, the reinsurer agrees to reimburse us for the ceded amount in the event a
claim is incurred. However, we remain liable to our policyholders for ceded insurance if any reinsurer fails to
meet its obligations. Since we bear the risk of nonpayment by one or more of our reinsurers, we cede business
to well-capitalized, highly rated insurers. While our current retention limit on any one life is $10 million
($12 million on second-to-die cases), we may cede amounts below those limits on a case-by-case basis depending
on the characteristics of a particular risk. Typically our reinsurance contracts allow us to reassume ceded
risks after a specified period. This right is valuable where our mortality experience is sufficiently favorable
to make it financially advantageous for us to reassume the risk rather than continue paying reinsurance
premiums.

We reinsure 80% of the mortality risk on a block of policies acquired from Confederation Life Insurance
Company, or Confederation Life, in 1997. We entered into two separate reinsurance agreements in 1998 and 1999
to reinsure a substantial portion of our otherwise retained individual life insurance business. In addition, we
reinsure up to 90% of the mortality risk on some new issues. As of December 31, 2004, we had ceded $80.0
billion in face amount of reinsurance, representing 62.5% of our total face amount of $128.1 billion of life
insurance in force.

On January 1, 1996, we entered into a reinsurance arrangement that covers 100% of the excess death benefits and
related reserves for most variable annuity policies issued through December 31, 1999, including subsequent
deposits. We retain the guaranteed minimum death benefit risks on the remaining variable deferred annuities in
force that are not covered by this reinsurance arrangement.

The following table lists our five principal life reinsurers, together with the reinsurance recoverables on a
statutory basis as of December 31, 2004, the face amount of life insurance ceded as of December 31, 2004, and
the reinsurers' A.M. Best ratings.

                                                     Reinsurance        Face Amount of
                                                     Recoverable        Life Insurance         A.M. Best
Reinsurer                                              Balances              Ceded             Rating(1)
                                                  -------------------  ------------------  ------------------
RGA Reinsurance Company.........................    $  19.8 million      $  21.4 billion           A+
AEGON USA.......................................    $  15.2 million      $  12.8 billion           A+
Swiss Re Life & Health America, Inc.............    $  13.6 million      $  11.6 billion           A+
Employers Reassurance Corporation...............    $   6.2 million      $   8.0 billion           A-
XL Capital......................................    $   6.9 million      $   6.2 billion           A+

________
(1)A.M. Best ratings are as of December 31, 2004.

Life and Annuity Financial Information

See Management's Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K for
Life and Annuity segment financial information.

                                                       7

Asset Management Segment

We conduct activities in Asset Management with a focus on two customer groups — private client and
institutional. Through our private client group, we provide asset management services principally on a
discretionary basis, with products consisting of open-end mutual funds, closed-end funds and managed accounts.
Managed accounts include intermediary programs sponsored and distributed by non-affiliated broker-dealers, and
direct managed accounts which are sold and administered by us. These two types of managed accounts generally
require minimum investments of $100,000 and $1 million, respectively. Our private client business also provides
transfer agency, accounting and administrative services to most of our open-end mutual funds.

Through our institutional group, we provide discretionary and non-discretionary investment management services
primarily to corporations, multi-employer retirement funds and foundations, as well as to endowments and
special purpose funds. In addition, we manage alternative financial products such as structured finance
products. Structured finance products include collateralized obligations such as collateralized debt
obligations, or CDOs, backed by portfolios of public high yield bonds or commercial mortgage-backed or
asset-backed securities.

Affiliated Asset Managers

We offer investment management services through our affiliated asset managers. We provide our affiliated asset
managers with a consolidated platform of distribution support, thereby allowing each manager to devote a high
degree of focus to investment management activities. On an ongoing basis, we monitor the quality of the
affiliates' products by assessing their performance, style consistency and the discipline with which they apply
their investment process.




                                                       8

Our affiliated managers, and their respective styles, products and assets under management, are as follows:

- ---------------------------------------------------------------------------------------------------------------
                                                                                               Assets Under
                                                                                               Management at
    Affiliated Advisor/                                                                      December 31, 2004
    Ownership/Location                Investment Styles                  Products              (in billions)
- ---------------------------------------------------------------------------------------------------------------
GoodwinSM Capital Advisors(1),     Fixed Income –                  Mutual Funds
or Goodwin  / 100% /             Multi-Sector                    Institutional Accounts
Hartford, CT                                                     Structured Finance Products        $6.1
- ---------------------------------------------------------------------------------------------------------------
Seneca Capital Management        Equities –                      Mutual Funds
LLC, or Seneca / 68.4% /         Growth with Controlled Risk     Sponsored Managed Accounts
San Francisco, CA                Earnings-Driven Growth          Direct Managed Accounts
                                 Tax Sensitive Growth            Institutional Accounts
                                 Fixed Income –                  Structured Finance Products
                                 Value Driven                                                      $12.1
- ---------------------------------------------------------------------------------------------------------------
Kayne Anderson Rudnick           Equities –                      Sponsored Managed Accounts
Investment Management, LLC,      Quality at Reasonable Price     Direct Managed Accounts
or Kayne Anderson Rudnick /                                      Institutional Accounts
65.2% / Los Angeles, CA                                          Mutual Funds                      $10.4
- ---------------------------------------------------------------------------------------------------------------
Duff & Phelps Investment         Equities –                      Mutual Funds
Management Co., or DPIM /        REITs                           Sponsored Managed Accounts
100% / Chicago, IL               Large Cap Value                 Direct Managed Accounts
                                 Small Cap Core                  Institutional Accounts
                                 Fixed Income –                  Closed-end Funds
                                 Core                                                               $5.9
- ---------------------------------------------------------------------------------------------------------------
Engemann Asset Management,       Equities –                      Mutual Funds
INC.(1), or Engemann / 100% /     Classic Growth                  Sponsored Managed Accounts
Pasadena, CA                                                     Direct Managed Accounts
                                                                 Institutional Accounts             $3.8
- ---------------------------------------------------------------------------------------------------------------
OakhurstSM Asset Managers(1),      Equities –                      Mutual Funds
or Oakhurst / 100% /             Large Cap Value
Scotts Valley, CA                Large Cap Core                                                     $2.0
- ---------------------------------------------------------------------------------------------------------------
Walnut Asset Management LLC,     Equities –                      Direct Managed Accounts
or Walnut / 100% /               Relative Value                  Institutional Accounts
Philadelphia, PA                 Fixed Income –
                                 Quality Fixed Income                                               $0.8
- ---------------------------------------------------------------------------------------------------------------
Zweig Fund Group, or Zweig /     Equities/Fixed Income –         Mutual Funds
100% / New York, NY              Tactical Asset Allocation       Closed-end Funds
                                 Market Neutral
                                 Small Cap Value                                                    $1.3
- ---------------------------------------------------------------------------------------------------------------
Sub-advised Assets               Equities –                      Mutual Funds
                                 Mid-cap Value
                                 International                                                      $0.5
- ---------------------------------------------------------------------------------------------------------------
Total Third-Party Assets Under Management                                                          $42.9
- ---------------------------------------------------------------------------------------------------------------

(1) As of December 31, 2004, Goodwin and Oakhurst were divisions of Phoenix Investment Counsel, Inc., an
   indirect wholly-owned subsidiary of Phoenix Investment Partners. Effective January 1, 2005, Oakhurst became
   a division of Engemann.


                                                       9

Asset Management Products

         Private Client Products
Managed Accounts. We provide investment management services through participation in 52 intermediary managed
account programs sponsored by various broker-dealers such as Merrill Lynch, Morgan Stanley and Salomon Smith
Barney. These programs enable the sponsor's client to select one or more of Phoenix Investment Partners'
affiliated asset managers as the provider of discretionary portfolio management services, in return for an
asset-based fee paid by the client to the broker-dealer, which then pays a management fee to us. Seven of these
programs include more than one of our affiliated asset managers. As of December 31, 2004, we managed 43,667
accounts relating to such intermediary managed account programs, representing approximately $9.0 billion of
assets under management. In addition, we offer direct managed accounts, which are individual client accounts
sold and administered by us. As of December 31, 2004, we managed 3,127 direct managed accounts representing
$4.5 billion of assets under management.

Mutual Funds. Our affiliated asset managers are investment advisors or sub-advisors to 39 open-end mutual
funds, which had aggregate assets under management of $10.2 billion as of December 31, 2004. These mutual funds
are available primarily to retail investors. Of these funds, 14 are included as investment choices to
purchasers of our variable life and variable annuity products.

Closed-End Mutual Funds. We manage the assets of five closed-end funds, each of which is traded on the New York
Stock Exchange: DTF Tax-Free Income Inc.; Duff & Phelps Utility and Corporate Bond Trust Inc.; DNP Select
Income Inc.; The Zweig Fund, Inc. and The Zweig Total Return Fund, Inc. Our closed-end fund assets under
management totaled $4.3 billion as of December 31, 2004.

         Institutional Products
Institutional Accounts. We have over 1,000 institutional clients, consisting primarily of medium-sized pension
and profit sharing plans of corporations, government entities and unions, as well as endowments and
foundations, public and multi-employer retirement funds and other special purpose funds. Our institutional
assets under management totaled $12.0 billion as of December 31, 2004.

Structured Finance Products. We manage eight structured finance products. These products are collateralized
obligations backed by portfolios of high yield bonds, emerging markets bonds and/or asset-backed securities.
Our structured bond products assets under management totaled $2.9 billion as of December 31, 2004.

Life Companies' General Accounts. Goodwin, in conjunction with Phoenix Life's portfolio management group,
manages most of the assets of the Life Companies' general accounts. As of December 31, 2004, Phoenix Investment
Partners managed $13.2 billion of the Life Companies' assets. The assets under management, revenues and
expenses associated with the general accounts are not included in the Asset Management segment.

                                                      10


Asset Management Assets under Management

The following table presents information regarding the third-party assets under management by Phoenix
Investment Partners for the years indicated:

                                                                          As of December 31,
Assets Under Management                                    ------------------------------------------------
($ amounts in millions)                                         2004             2003            2002
                                                           ---------------  --------------- ---------------
TOTAL
Deposits................................................    $    6,669.8     $    6,987.8    $   10,246.8
Redemptions and withdrawals.............................       (13,255.8)        (8,148.6)       (9,575.6)
Acquisitions(1)  and dispositions........................            --               --           7,422.0
Performance.............................................         2,923.0          5,788.1        (7,863.1)
Other...................................................           311.0           (202.1)         (118.3)
                                                           ---------------  --------------- ---------------
Change in assets under management.......................        (3,352.0)         4,425.2           111.8
Beginning balance.......................................        46,260.5         41,835.3        41,723.5
                                                           ---------------  --------------- ---------------
Ending balance..........................................    $   42,908.5     $   46,260.5    $   41,835.3
                                                           ===============  =============== ===============
INSTITUTIONAL PRODUCTS
Deposits................................................    $    2,743.9     $    2,974.7    $    4,312.6
Redemptions and withdrawals.............................        (5,750.9)        (3,452.2)       (4,480.0)
Acquisitions and dispositions...........................            --               --           1,507.7
Performance.............................................           997.2          2,304.3        (2,178.9)
Other(2) ................................................            37.5            (19.9)       (1,294.6)
                                                           ---------------  --------------- ---------------
Change in assets under management.......................        (1,972.3)         1,806.9        (2,133.2)
Beginning balance.......................................        16,866.5         15,059.6        17,192.8
                                                           ---------------  --------------- ---------------
Ending balance..........................................    $   14,894.2     $   16,866.5    $   15,059.6
                                                           ===============  =============== ===============
PRIVATE CLIENT PRODUCTS
Mutual Funds
Deposits................................................    $    1,816.0     $    1,744.8    $    1,513.1
Redemptions and withdrawals.............................        (2,301.9)        (2,039.8)       (2,379.2)
Performance.............................................           975.5          1,946.3        (2,406.0)
Other...................................................           273.5           (182.2)         (153.7)
                                                           ---------------  --------------- ---------------
Change in assets under management.......................           763.1          1,469.1        (3,425.8)
Beginning balance.......................................        13,735.6         12,266.5        15,692.3
                                                           ---------------  --------------- ---------------
Ending balance..........................................    $   14,498.7     $   13,735.6    $   12,266.5
                                                           ===============  =============== ===============
INTERMEDIARY MANAGED ACCOUNT PROGRAMS
Deposits................................................    $    1,637.1     $    2,064.3    $    4,116.9
Redemptions and withdrawals.............................        (4,177.4)        (2,362.1)       (2,317.9)
Acquisitions(1) .........................................            --               --           4,723.4
Performance.............................................           844.7          1,590.2        (2,902.9)
                                                           ---------------  --------------- ---------------
Change in assets under management.......................        (1,695.6)         1,292.4         3,619.5
Beginning balance.......................................        10,731.5          9,439.1         5,819.6
                                                           ---------------  --------------- ---------------
Ending balance..........................................    $    9,035.9     $   10,731.5    $    9,439.1
                                                           ===============  =============== ===============
DIRECT MANAGED ACCOUNTS
Deposits................................................    $      472.8     $      204.0    $      304.2
Redemptions and withdrawals.............................        (1,025.6)          (294.5)         (398.5)
Acquisitions(1) .........................................            --               --           1,190.9
Performance.............................................           105.6            (52.7)         (375.3)
Other(2) ................................................            --               --           1,330.0
                                                           ---------------  --------------- ---------------
Change in assets under management.......................          (447.2)          (143.2)        2,051.3
Beginning balance.......................................         4,926.9          5,070.1         3,018.8
                                                           ---------------  --------------- ---------------
Ending balance..........................................    $    4,479.7     $    4,926.9    $    5,070.1
                                                           ===============  =============== ===============
________
(1)Includes assets of $7.8 billion from Kayne Anderson Rudnick in 2002.
(2)Includes reclassification of certain Seneca funds from institutional products to direct managed
of $1.3 billion.

                                                      11


Asset Management Financial Information

See Management's Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K for
Asset Management segment financial information.

Competition

We face significant competition from a wide variety of financial institutions, including insurance companies
and other asset management companies, as well as from proprietary products offered by our distribution sources
such as banks, broker-dealers and financial planning firms. Our competitors include larger and, in some cases,
more highly-rated insurance companies and other financial services companies. Many competitors offer similar
products, use similar distribution sources, offer less expensive products, have greater access to key
distribution channels and have greater resources than us.

Competition in our businesses is based on several factors including ratings, investment performance, access to
distribution channels, service to advisors and their clients, product features, fees charged and commissions
paid.

As we continue to focus on the development of our distribution channels, we increasingly must compete with
other providers of life insurance, annuity and private client products to attract and maintain relationships
with productive distributors that have the ability to sell our products. In particular, our ability to attract
distributors for our products could be adversely affected if for any reason our products became less
competitive or concerns arose about our asset quality, financial strength or ratings.

Distribution

We maintain a broad range of distribution relationships. We seek to build relationships with distributors who
are, or who have access to, advisors to the affluent and high-net-worth market. In May 2004, we disposed of our
affiliated retail distribution channel to focus our distribution efforts on our non-affiliated distribution
channels, in which we have a long history. We began to use non-affiliated distribution in 1954, primarily by
selling life insurance products through agents of other companies.

Our distribution strategy is to increase sales of profitable products by increasing the number of producers
selling Phoenix products within existing relationships, by offering a greater array of products through
existing distribution sources and by developing new relationships.

Since 2002, we have focused on increasing the number of producers selling Phoenix products within existing
relationships. In 2004, over 600 new producers wrote life insurance business with us, over 700 new producers
wrote annuity business with us and over 10,900 new producers placed asset management business with us.

Since late 1999, we have significantly strengthened our wholesaling teams, in order to enhance our
relationships with distributors in each of our product areas. As of December 31, 2004, we employed 63 life
insurance wholesalers, 19 annuity wholesalers and 13 asset management wholesalers, compared to 42, one and 25,
respectively, as of December 31, 1999.

We also engage in collaborative account development among our life insurance, annuity and asset management
wholesalers through joint marketing presentations and specialized services to advisors. We believe having many
of the same investment choices available in each of our product lines contributes to the success of our
strategy.

State Farm. In 2001, we entered into an agreement with a subsidiary of State Farm Mutual Automobile Insurance
Company, or State Farm, to provide our life and annuity products and related services to State Farm's affluent
and high-net-worth customers, through qualified State Farm agents. We are the only third-party provider of life
and annuity products and services at State Farm. By the end of 2004, we had trained and certified approximately
10,474, or 92%, of State Farm's approximately 11,437 securities licensed agents to sell Phoenix products. Our


                                                      12


relationship with State Farm gives us potential access to approximately 30% of the high-net-worth households in
the United States. For 2004, State Farm ranked first among our distributors in the sale of life insurance and
second in the sale of annuity products.

National and Regional Broker-Dealers. National and regional broker-dealers are brokerage firms that engage
financial advisors as employees rather than as independent contractors. To meet the evolving wealth management
needs of their customers, national and regional broker-dealers offer products from third-party providers such
as Phoenix. Simultaneously, many of these firms are seeking to reduce the number of relationships they have
with product providers in favor of those that offer a range of products together with services designed to
support advisors' sales efforts. We believe our ability to offer a variety of life insurance, annuity and asset
management products and services positions us to benefit from this trend. We have relationships across all
product lines in many important distribution outlets that target the high-net-worth market including UBS, A.G.
Edwards and Merrill Lynch.

Advisor Groups. The recent industry trend toward affiliations among small independent financial advisory firms
has led to advisor groups becoming a distinct class of distributors. We believe we have a particularly strong
position as a provider of life insurance products through Partners Marketing Group, Inc., or PartnersFinancial,
which, since 1999, has been an important component of the National Financial Partners, or NFP, organization.

Insurance Companies. Insurance companies have been moving their agents into an advisor/planner role, resulting
in a need to provide their agents, particularly their top producers, with a wider selection of life insurance
products to sell. Insurance companies responded to this need, in part, by negotiating arrangements with
third-party providers, including other insurance companies. We have distribution relationships with financial
services providers such as AXA Financial Inc., or AXA, and its brokerage outlet for internal producers, AXA
Network. In addition, we continue to maintain relationships with individual agents of other companies and
independent agents.

Financial Planning Firms. Financial planning firms are brokerage firms that engage financial advisors as
independent contractors rather than as employees. Financial planning firms have begun to expand their offerings
to include wealth preservation and transfer products. To capitalize on this trend, we establish relationships
with the financial planning firm, and then build relationships with the individual advisors within the firm.
This approach permits us to maximize the number of individual registered representatives who potentially may
sell our products.

Emerging Distribution Sources. Philadelphia Financial Group offers private placement life and annuity products
through a variety of distribution sources with access to the high-net-worth market including family offices,
financial institutions, accountants and attorneys. We also offer our life and annuity products through
non-traditional sources such as private banks, private banking groups within commercial banks and regional and
commercial banks that are focused on their high-net-worth client base.

         Affiliated Distribution

Effective as of May 31, 2004, Linsco/Private Ledger Financial Services, or LPL, purchased our affiliated retail
distribution operations and as a result, we no longer have affiliated distribution channels. As part of the
transaction, advisors affiliated with WS Griffith Securities, Inc., or Griffith, and Main Street Management
Company, or Main Street, had the opportunity to move to LPL as independent registered representatives. As of
December 31, 2004, LPL had successfully recruited about 45% of Griffith's representatives, representing
approximately 50% of Griffith's total 2003 gross dealer concessions. Since the sale, the Company has pursued an
expansion in its distribution relationship with LPL, adding life and annuity products to existing asset
management offerings and recently commenced a plan to market these products through LPL and its more than 5,500
producers.

                                                      13



During 2004, 2003 and 2002, 6%, 15% and 11%, respectively, of total life insurance sales, as measured by new
annualized and single premiums, were conducted through affiliated distribution sources. Annuity sales through
affiliated distribution accounted for 18%, 18% and 35% of gross annuity deposits, excluding discontinued
products, during 2004, 2003 and 2002, respectively. In all three years, asset management sales through
affiliate distribution accounted for 1% of sales.

         Institutional Products Distribution

We have an Institutional Marketing Group, or IMG, which markets our institutional product offerings to
consultants and other institutional clients. There are experienced institutional salespeople at several of our
affiliated asset managers, as well as specialists in products such as sub-advisory and defined contribution
investment only retirement services who operate across the enterprise. IMG also provides coordinated marketing
support and services.

We direct our institutional marketing efforts primarily toward consultants who are retained by institutional
investors to assist in competitive reviews of potential investment managers. These consultants recommend
investment managers to their institutional clients based on their review of investment managers' performance
histories and investment styles. We maintain relationships with these consultants and provide information and
materials to them in order to facilitate their review of our funds.

Support and Services

We believe we have a competitive advantage through the service and support we provide our distributors,
including:

    •   customized advice on estate planning, charitable giving planning, executive benefits and retirement
        planning, provided by a staff of professionals with specialized expertise in the advanced application
        of life insurance and variable annuity products. This staff includes three attorneys with an average of
        approximately 15 years' experience, who combine their advice with tailored presentations, educational
        materials and specimen legal documents;
    •   market research and education programs designed to help advisors better understand which financial
        products the affluent and high-net-worth market demands. We assist advisors in marketing to specific
        customer segments such as senior corporate executives, business owners and high-net-worth households;
    •   nationwide teams of life, annuity and asset management product specialists who provide education and
        sales support to distributors and who can act as part of the advisory team for case design and
        technical support;
    •   asset management and investment allocation strategies, including our Complementary Investment Analysis
        tool, which identifies investment options offered both by us and by third parties that are suitable for
        an individual's allocation needs;
    •   an underwriting team with significant experience in evaluating the financial and medical underwriting
        risks associated with high face-value policies and affluent and high-net-worth individuals; and
    •   internet-accessible information that makes it easier for our distributors to do business with us,
        including interactive product illustrations, educational and sales tools, and online access to forms,
        marketing materials and policyholder account information.

Non-operating Segments

Venture Capital Segment

We have invested in the venture capital markets for over 25 years through Phoenix Life's investment portfolio.
The Venture Capital segment represented 1% of total investments and cash and cash equivalents as of both
December 31, 2004 and 2003. The carrying value of partnership investments in the Venture Capital segment was


                                                      14


$202.9 million as of December 31, 2004. The segment does not include venture capital investments held within
Phoenix Life's closed block.

Phoenix Life's venture capital investments are limited partnership interests in venture capital funds,
leveraged buyout funds and other private equity partnerships sponsored and managed by third parties. We refer
to all of these types of investments as venture capital. We currently have 110 partnership investments through
49 sponsors in our Venture Capital segment. We believe our long-standing relationships and history of
consistent participation with many well-established venture capital sponsors gives us preferred access to
attractive venture capital opportunities.

Historically, we viewed our venture capital investments as an opportunity to enhance returns on our
participating life products. In the past, we allocated between 1% and 2% of Phoenix Life's annual investable
cash flow to venture capital investments. Since 2002, we have made new venture capital commitments only in our
closed block. In addition, in February 2003, we sold a 50% interest in certain of our venture capital
partnerships to an outside party and transferred the remaining 50% interest in those partnerships to our closed
block. The carrying value of the partnerships sold and transferred totaled $52.2 million after realizing a loss
of $19.4 million ($5.1 million recorded in 2002 and $14.3 million recorded in 2003).

See Management's Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K for
Venture Capital segment financial information.

Corporate and Other Segment

The Corporate and Other segment includes: indebtedness; unallocated assets; liabilities and expenses; and
certain businesses not of sufficient scale to report independently. Corporate and Other also includes certain
international operations. As of December 31, 2004, we had a total of $156.1 million in these international
holdings. Among our international holdings was Aberdeen Asset Management PLC, or Aberdeen, a Scottish
investment management company with institutional and retail clients in the United Kingdom, as well as in
continental Europe, Asia, Australia and the United States. At December 31, 2004, our ownership in Aberdeen
stock was 16.5%. On January 14, 2005 we closed the sale of our equity holdings in Aberdeen for net proceeds of
$70.4 million. See Management's Discussion and Analysis of Financial Condition and Results of Operations and
Note 5 to our consolidated financial statements in this Form 10-K for more information.

See Management's Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K for
Corporate and Other segment financial information.



                                                      15



                                        General Development of Business

PNX was incorporated in Delaware in 2000. Our principal executive offices are located at One American Row,
Hartford, Connecticut 06102-5056. Our telephone number is (860) 403-5000. Our website is located at
www.PhoenixWealthManagement.com. (This and all other URLs are intended to be inactive textual references only.
They are not intended to be an active hyperlink to our website. The information on our website is not, and is
not intended to be, part of this Form 10-K and is not incorporated into this report by reference.)

Phoenix Mutual Life Insurance Company was organized in Connecticut in 1851. In 1992, in connection with its
merger with Home Life Insurance Company, or Home Life, the company redomiciled to New York and changed its name
to Phoenix Home Life Mutual Insurance Company, or Phoenix Home Life.

On June 25, 2001, the effective date of its demutualization, Phoenix Home Life converted from a mutual life
insurance company to a stock life insurance company, became a wholly-owned subsidiary of PNX and changed its
name to Phoenix Life Insurance Company. All policyholder membership interests in the mutual company were
extinguished on the effective date. At the same time, Phoenix Investment Partners became an indirect
wholly-owned subsidiary of PNX.

In addition, on June 25, 2001, PNX completed its initial public offering, or IPO, in which 48.8 million shares
of common stock were issued at a price of $17.50 per share. Net proceeds from the IPO were $807.9 million,
which was contributed to Phoenix Life, as required under the plan of reorganization. On July 24, 2001, Morgan
Stanley & Co. Incorporated exercised its right to purchase 1,395,900 additional shares of the common stock of
PNX at the IPO price of $17.50 per share less underwriter's discount. Net proceeds of $23.2 million were
contributed to Phoenix Life. Our shares outstanding were subsequently reduced through share repurchases through
October 2002.

The following chart illustrates our corporate structure as of December 31, 2004.

                                         --------------------------------
                                            THE PHOENIX COMPANIES, INC.
                                         --------------------------------
                                                       |
                              |-----------------------------------------------------|
                             100%                                                 100%
                     -------------------                                ------------------------
                         PHOENIX LIFE                                       PHOENIX INVESTMENT
                          INSURANCE                                         MANAGEMENT COMPANY,
                           COMPANY                                                  INC.
                     -------------------                                ------------------------
                              |                                                     |
                             100%                                                 100%
                     -------------------                           ----------------------------------------
                      PM HOLDINGS, INC.                                PHOENIX INVESTMENT PARTNERS, LTD.
                     -------------------                           ----------------------------------------
                              |                                                     |
                         Various %s                                            Various %s
                              |                                                     |
           --------------------------------------------           -------------------------------------------
             OTHER DOMESTIC AND FOREIGN SUBSIDIARIES                OTHER DOMESTIC AND FOREIGN SUBSIDIARIES
           --------------------------------------------           -------------------------------------------

At December 31, 2004, we employed approximately 1,500 people. We believe our relations with our employees are
good.



                                                      16



Item 2.    Properties

Our executive headquarters consist of our main office building at One American Row and two other buildings in
Hartford, Connecticut. We own these buildings and occupy most of the space contained in them. In addition to
these properties, we own offices in East Greenbush, New York for use in the operation of our business. In
February 2005, we entered into an agreement for the sale and short-term leaseback of the East Greenbush
property with an anticipated relocation in 2006 of business functions currently located at that property to a
site to be leased in the Albany area. In May 2004, we sold our offices in Enfield, Connecticut. Business
functions from Enfield are being relocated to our existing Hartford offices. We also lease office space within
and out of the United States as needed for our operations.

Item 3.    Legal Proceedings

General

We are regularly involved in litigation, both as a defendant and as a plaintiff. The litigation naming us as a
defendant ordinarily involves our activities as an insurer, employer, investor or taxpayer. Several current
proceedings are discussed below. In additional, state regulatory bodies, the Securities and Exchange
Commission, or SEC, the National Association of Securities Dealers, Inc., or NASD, and other regulatory bodies
regularly make inquiries of us and, from time to time, conduct examinations or investigations concerning our
compliance with, among other things, insurance laws, securities laws, and laws governing the activities of
broker-dealers. For example, during 2003 and 2004, the New York State Insurance Department conducted its
routine quinquennial financial and market conduct examination of Phoenix Life and its New York domiciled life
insurance subsidiary and the SEC conducted examinations of certain Phoenix Life variable products and certain
Phoenix Life affiliated investment advisors and mutual funds. The New York State Insurance Department's report,
for the five-year period ending December 31, 2002, was recently received. It cited no material violations. In
2004, the NASD also commenced examination of Phoenix broker-dealers, which is ongoing. The NASD recently
notified the Company of apparent violations by one of our broker-dealer subsidiaries of certain trade reporting
requirement. The Company is developing its response. We continue to actively cooperate with these regulators.

Federal and state regulatory authorities from time to time make inquiries and conduct examinations regarding
compliance by Phoenix Life and its subsidiaries with securities and other laws and regulations affecting their
registered products. The Company endeavors to respond to such inquiries in an appropriate way and to take
corrective action if warranted. Recently, there has been a significant increase in federal and state regulatory
activity relating to financial services companies, with a number of recent regulatory inquiries focusing on
late-trading, market timing and valuation issues. Our products entitle us to impose restrictions on transfers
between separate account sub-accounts associated with our variable products.

The Boston District Office of the SEC recently completed a compliance examination of certain of the Company's
affiliates that are registered under the Investment Company Act of 1940 or the Investment Advisers Act of 1940.
Following the examination, the staff of the Boston District Office issued a deficient letter primarily focused
on perceived weaknesses in procedures for monitoring trading to prevent market timing activity. The staff
requested the Company to conduct an analysis as to whether shareholders, policyholders and contract holders who
invested in the funds that may have been affected by undetected market timing activity had suffered harm and to
advise the staff whether the Company believes reimbursement is necessary or appropriate under the
circumstances. A third party has been retained to assist the Company in preparing the analysis. Until this
analysis is completed, whether any of these affiliates of The Phoenix Companies, Inc. would be required to make
any reimbursement payments and if so the amount thereof cannot be determined.

                                                      17



A number of companies have recently announced settlements of enforcement actions with various regulatory
agencies, primarily the SEC and the New York Attorney General's Office. While no such action has been initiated
against us, it is possible that one or more regulatory agencies may pursue this type of action against us in
the future.

We recently received a subpoena from the Connecticut Attorney General's office requesting information regarding
certain distribution practices since 1998. Over 40 companies received such a subpoena. We are cooperating
fully.

These types of regulatory actions may be difficult to assess or quantify, may seek recovery of indeterminate
amounts, including punitive and treble damages, and the nature and magnitude of their outcomes may remain
unknown for substantial periods of time. While it is not feasible to predict or determine the ultimate outcome
of all pending investigations and legal proceedings or to provide reasonable ranges of potential losses, we
believe that their outcomes are not likely, either individually or in the aggregate, to have a material adverse
effect on our consolidated financial condition, or consideration of available insurance and reinsurance and the
provision made in our consolidated financial statements. However, given the large or indeterminate amounts
sought in certain of these matters and litigation's inherent unpredictability, it is possible that an adverse
outcome in certain matters could, from time to time, have a material adverse effect on our results of operation
or cash flows.

Discontinued Reinsurance Business

During 1999, our Life Companies placed their remaining group accident and health reinsurance business into
run-off, adopting a formal plan to terminate the related contracts as early as contractually permitted and not
entering into any new contracts. As part of the decision to discontinue these reinsurance operations, we
reviewed the run-off block and estimated the amount and timing of future net premiums, claims and expenses. We
also purchased aggregate excess-of-loss reinsurance to further protect us from unfavorable results from this
discontinued business. On February 7, 2005 we notified the aggregate excess-of-loss reinsurer that we were
exercising our option to commute this contract. The commutation will be effective during the second quarter of
2005. The effect of the commutation will not be material to our consolidated financial statements.

We have established reserves for claims and related expenses that we expect to pay on our discontinued group
accident and health reinsurance business. These reserves are based on currently known facts and estimates
about, among other things, the amount of insured losses and expenses that we believe we will pay, the period
over which they will be paid, the amount of reinsurance we believe we will collect under our aggregate
excess-of-loss reinsurance, the amounts we believe we will collect from our retrocessionaires and the likely
legal and administrative costs of winding down the business.

Our total reserves, including coverage available from our aggregate excess-of-loss reinsurance and reserves for
amounts recoverable from retrocessionaires, were $110.0 million and $185.0 million as of December 31, 2004 and
2003, respectively. Our total amounts recoverable from retrocessionaires related to paid losses were $60.0
million and $165.0 million as of December 31, 2004 and 2003, respectively. We did not recognize any gains or
losses during the years 2004, 2003 and 2002.

See the Risks Related to Our Business section of Management's Discussion and Analysis as well as Note 17 to our
consolidated financial statements in this Form 10-K for additional information.

Item 4.    Submission of Matters to a Vote of Security Holders

No matter was submitted to a vote of our security holders during the fourth quarter of the fiscal year covered
by this report.


                                                      18


                                                    PART II

ITEM 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of
           Equity Securities

Market

Shares of our common stock trade on the New York Stock Exchange under the ticker symbol "PNX". As of February
14, 2005, there were approximately 270,000 registered holders of our common stock.

Unregistered Shares

We issued the following shares of common stock to eligible policyholders of Phoenix Life, effective as of June
25, 2001, in connection with Phoenix Life's demutualization on that date: 56,174,373 shares in 2001; 4,237
shares in 2002; 1,853 shares in 2003; and 54 shares in 2004. We issued these shares to policyholders in
exchange for their membership interests without registration under the Securities Act of 1933 in reliance on
the exemption under Section 3(a)(10) of the Securities Act of 1933.

In 2004, we also issued 43,334 restricted stock units, or RSUs, to 11 of our independent directors, without
registration under that act in reliance on the exemption under Regulation D for accredited investors. Each RSU
is potentially convertible into one share of our common stock.

Stock Price

The following table presents the intraday high and low prices for our common stock on the New York Stock
Exchange for the years 2004 and 2003. The closing price of our common stock at December 31, 2004 was $12.50.

                                                            2004                           2003
                                               -----------------------------  -----------------------------
                                                    High           Low             High           Low
                                               -------------- --------------  -------------- --------------

First Quarter................................   $     14.53    $     12.06     $      9.25    $      6.03
Second Quarter...............................   $     14.21    $     11.08     $      9.80    $      6.95
Third Quarter................................   $     12.34    $      9.51     $     12.10    $      8.60
Fourth Quarter...............................   $     12.60    $      9.47     $     12.65    $     10.26

Dividends

In 2004 and 2003, we paid a dividend of $0.16 per share to shareholders of record on June 14, 2004 and June 13,
2003, respectively. For a discussion of restrictions on our ability to pay dividends, see the Liquidity and
Capital Resources section of Management's Discussion and Analysis of Financial Condition and Results of
Operations.

Repurchases

We did not repurchase any shares of our common stock during the two years ended December 31, 2004.



                                                      19



Item 6.    Selected Financial Data

Our selected historical consolidated financial data as of and for each of the five years ended December 31,
2004 follows ($ amounts in millions, except earnings per share). We derived the balance sheet data for 2004 and
2003 and the income statement data for the years 2004, 2003 and 2002 from our consolidated financial statements
in this Form 10-K. We derived the balance sheet data for 2002, 2001 and 2000 and the income statement data for
the years 2001 and 2000 from audited consolidated financial statements not in this Form 10-K. We have
reclassified certain amounts for prior years to conform with our 2004 presentation. Prior to June 25, 2001,
Phoenix Life was the parent company of our consolidated group. In connection with its demutualization, Phoenix
Life became a subsidiary and PNX became the parent company of our consolidated group.

We prepared the following financial data, other than statutory data, in conformity with accounting principles
generally accepted in the United States, or GAAP. We derived the statutory data from the Annual Statements of
our Life Companies filed with state insurance regulatory authorities and prepared it in accordance with
statutory accounting practices prescribed or permitted by state insurance regulators, which vary in certain
material respects from GAAP.

You should read the following in conjunction with Management's Discussion and Analysis of Financial Condition
and Results of Operations and our consolidated financial statements in this Form 10-K.



                                                   20

Selected Financial Data:
($ amounts in millions)                      2004           2003          2002           2001          2000
                                        -------------  ------------- ------------- -------------- -------------
Income Statement Data
Premiums...............................  $    990.6     $  1,042.2    $  1,082.0    $   1,112.7    $  1,147.4
Insurance and investment product fees..       534.9          500.9         493.8          469.7         559.1
Broker-dealer commission and
  distribution fee revenues............        56.9           81.5          85.0           96.3          97.3
Net investment income..................     1,075.7        1,107.4         940.5          882.9       1,131.9
Unrealized gain on trading equity
  securities...........................        85.9           --            --             --            --
Net realized investment gains
  (losses).............................        (0.8)         (98.5)       (133.9)         (84.9)         89.2
                                        -------------  ------------- ------------- -------------- -------------
Total revenues.........................  $  2,743.2     $  2,633.5    $  2,467.4    $   2,476.7    $  3,024.9
                                        =============  ============= ============= ============== =============
Total benefits and expenses............  $  2,606.0     $  2,653.7    $  2,671.0    $   2,738.8    $  2,867.1
                                        =============  ============= ============= ============== =============

Income (loss) from continuing
  operations...........................  $     86.3     $     (4.1)   $   (140.7)   $    (147.3)   $     96.0
Income (loss) from discontinued
  operations, net of income taxes......         0.1           (2.1)         (1.3)          (2.5)        (12.7)
                                        -------------  ------------- ------------- -------------- -------------
Income (loss) before cumulative effect
  of accounting changes................        86.4           (6.2)       (142.0)        (149.8)         83.3
Cumulative effect of accounting
  changes..............................        --             --          (130.3)         (65.4)         --
                                        -------------  ------------- ------------- -------------- -------------
Net income (loss)......................  $     86.4     $     (6.2)   $   (272.3)   $    (215.2)   $     83.3
                                        =============  ============= ============= ============== =============

Basic Earnings Per Share(1)
Income (loss) from continuing
  operations...........................  $     0.91     $    (0.04)   $    (1.44)   $     (1.41)   $     0.92
                                        =============  ============= ============= ============== =============
Net income (loss)......................  $     0.91     $    (0.07)   $    (2.78)   $     (2.06)   $     0.80
                                        =============  ============= ============= ============== =============

Diluted Earnings Per Share(1)
Income (loss) from continuing
  operations...........................  $     0.86     $    (0.04)   $    (1.44)   $     (1.41)   $     0.92
                                        =============  ============= ============= ============== =============
Net income (loss)......................  $     0.86     $    (0.07)   $    (2.78)   $     (2.06)   $     0.80
                                        =============  ============= ============= ============== =============

Dividends per share....................  $     0.16     $     0.16    $     0.16    $      --      $     --
                                        =============  ============= ============= ============== =============

Ratio of Earnings to Fixed Charges
Ratio of earnings to fixed charges(2) ..         1.7           --            --             --             1.8
Supplemental ratio of earnings to
  fixed charges - excluding interest
  credited on policyholder contract
  balances(3) ..........................         4.5           --            --             --             4.1

Balance Sheet Data
Cash and general account investments...  $ 17,334.6     $ 17,242.8    $ 16,812.8    $  14,400.4    $ 12,767.5
                                        =============  ============= ============= ============== =============
Total assets...........................  $ 28,362.6     $ 27,559.2    $ 25,235.9    $  22,535.9    $ 20,313.5
                                        =============  ============= ============= ============== =============
Indebtedness...........................  $    690.8     $    639.0    $    644.3    $     599.3    $    425.1
                                        =============  ============= ============= ============== =============
Total liabilities......................  $ 26,299.2     $ 25,588.8    $ 23,389.9    $  20,266.6    $ 18,341.6
                                        =============  ============= ============= ============== =============
Minority interest in net assets of
  consolidated subsidiaries............  $     41.0     $     22.6    $     19.2    $       1.2    $    130.7
                                        =============  ============= ============= ============== =============
Total stockholders' equity.............  $  2,022.4     $  1,947.8    $  1,826.8    $   2,307.8    $  1,840.9
                                        =============  ============= ============= ============== =============

Asset Management Segment
  Third-party assets under
    management.........................  $ 42,908.5     $ 46,260.5    $ 41,835.3    $  41,723.5    $ 47,391.9
                                        =============  ============= ============= ============== =============

Consolidated Statutory Data
Premiums, deposits and fees............  $  2,151.1     $  3,364.9    $  3,919.7    $   3,144.8    $  2,344.8
                                        =============  ============= ============= ============== =============
Net income (loss)......................  $     46.3     $    (26.0)   $   (130.7)   $     (66.0)   $    266.1
                                        =============  ============= ============= ============== =============
Capital and surplus(4).................   $    814.6     $    762.4    $    861.4    $   1,149.8    $  1,322.8
Asset valuation reserve, or AVR(5).....        221.2          200.0         147.8          223.4         560.4
                                        -------------  ------------- ------------- -------------- -------------
Capital, surplus and AVR...............  $  1,035.8     $    962.4    $  1,009.2    $   1,373.2    $  1,883.2
                                        =============  ============= ============= ============== =============


                                                      21



_________

(1) We calculated earnings per share for each of the two years from 2000 through 2001 on a pro forma basis,
   based on 104.6 million weighted-average shares outstanding. The pro forma weighted-average shares
   outstanding calculation for 2001 is based on the weighted-average shares outstanding for the period from the
   demutualization and IPO to the end of the year.
(2) Due to our losses during 2003, 2002 and 2001, the ratio of earnings to fixed charges for those years was
   less than 1:1. We would need $11.4 million, $113.6 million and $131.6 million in additional earnings for the
   years 2003, 2002 and 2001, respectively, to achieve a 1:1 coverage ratio.
(3) Due to our losses during 2003, 2002 and 2001, the ratio coverages, excluding interest credited on
   policyholder contract balances, were less than 1:1. We would need $11.4 million, $113.6 million and $131.6
   million in additional earnings for the years 2003, 2002 and 2001, respectively, to achieve a 1:1 coverage
   ratio.
(4) In accordance with accounting practices prescribed by the New York State Insurance Department, Phoenix
   Life's capital and surplus includes $205.2 million and $175.0 million principal amount of surplus notes
   outstanding at December 31, 2004 and 2003, respectively.
(5) The AVR is a statutory reserve intended to mitigate changes to the balance sheet as a result of
   fluctuations in asset values.

                                                      22


Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

                                           FORWARD-LOOKING STATEMENT

The following discussion may contain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. The Phoenix Companies, Inc., or the Company, intends these forward-looking
statements to be covered by the safe harbor provisions of the federal securities laws relating to
forward-looking statements. These include statements relating to trends in, or representing management's
beliefs about, the Company's future strategies, operations and financial results, as well as other statements
including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "may," "should" and
other similar expressions. Forward-looking statements are made based upon management's current expectations and
beliefs concerning trends and future developments and their potential effects on the Company. They are not
guarantees of future performance. Actual results may differ materially from those suggested by forward-looking
statements as a result of risks and uncertainties which include, among others: (i) changes in general economic
conditions, including changes in interest and currency exchange rates and the performance of financial markets;
(ii) heightened competition, including with respect to pricing, entry of new competitors and the development of
new products and services by new and existing competitors; (iii) the Company's primary reliance, as a holding
Company, on dividends and other payments from its subsidiaries to meet debt payment obligations, particularly
since the Company's insurance subsidiaries' ability to pay dividends is subject to regulatory restrictions;
(iv) regulatory, accounting or tax developments that may affect the Company or the cost of, or demand for, its
products or services; (v) downgrades in the financial strength ratings of the Company's subsidiaries or in the
Company's credit ratings; (vi) discrepancies between actual claims experience and assumptions used in setting
prices for the products of insurance subsidiaries and establishing the liabilities of such subsidiaries for
future policy benefits and claims relating to such products; (vii) movements in the equity markets that affect
our investment results, including those from venture capital, the fees we earn from assets under management and
the demand for our variable products; (viii) the Company's continued success in achieving planned expense
reductions; (ix) the effects of closing the Company's retail brokerage operations; and (x) other risks and
uncertainties described in any of the Company's filings with the SEC. The Company undertakes no obligation to
update or revise publicly any forward-looking statement, whether as a result of new information, future events
or otherwise.


                                                      23



                                         RISKS RELATED TO OUR BUSINESS

Poor relative investment performance of some of our equity asset management strategies has led to material
redemptions which have reduced assets under management and revenues. We could have continued underperformance
and outflows.

In 2004, 61% of third-party assets under management underperformed against their respective one-year
benchmarks. Partly as a result, our asset management business experienced net outflows of $6.6 billion during
the year. This poor relative performance could continue, which could result in lower assets under management
and lower revenues.

Poor performance of the equity markets could adversely affect sales and assets under management of our asset
management, variable universal life and variable annuity products, as well as the performance of our Venture
Capital segment and potential future pension plan funding requirements.

The United States equity markets can be volatile and experience both periods of strong growth and of
substantial declines.

There are four ways in which equity market declines and volatility have affected, or have the potential to
affect, us negatively.

    •    First, because the fee revenues of our asset management and, to a lesser degree, variable products
         businesses are based on the value of assets under our management, poor performance of the equity
         markets limits our fee revenues by reducing the value of the assets we manage.
    •    Second, returns on venture capital investments are correlated with the performance of the equity
         markets. During the severe market declines of 2002 and 2001, our venture capital investments decreased
         our income from continuing operations by $38.5 million and $54.9 million, respectively. If equity
         markets decline, we could again experience losses in our venture capital investments.
    •    Third, the funding requirements of our pension plan are dependent on the performance of the equity
         markets. As of December 31, 2004, the portfolio funding the Company's pension plan consisted of 67%
         equities. In a severe market decline, the value of the assets supporting the pension plan would
         decrease, increasing the requirement for future funding. This funding requirement would increase
         expenses and decrease the earnings of the Company.
    •    Fourth, significant market volatility or declines could cause potential purchasers of our products to
         refrain from investing, and current investors to withdraw from the markets or reduce their level of
         investment. We cannot estimate the impact of prior market declines on our sales.

Changes in interest rates could harm cash flow and profitability in our life and annuity businesses.

Our life insurance and annuity businesses are sensitive to interest rate changes. In periods of increasing
interest rates, life insurance policy loans and surrenders and withdrawals could increase as policyholders seek
investments with higher perceived returns. This could require us to sell invested assets at a time when their
prices are depressed by the increase in interest rates, which could cause us to realize investment losses.

Conversely, during periods of declining interest rates, we could experience increased premium payments on
products with flexible premium features, repayment of policy loans and increased percentages of policies
remaining in force. We would obtain lower returns on investments made with these cash flows. In addition,
borrowers may prepay or redeem mortgages and bonds in our investment portfolio so that we might have to
reinvest those proceeds in lower interest-bearing investments. As a consequence of these factors, we could
experience a decrease in the spread between the returns on our investment portfolio and amounts credited to
policyholders and contractholders, which could adversely affect our profitability.


                                                      24



We depend on non-affiliated distribution for our product sales and if our relationships with these distributors
were harmed, we could suffer a loss in revenues.

We distribute our products through non-affiliated advisors, broker-dealers and other financial intermediaries.
There is substantial competition for business within most of these distributors. We believe that our sales
through these distributors depend on factors such as our financial strength, the quality of our products and on
the services we provide to, and the relationships we develop with, these distributors. Our distributors are
generally free to sell products from a variety of providers, which makes it important for us to continually
offer distributors products and services they find attractive. We may not be able to establish or maintain
satisfactory relationships with distributors if our products or services do not meet their needs. Accordingly,
our revenues and profitability would suffer.

Downgrades to PNX's debt ratings and Phoenix Life's financial strength ratings could increase policy surrenders
and withdrawals, adversely affect relationships with distributors, reduce new sales and earnings from certain
of our life insurance products and increase our future borrowing costs.

Rating agencies assign Phoenix Life financial strength ratings, and assign us debt ratings, based in each case
on their opinions of the relevant company's ability to meet its financial obligations.

Financial strength ratings reflect a rating agency's view of an insurance company's ability to meet its
obligations to its insureds. These ratings are therefore key factors underlying the competitive position of
life insurers. The current financial strength and debt ratings are set forth in the chart below.

                                           Financial Strength Rating              Senior Debt Rating
      Rating Agency                             of Phoenix Life                          of PNX
      ---------------------------         ---------------------------          --------------------------

      A.M. Best Company, Inc.             A ("Excellent")                      Bbb+ ("Adequate")

      Fitch                               AA- ("Very Strong")                  A- ("Strong")

      Standard & Poor's                   A ("Strong")                         BBB ("Good")

      Moody's                             A3 ("Good")                          Baa3 ("Adequate")

Moody's and Standard & Poor's each have a stable outlook for our ratings, while A.M. Best and Fitch have a
negative outlook.

Any rating downgrades may result in increased interest costs in connection with future borrowings. Such an
increase would decrease our earnings and could reduce our ability to finance our future growth on a profitable
basis.

Downgrades may also trigger defaults or repurchase obligations.

Downgrades could adversely affect our reputation and, hence, our relationships with existing distributors and
our ability to establish additional distributor relationships. If this were to occur, we might experience a
decline in sales of certain products and the persistency of existing customers. At this time, we cannot
estimate the impact on sales or persistency. A significant decline in our sales or persistency could have a
material adverse effect on our financial results.


                                                      25



We might need to fund deficiencies in our closed block, which would result in a reduction in net income and
could result in a reduction in investments in our on-going business.

We have allocated assets to our closed block to produce cash flows that, together with additional revenues from
the closed block policies, are reasonably expected to support our obligations relating to these policies. Our
allocation of assets to the closed block was based on actuarial assumptions about our payment obligations to
closed block policyholders and the continuation of the non-guaranteed policyholder dividend scales in effect
for 2000, as well as assumptions about the investment earnings the closed block assets will generate over time.
Since such assumptions are to some degree uncertain, it is possible that the cash flows generated by the closed
block assets and the anticipated revenues from the policies included in the closed block will prove
insufficient to provide for the benefits guaranteed under these policies even if the non-guaranteed
policyholder dividend scale were to be cut. If this were to occur, we would have to fund the resulting
shortfall from assets outside of the closed block, which could adversely affect our profitability.

The independent trustees of our mutual funds and closed-end funds, intermediary program sponsors, managed
account clients and institutional asset management clients could terminate their contracts with us. This would
reduce our investment management fee revenues.

Each of the mutual funds and closed-end funds for which Phoenix Investment Partners acts as investment advisor
or sub-advisor is registered under the Investment Company Act of 1940 and is governed by a board of trustees or
board of directors. SEC rules require a majority of each board's members to be independent, and proposed
amendments would increase that requirement to 75%. Each fund's board has the duty of deciding annually whether
to renew the contract under which Phoenix Investment Partners manages the fund. Board members have a fiduciary
duty to act in the best interests of the shareholders of their funds. Either the board members or, in limited
circumstances, the shareholders may terminate an advisory contract with Phoenix Investment Partners and move
the assets to another investment advisor. The board members also may deem it to be in the best interests of a
fund's shareholders to make other decisions adverse to us, such as reducing the compensation paid to Phoenix
Investment Partners or imposing restrictions on Phoenix Investment Partners' management of the fund.

Our asset management agreements with institutional clients, intermediary program sponsors (who "wrap," or make
available, our investment products within the management agreements they have with their own clients), direct
managed account clients and institutional clients are generally terminable by these sponsors and clients upon
short notice without penalty. As a result, there would be little impediment to these sponsors or clients
terminating our agreements if they became dissatisfied with our performance.

The termination of any of the above agreements relating to material portion of assets under management would
adversely affect our investment management fee revenues and could require us to impair the goodwill or
intangible assets associated with our asset management partners.

We might be unable to attract or retain personnel who are key to our business.

The success of our business is dependent to a large extent on our ability to attract and retain key employees.
Competition in the job market for professionals such as securities analysts, portfolio managers, sales
personnel and actuaries is generally intense. In general, our employees are not subject to employment contracts
or non-compete agreements.

Goodwill or intangible assets associated with our Asset Management business could become impaired requiring a
non-cash charge to earnings in the event of significant market declines, net outflows of assets, changes in
investment management contracts or the departure of key employees.

As of December 31, 2004, our Asset Management business had $725.3 million in goodwill and intangible assets
associated with our various partners. The amount of goodwill and intangible assets on our balance sheet is


                                                      26


supported by the assets under management and the related revenues of each of the partners. It might be
necessary to impair those assets if:

    •    we experienced a drop in assets under management due to a significant market decline or continued
         outflows such as in 2004 when we had net outflows of $6.6 billion;
    •    a material investment management contract, such as one with one of our mutual funds, were terminated, in
         this case by the independent trustees; or
    •    certain key employees at our Asset Management partners left the Company, which could cause outflows as
         clients opt to withdraw their funds following such departures.

We face strong competition in our businesses from mutual fund companies, banks, Asset Mmanagement firms and
other insurance companies. This competition could impair our ability to retain existing customers, attract new
customers and maintain our profitability.

We face strong competition in each of our businesses, comprising life insurance, annuities and asset
management. We believe that our ability to compete is based on a number of factors, including product features,
investment performance, service, price, distribution capabilities, scale, commission structure, name
recognition and financial strength ratings. While there is no single company that we identify as a dominant
competitor in our business overall, our actual and potential competitors include a large number of mutual fund
companies, banks, asset management firms and other insurance companies, many of which have advantages over us
in one or more of the above competitive factors. Recent industry consolidation, including acquisitions of
insurance and other financial services companies in the United States by international companies, has resulted
in larger competitors with financial resources, marketing and distribution capabilities and brand identities
that are stronger than ours. Larger firms also may be able to offer, due to economies of scale, more
competitive pricing than we can. In addition, some of our competitors are regulated differently than we are,
which may give them a competitive advantage; for example, many non-insurance company providers of financial
services are not subject to the costs and complexities of insurance regulation by multiple states. Further,
national banks, with their pre-existing customer bases for financial services products, may compete with
insurers as a result of the Gramm-Leach-Bliley Act of 1999, which permits mergers among commercial banks,
insurers and securities firms under one holding company.

We could have material losses in the future from our discontinued reinsurance business.

In 1999, we discontinued our reinsurance operations through a combination of sale, reinsurance and placement of
certain retained group accident and health reinsurance business into run-off. We adopted a formal plan to stop
writing new contracts covering these risks and to end the existing contracts as soon as those contracts would
permit. However, we remain liable for claims under those contracts. We also purchased aggregate excess-of-loss
reinsurance to further protect us from unfavorable results from this discontinued business. On February 7, 2005
we notified the aggregate excess-of-loss reinsurer that we were exercising our option to commute this contract.
The commutation will be effective during the second quarter of 2005. The effect of the commutation will not be
material to our consolidated financial statements.

We have established reserves for claims and related expenses that we expect to pay on our discontinued group
accident and health reinsurance business. These reserves are based on currently known facts and estimates
about, among other things, the amount of insured losses and expenses that we believe we will pay, the period
over which they will be paid, the amount of reinsurance we believe we will collect under our aggregate
excess-of-loss reinsurance, the amounts we believe we will collect from our retrocessionaires and the likely
legal and administrative costs of winding down the business. Our total reserves, including coverage available
from our reinsurance and reserves for amounts recoverable from retrocessionaires, were $110.0 million as of
December 31, 2004. Our total amounts recoverable from retrocessionaires related to paid losses were $60.0
million as of December 31, 2004.


                                                      27


We expect our reserves and reinsurance to cover the run-off of the business; however, the nature of the
underlying risks is such that the claims may take years to reach the reinsurers involved. Therefore, we expect
to pay claims out of existing estimated reserves for up to ten years as the level of business diminishes. In
addition, unfavorable claims experience is possible and could result in additional future losses. For these
reasons, we cannot know today what our actual claims experience will be.

In addition, we are involved in disputes relating to certain portions of our discontinued group accident and
health reinsurance business. See Note 17 to our consolidated financial statements in this Form 10-K for more
information.

In establishing our reserves described above for the payment of insured losses and expenses on this
discontinued business, we have made assumptions about the likely outcome of the disputes referred to above,
including an assumption that substantial recoveries would be available from our reinsurers on all of our
discontinued reinsurance business. However, the inherent uncertainty of arbitrations and lawsuits, including
the uncertainty of estimating whether any settlements we may enter into in the future would be on favorable
terms, makes it hard to predict outcomes with certainty. Given the need to use estimates in establishing loss
reserves, and the difficulty in predicting the outcome of arbitrations and lawsuits, our actual net ultimate
exposure likely will differ from our current estimate. If future facts and circumstances differ significantly
from our estimates and assumptions about future events with respect to the disputes referred to above or other
portions of our discontinued reinsurance business, our current reserves may need to be increased materially,
with a resulting material adverse effect on our results of operations and financial condition.

Some of the Bush administration's legislative proposals would reduce or eliminate the benefit of deferral of
taxation for our insurance and annuity products. In addition, legislation eliminating or modifying either the
federal estate tax or the federal taxation of investment income could adversely affect sales of and revenues
from our life and annuity products.

The attractiveness to our customers of many of our products is due, in part, to favorable tax treatment.
Current federal income tax laws generally permit the tax-deferred accumulation of earnings on the premiums paid
by the holders of annuities and life insurance products. In 2003, the tax rate on long-term capital gains and
certain dividend income was reduced until 2008. President Bush's 2006 budget proposal would make these rate
reductions permanent. If this happens, it could have a negative impact on our sales and revenues. In addition,
President Bush has indicated that fundamental changes to the Internal Revenue Code of 1986, as amended, or the
Code, are among his legislative priorities for his second term. These changes might include the adoption of a
flat tax, value-added tax or similar alternative structure, modifications to Social Security, the creation of
new and expanded vehicles for tax-exempt savings and lower taxes on investment income. The impact of these
proposals, if enacted, cannot reasonably be estimated.

Some of our life insurance products are specifically designed and marketed as policies that help a decedent's
heirs to pay estate tax. Legislation enacted in the spring of 2001 increased the size of estates exempt from
the federal estate tax, phased in reductions in the estate tax rate between 2002 and 2009 and repealed the
estate tax entirely in 2010. This legislation, despite its reinstatement of the estate tax in 2011, could have
a negative effect on our revenues from the sale of estate planning products. President Bush and members of
Congress have expressed a desire to modify the existing legislation, which could result in faster or more
complete reduction or repeal of the estate tax.

Changes in insurance and securities regulation could affect our profitability by imposing further restrictions
on the conduct of our business.

Our life insurance and annuity businesses are subject to comprehensive state regulation and supervision
throughout the United States. State insurance regulators and the National Association of Insurance
Commissioners, or the NAIC, continually reexamine existing laws and regulations, and may impose changes in the
future that put further regulatory burdens on us, thereby increasing our costs of doing business or otherwise


                                                      28


harm our business. This could have a material adverse affect on our results of operations and financial
condition.

The United States federal government does not directly regulate the insurance business. However, federal
legislation and administrative policies in areas which include employee benefit plan regulation, financial
services regulation and federal taxation and securities laws could significantly affect each of our businesses,
most notably our costs.

We and some of the policies, contracts and other products that we offer are subject to various levels of
regulation under the federal securities laws administered by the SEC as well as regulation by those states and
foreign countries in which we provide investment advisory services, offer products or conduct other
securities-related activities. We could be restricted in the conduct of our business for failure to comply with
such laws and regulations. Future laws and regulations, or the interpretation thereof, could have a material
adverse effect on our results of operations and financial condition by increasing our expenses in order to
comply with these regulations.


                                                      29



                                      MANAGEMENT'S DISCUSSION AND ANALYSIS

Management's discussion and analysis reviews our consolidated financial condition at December 31, 2004 and
2003; our consolidated results of operations for the years 2004, 2003 and 2002; and, where appropriate, factors
that may affect our future financial performance. This discussion should be read in conjunction with "Selected
Financial Data" and our consolidated financial statements in this Form 10-K.

Overview

We are a manufacturer of insurance, annuity and asset management products for the accumulation, preservation
and transfer of wealth. We provide products and services to affluent and high-net-worth individuals through
their advisors and to institutions directly and through consultants. We offer a broad range of life insurance,
annuity and asset management products and services through a variety of distributors. These distributors
include independent advisors and financial services firms who make our products and services available to their
clients.

We manufacture our products through two operating segments — Life and Annuity and Asset Management — which
include three product lines — life insurance, annuities and asset management. Through Life and Annuity we
offer a variety of life insurance and annuity products, including universal, variable universal, term life
insurance, and a range of variable annuity offerings. Asset Management comprises two lines of business —
private client and institutional.

Through our private client line of business, we provide investment management services principally on a
discretionary basis, with products consisting of open-end mutual funds, closed-end funds and managed accounts.
Managed accounts include intermediary programs sponsored and distributed by non-affiliated broker-dealers and
direct managed accounts sold and administered by us. These two types of managed accounts generally require
minimum investments of $100,000 and $1 million, respectively. Our private client business also provides
transfer agency, accounting and administrative services to our open-end mutual funds.

Through our institutional group, we provide discretionary and non-discretionary investment management services
primarily to corporations, multi-employer retirement funds and foundations, as well as to endowments and
special purpose funds. In addition, we manage alternative financial products such as structured finance
products. Structured finance products include collateralized obligations such as collateralized debt
obligations, or CDOs, backed by portfolios of public high yield bonds, commercial mortgage-backed or
asset-backed securities.

We report our remaining activities in two non-operating segments — Venture Capital and Corporate and Other.
Venture Capital includes limited partnership interests in venture capital funds, leveraged buyout funds and
other private equity partnerships sponsored and managed by third parties. These assets are investments of the
general accounts of our Life Companies. See Business—Venture Capital Segment. Corporate and Other includes
indebtedness; unallocated assets, liabilities and expenses; and certain businesses not of sufficient scale to
report independently. See Business—Corporate and Other Segment. These non-operating segments are significant
for financial reporting purposes, but do not contain products or services relevant to our core manufacturing
operations.

We derive our revenues principally from:

    •    premiums on whole life insurance;
    •    insurance and investment product fees on variable life and annuity products and universal life
         products;
    •    investment management and related fees; and
    •    net investment income and net realized investment gains.


                                                      30



Under GAAP, premium and deposit collections for variable life, universal life and annuity products are not
recorded as revenues. These collections are reflected on our balance sheet as an increase in separate account
liabilities for certain investment options of variable products. Collections for fixed annuities and certain
investment options of variable annuities are reflected on our balance sheet as an increase in policyholder
deposit funds. Collections for other products are reflected on our balance sheet as an increase in policy
liabilities and accruals.

Our expenses consist principally of:

    •    insurance policy benefits provided to policyholders, including interest credited on policies;
    •    policyholder dividends;
    •    deferred policy acquisition costs amortization;
    •    intangible assets amortization;
    •    interest expense;
    •    other operating expenses; and
    •    income taxes.

Our profitability depends principally upon:

    •    the adequacy of our product pricing, which is primarily a function of our:
         •   ability to select appropriate underwriting risks;
         •   mortality experience;
         •   ability to generate investment earnings;
         •   ability to maintain expenses in accordance with our pricing assumptions; and
         •   policies' persistency (the percentage of policies remaining in force from year to year as measured
             by premiums);
    •    the amount and composition of assets under management;
    •    the maintenance of our target spreads between the rate of earnings on our investments and dividend and
         interest rates credited to customers; and
    •    our ability to manage expenses.

Prior to Phoenix Life's demutualization, we focused on participating life insurance products, which pay
policyholder dividends. As of December 31, 2004, 74.0% of our life insurance reserves were for participating
policies. As a result, a significant portion of our expenses consists, and will continue to consist, of such
policyholder dividends. Our net income is reduced by the amounts of these dividends. Policyholder dividends
expense was $404.7 million during 2004, $418.8 million during 2003 and $401.8 million during 2002.

Our sales and financial results over the last several years have been affected by demographic, industry and
market trends. The baby boom generation has begun to enter its prime savings years. Americans generally have
begun to rely less on defined benefit retirement plans, social security and other government programs to meet
their postretirement financial needs. Product preferences have shifted between fixed and variable options
depending on market and economic conditions. Our balanced product portfolio including universal life, variable
life and variable annuity products, as well as a broad array of mutual funds and managed accounts, is well
positioned to meet this shifting demand.

Discontinued Operations

During 2004, we completed the sale of 100% of the common stock held by us in Phoenix National Trust Company.
The effect of this transaction is not material to our consolidated financial statements. Phoenix National Trust
Company is presented as a discontinued operation in our consolidated financial statements for all periods
presented.


                                                      31


In 1999, we discontinued our reinsurance operations. See Note 14 to our consolidated financial statements in
this Form 10-K for detailed information regarding our discontinued operations.

Recent Acquisitions and Dispositions

Life and Annuity

On October 25, 2004, we entered into an agreement with Friends Provident plc, or Friends Provident, to sell our
12% interest in Lombard International Assurance S.A., or Lombard, and to relinquish our notes receivable from
Lombard's affiliate, Insurance Development Holdings A.G., or IDH. This transaction closed on January 11, 2005
for consideration of $59.0 million and, under the terms of the sale, we may be entitled to additional
consideration, in the form of cash, based on Lombard's financial performance through 2006. We currently expect
to recognize an after-tax realized gain of between $7.0 million and $10.0 million in the first quarter of 2005
related to our sale of Lombard.

During the second quarter of 2004, we sold our retail affiliated broker-dealer operations to LPL. As part of
the transaction, advisors affiliated with Griffith and Main Street had the opportunity to move to LPL as
independent registered representatives. As of December 31, 2004, LPL had successfully recruited about 45% of
Griffith's total representatives, representing about 50% of Griffith's total gross dealer concessions. As of
December 31, 2004, we have not determined the ultimate persistency of the business written by these advisors,
but our experience through that date shows no material deterioration, reflecting the quality of our in-force
products and the professionalism of these advisors. As part of this transaction, we are expanding our
distribution relationship with LPL, adding life and annuity products to our existing asset management
offerings, and we have recently commenced a marketing plan to position these products within LPL and its more
than 5,500 producers.

Revenues net of eliminations and direct expenses net of deferrals and certain transaction related costs
included in our consolidated financial statements related to our retail affiliated broker-dealer operations
sold during 2004 are as follows:


                                                                             Year Ended December 31,
Revenues and Direct Expenses Of                                         ----------------------------------
Retail Affiliated Broker-dealer Operations:                                2004         2003       2002
($ amounts in millions)                                                 ----------  ----------- ----------
Insurance and investment product fees revenues, net of eliminations..... $   32.0   $   60.8    $   61.8
Direct other operating expenses, net of deferrals.......................     38.7       72.8        74.4

During 2004, we incurred a $3.6 million after-tax charge for an impairment of goodwill related to Main Street,
offset by a $2.7 million after-tax gain on the sale of the broker-dealer operations. Both the charge and the
gain were recorded to realized investment gains and losses. In addition, we incurred a $10.2 million after-tax
charge related to lease termination costs, offset by a $4.4 million after-tax gain related to curtailment
accounting in connection with employee benefit plans.

In 2003, we acquired the remaining interest in PFG Holdings, Inc., or PFG, the holding company for our private
placement operation, for initial consideration of $16.7 million. Under the terms of the purchase agreement, we
may be obligated to pay additional consideration of up to $86.5 million to the selling shareholders, including
$10.0 million during 2005 through 2007 based on certain financial performance targets being met, and the
balance in 2008 based on the appraised value of PFG as of December 31, 2007. During the year ended December 31,
2004, we paid $3.0 million under this obligation.

In 2002, we acquired the variable life and variable annuity business of Valley Forge Life Insurance Company (a
subsidiary of CNA Financial Corporation). See Note 3 to our consolidated financial statements in this Form 10-K
for further information regarding the acquisition of Valley Forge Life Insurance Company.


                                                      32


Asset Management

In March 2004, we acquired the remaining minority interests in Walnut Asset Management LLC and Rutherford Brown
& Catherwood, LLC for $2.1 million. This additional purchase price was accounted for as a step-acquisition by
Phoenix Investment Partners and was allocated to goodwill and definite-lived intangible assets, accordingly.

In 2002 we acquired a 60% equity interest in Kayne Anderson Rudnick, LLC, or Kayne Anderson Rudnick, for $102.4
million. This acquisition was accounted for using the purchase method under FASB Statement No. 141, Business
Combinations, or SFAS 141. In connection with this acquisition, the Acquisition Agreement and the related
Amended and Restated Operating Agreement resulted in the creation of mandatorily redeemable noncontrolling
interests, or noncontrolling interests, representing 40% of Kayne Anderson Rudnick's members' interests held by
certain of its members. Certain of these noncontrolling interests in Kayne Anderson Rudnick have scheduled
redemption dates (5% at each date) as of December 31, 2004, 2005, and 2006, at a price based upon operating
results of Kayne Anderson Rudnick for the year then ended. These 15% noncontrolling interests, as well as the
remaining 25% of Kayne Anderson Rudnick's noncontrolling interests, are mandatorily redeemable upon death of a
member and, as such, are reported as a liability on our consolidated balance sheet in accordance with FASB
Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and
Equity, or SFAS 150. Separate agreements in connection with the 25% noncontrolling interests held by certain
Kayne Anderson Rudnick's members give the noncontrolling interest-holders the right to require Phoenix
Investment Partners to redeem all or a part of their noncontrolling interest at specified future dates and at a
price determined based upon operating results of Kayne Anderson Rudnick. Conversely, the terms of these
agreements also give Phoenix Investment Partners the right to redeem the outstanding minority interests at the
same price as the noncontrolling interest-holder may exercise its right to sell. These agreements may expire
unexercised should Kayne Anderson Rudnick's operating results decline from the initial measurement date.

In addition to the initial cost of the purchase of Kayne Anderson Rudnick, in the first quarter of 2004 we made
a payment of $30.1 million in contingent consideration, which was based upon management fee revenues for the
purchased business through the end of 2003. Phoenix Investment Partners had accrued for this payment as of
December 31, 2003 and allocated it entirely to goodwill.

In January 2004, one member of Kayne Anderson Rudnick accelerated his portion of the 15% noncontrolling
interest redemption, at which time we acquired an additional 0.3% of the company. Phoenix Investment Partners
has accrued $11.4 million related to the remaining 4.9% redemption required as of December 31, 2004, has
accounted for this payment as a step-acquisition and has allocated the purchase price to goodwill and
definite-lived intangible assets, accordingly. The two remaining 4.9% noncontrolling interest redemptions will
be accounted for as step-acquisitions as the purchase price contingency resolves.

During 2004, we purchased a contract to manage the assets of the FMI Sasco Contrarian Value Fund, an open-end
mutual fund. This transaction is not material to our consolidated financial statements.

Corporate and Other

During 2004, we sold the stock of Phoenix Global Solutions (India) Pvt. Ltd., our India-based information
technology subsidiary, and essentially all of the assets of its United States affiliate, Phoenix Global
Solutions, Inc., to Tata Consultancy Services Limited, a division of Tata Sons Ltd. This transaction is not
material to our consolidated financial statements.

In January 2005, we sold our equity interest in Aberdeen for net proceeds of $70.4 million as further described
in Notes 1 and 5 to our consolidated financial statements in this Form 10-K.


                                                      33



The Demutualization

Phoenix Home Life demutualized on June 25, 2001 by converting from a mutual life insurance company to a stock
life insurance company, became a wholly-owned subsidiary of PNX and changed its name to Phoenix Life Insurance
Company, or Phoenix Life. See Note 3 to our consolidated financial statements in this Form 10-K for detailed
information regarding the demutualization and closed block.

Recently Issued Accounting Standards

Share-Based Payment: On December 16, 2004, the Financial Accounting Standards Board, or the FASB, issued FASB
Statement No. 123 (revised 2004), Share-Based Payment, or SFAS 123(R), which requires that compensation cost
related to share-based payment transactions be recognized in financial statements at the fair value of the
instruments issued. While prior to the issuance of SFAS 123(R), recognition of such costs at fair value was
optional, we elected to do so for all share-based compensation that we awarded after December 31, 2002.
Accordingly, we do not expect our adoption of SFAS 123(R) to have a material effect on our consolidated
financial statements.

Other-Than-Temporary Impairments: Portions of Emerging Issues Task Force Abstract EITF 03-1, The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments, or EITF 03-1, are effective for
fiscal periods beginning after June 15, 2004. EITF 03-1 provides guidance as to the determination of
other-than-temporarily impaired securities and requires additional financial disclosures with respect to
unrealized losses. These accounting and disclosure requirements largely codify our existing practices as to
other-than-temporarily impaired securities and thus, are not anticipated to have a material effect on our
consolidated financial statements. The effective date of certain portions of EITF 03-1 has been delayed pending
further interpretive guidance. Because significant uncertainty remains surrounding what form the guidance will
ultimately take, we cannot predict what effect, if any, adoption of the pending portions will have on our
consolidated financial statements.

Postretirement Benefits: On May 19, 2004, the FASB issued FASB Staff Position No. FAS 106-2, Accounting and
Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003,
or the FSP. For employers that sponsor postretirement benefit plans, or plan sponsors that provide prescription
drug benefits to retirees, the FSP requires any effects of the anticipated federal tax subsidy related to those
drug benefits be treated as an actuarial gain. The effect of our adoption of the FSP is not material to our
consolidated financial statements.

Effective July 1, 2003, we adopted SFAS 150. The effect of our adoption was to reclassify the mandatorily
redeemable noncontrolling interests related to our asset management subsidiaries from "minority interest" to
"other liabilities" in our consolidated balance sheet. In addition, within our consolidated statement of
operations, we reclassified earnings attributed to those interests from the caption "minority interest in net
income of subsidiaries" to "other operating expenses." These changes in presentation were not material to our
consolidated financial statements.

Accounting Changes

Nontraditional Long-Duration Contracts and Separate Accounts: Effective January 1, 2004, we adopted the AICPA's
Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional
Long-Duration Contracts and for Separate Accounts, or SOP 03-1. SOP 03-1 provides guidance related to the
accounting, reporting and disclosure of certain insurance contracts and separate accounts, including guidance
for computing reserves for products with guaranteed benefits such as guaranteed minimum death benefits and for
products with annuitization benefits such as guaranteed minimum income benefits. In addition, SOP 03-1
addresses the presentation and reporting of separate accounts, as well as rules concerning the capitalization
and amortization of sales inducements. Since this new accounting standard largely codifies certain accounting
and reserving practices related to applicable nontraditional long-duration contracts and separate


                                                      34


accounts that we already followed, our adoption did not have a material effect on our consolidated financial
statements.

Variable Interest Entities. A new accounting standard was issued in January 2003 that interprets the existing
standard on consolidation. This new accounting standard was revised and reissued in December 2003 as FIN 46(R),
Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51, or FIN 46(R). It clarifies the
application of standards of consolidation to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to
finance its activities without additional subordinated financial support from other parties ("variable interest
entities"). As of December 31, 2003, we adopted FIN 46(R) for special purpose entities, or SPEs, where we may
hold a variable interest. Our adoption of FIN 46(R) resulted in no additional variable interest entities being
consolidated by us.

In accordance with previous guidance, we continue to consolidate certain collateralized obligation trusts, or
CDOs, which we sponsor.

Effect of Consolidation of Certain CDOs on
Consolidated Financial Statements:                                 2004           2003            2002
($ amounts in millions)                                       -------------- --------------  --------------
Decrease in net income or increase in net loss..............   $     (12.9)   $      (2.4)    $     (26.3)
                                                              ============== ==============  ==============
Reduction in stockholder's equity...........................   $     (67.5)   $     (77.3)    $    (204.9)
                                                              ============== ==============  ==============

The above non-cash charges to earnings and stockholders' equity primarily relate to realized and unrealized
investment losses within the CDOs. Upon maturity or other liquidation of the trusts, the fair value of the
investments pledged as collateral will be used to settle the non-recourse collateralized obligations with any
shortfall in such investments inuring to the third-party note and equity holders. To the extent there remains a
recorded liability for non-recourse obligations after all the assets pledged as collateral are exhausted, such
amount will be reduced to zero with a corresponding benefit to earnings. Accordingly, these investment losses
and any future investment losses under this method of consolidation will ultimately reverse upon the maturity
or other liquidation of the non-recourse collateralized obligations. These non-recourse obligations mature
between 2011 through 2014 but contain call provisions. The call provisions may be triggered at the discretion
of the equity investors based on market conditions and are subject to certain contractual limitations.

GAAP requires us to consolidate all the assets and liabilities of these collateralized obligation trusts which
results in the recognition of realized and unrealized losses even though we have no legal obligation to fund
such losses in the settlement of the collateralized obligations. The FASB continues to evaluate, through the
issuance of FASB staff positions, the various technical implementation issues related to consolidation
accounting. We will continue to assess the impact of any new implementation guidance issued by the FASB as well
as evolving interpretations among accounting professionals. Additional guidance and interpretations may affect
our application of consolidation accounting in future periods.

Stock-based Compensation: A new standard was issued by the FASB in December 2002 which amends an existing
standard on accounting for stock-based compensation. The new standard provides methods of transition for a
voluntary change to fair value accounting for stock-based compensation. We adopted fair value accounting for
stock-based compensation in 2003 using the prospective method of transition provided by the new standard, which
results in expense recognition for stock options awarded after December 31, 2002. See Note 11 to our
consolidated financial statements in this Form 10-K for additional disclosure on the requirements of the new
standard as it relates to our business.

Goodwill and Other Intangible Assets. At the beginning of 2002, we adopted a new accounting standard for
goodwill and other intangible assets, including amounts reflected in our carrying value of equity method
investments. Under this new standard, we discontinued recording amortization expense on goodwill and other
intangible assets with indefinite lives, but we continue recording amortization expense for those assets with
definite estimated lives. See Note 4 to our consolidated financial statements in this Form 10-K for a


                                                      35


comprehensive discussion of the adoption of the new standard and its effects on our consolidated financial
statements.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our
consolidated financial statements, which have been prepared in accordance with GAAP. GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Critical accounting estimates are reflective of significant judgments, often as a result of the need to make
estimates about the effect of matters that are inherently uncertain. The following are areas that we believe
require significant judgments, together with references to the footnote(s) in which each accounting policy is
discussed in relation to our business:

    •    Deferred Policy Acquisition Costs and Present Value of Future Profits
         The costs of acquiring new business, principally commissions, underwriting, distribution and policy
         issue expenses, all of which vary with and are primarily related to production of new business, are
         deferred. In connection with our 1997 acquisition of the Confederation Life business, we recognized an
         asset for the present value of future profits representing the present value of estimated net cash
         flows embedded in the existing contracts acquired. This asset is included in deferred acquisition
         costs.

         We amortize deferred acquisition costs and present value of future profits based on the related
         policy's classification. For individual participating life insurance policies, deferred acquisition
         costs and present value of future profits are amortized in proportion to estimated gross margins. For
         universal life, variable universal life and accumulation annuities, deferred acquisition costs and
         present value of future profits are amortized in proportion to estimated gross profits. Policies may
         be surrendered for value or exchanged for a different one of our products (internal replacement). The
         deferred acquisition costs balance associated with the replaced or surrendered policies is amortized
         to reflect these surrenders.

         The amortization of deferred acquisition costs and present value of future profits requires the use of
         various assumptions, estimates and judgments about the future. Significant assumptions include those
         concerning expenses, investment performance, mortality and policy cancellations (i.e., lapses,
         withdrawals and surrenders). These assumptions are reviewed on a regular basis and are generally based
         on our past experience, industry studies, regulatory requirements and judgments about the future.
         Changes in estimated gross margins and gross profits based on actual experiences are reflected as an
         adjustment to total amortization to date resulting in a charge or credit to earnings. Finally,
         analyses are performed periodically to assess whether there are sufficient gross margins or gross
         profits to amortize the remaining deferred acquisition cost balances.

         We regularly evaluate our estimated gross profits to determine if actual experience or other evidence
         suggests that earlier estimates should be revised. Several assumptions considered to be significant in
         the development of estimated gross profits include separate account fund performance, surrender and
         lapse rates, estimated interest spread and estimated mortality. The separate account fund performance
         assumption is critical to the development of the estimated gross profits related to our variable
         annuity and variable and interest-sensitive life insurance businesses. The average long-term rate of
         assumed separate account fund performance used in estimating gross profits was 6.0% for the variable
         annuity business and 6.9% for the variable life business at December 31, 2004.

         See Note 3 to our consolidated financial statements and Item 7A, Quantitative and Qualitative
         Disclosures About Market Risk in this Form 10-K for more information.


                                                      36



    •    Policy Liabilities and Accruals
         See Note 3 to our consolidated financial statements and Item 7A, Quantitative and Qualitative
         Disclosures About Market Risk in this Form 10-K for more information.

    •    Goodwill and Other Intangible Assets
         At the beginning of 2002, we adopted a new accounting standard for goodwill and other intangible
         assets, including amounts reflected in our carrying value of equity-method investments. Under this new
         standard, we discontinued recording amortization expense on goodwill and other intangible assets with
         indefinite lives, but we continue recording amortization expense for those intangible assets with
         definite estimated lives. For goodwill and intangible assets, we perform impairment tests at the
         reporting-unit level at least annually. For purposes of the goodwill and indefinite-lived intangible
         assets impairment test, the fair value of the reporting units is based on the sum of: a multiple of
         revenue, plus the fair value of the units' tangible fixed assets. Prior to 2002, we amortized goodwill
         principally over 40 years and investment management contracts and employment contracts over five to 16
         years and three to seven years, respectively. All amortization expense has been and continues, for
         intangible assets with definite lives, to be calculated on a straight-line basis.

         See Note 4 to our consolidated financial statements in this Form 10-K for more information.

    •    Valuation of Debt and Equity Securities
         We classify our debt and equity securities held in our general account, as well as those pledged as
         collateral, as available-for-sale and report them in our balance sheet at fair value. Fair value is
         based on quoted market price, where available. When quoted market prices are not available, we
         estimate fair value by discounting debt security cash flows to reflect interest rates currently being
         offered on similar terms to borrowers of similar credit quality, by quoted market prices of comparable
         instruments and by independent pricing sources or internally developed pricing models.

         Fair Value of General Account Fixed Maturity Securities             As of December 31, 2004
         by Pricing Source:                                             -----------------------------------
         ($ amounts in millions)                                             Fixed
                                                                           Maturities        % of Total
                                                                          At Fair Value      Fair Value
                                                                        ----------------- -----------------

         Priced via independent market quotations.....................   $     10,904.4          80.9%
         Priced via matrices..........................................          2,149.5          16.0%
         Priced via broker quotations.................................            298.6           2.2%
         Priced via other methods.....................................            119.3           0.9%
         Short-term investments*......................................              4.5            --%
                                                                        ----------------- -----------------
         Total........................................................   $     13,476.3         100.0%
                                                                        ================= =================
         *Short-term investments are valued at amortized cost, which approximates fair value.

         Investments whose value, in our judgment, is considered to be other-than-temporarily impaired are
         written down to fair value as a charge to realized losses included in our earnings. The cost basis of
         these written-down investments is adjusted to fair value at the date the determination of impairment
         is made. The new cost basis is not changed for subsequent recoveries in value. For mortgage-backed and
         other asset-backed debt securities, we recognize income using a constant effective yield based on
         anticipated prepayments and the estimated economic lives of the securities. When actual prepayments
         differ significantly from anticipated prepayments, the effective yield is recalculated to reflect
         actual payments to date and any resulting adjustment is included in net investment income. For certain
         asset-backed securities, changes in estimated yield are recorded on a prospective basis and specific
         valuation methods are applied to these securities to determine if there has been an
         other-than-temporary decline in value. We report mortgage loans at unpaid principal balances, net of
         valuation reserves on impaired mortgages. We consider a mortgage loan to be impaired if we believe it
         is probable that we will be unable to collect


                                                      37


         all amounts of contractual interest and principal as scheduled in the loan agreement. We do not accrue
         interest income on impaired mortgage loans when the likelihood of collection is doubtful.

         See Note 5 to our consolidated financial statements, the Debt and Equity Securities section of
         Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 7A,
         Quantitative and Qualitative Disclosures About Market Risk in this Form 10-K for more information.

    •    Valuation of Investments in Venture Capital Partnerships
         We record our equity in the earnings of venture capital partnerships in net investment income using
         the most recent financial information received from the partnerships and estimating the earnings for
         any lag in reporting. To estimate the net equity in earnings of the venture capital partnerships for
         each quarter, we developed a methodology to estimate the change in value of the underlying investee
         companies in the venture capital partnerships. For public investee companies, we use quoted market
         prices at the end of each quarter, applying liquidity discounts to these prices in instances where
         such discounts were applied in the underlying partnerships' financial statements. For private investee
         companies, we apply a public industry sector index to estimate changes in valuations each quarter. We
         apply this methodology consistently each quarter with subsequent adjustments to reflect market events
         reported by the partnerships (e.g., new rounds of financing, initial public offerings and write-downs
         by the general partners). Our methodology recognizes both downward and upward adjustments in estimated
         values based on the indices, but when the general partner reduces the value of a private investee
         company, we do not adjust the fair value upward (by applying the public sector index) in excess of the
         most recent value reported by the general partner. Finally, we revise the valuations we have assigned
         to the investee companies annually to reflect the valuations in the audited financial statements
         received from the venture capital partnerships. Adjustments to the valuation of these companies to
         reflect reported valuations in the audited financial statements received from the venture capital
         partnerships will be reflected in our financial statements when received in the first and second
         quarters of 2005.

         The estimation process for valuing the private investee companies is inherently less precise than the
         estimation process for valuing public company investees. For private investee companies, we employ a
         sector index based on biotechnology, telecom, computer and healthcare indices as a proxy for
         estimating changes in fair value of individual private investee companies that will not necessarily
         match the underlying changes in fair value of an individual private investee company. Based on our
         experience, we have found that such indices represent a reasonable basis for estimating the fair value
         of an investee company during a period of deteriorating public equity markets such as that experienced
         in 2002. However, we believe this method is less reliable in rising markets such as that experienced
         in 2003 and 2004 relative to general partner valuations. Specifically, our experience indicates that
         upward revisions of valuations by the general partners for private company investees tend to lag
         increases in public equity markets as general partner valuations typically will be revised upward
         based on company specific liquidity events including new rounds of financing, mergers and acquisitions
         and initial public offerings.

         See Note 5 to our consolidated financial statements in this Form 10-K for more information.

    •    Deferred Income Taxes
         We account for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes. The deferred
         tax assets and/or liabilities are determined by multiplying the differences between the financial
         reporting and tax reporting bases for assets and liabilities by the enacted tax rates expected to be
         in effect when such differences are recovered or settled. The effect on deferred taxes of a change in
         tax rates is recognized in income in the period that includes the enactment date. Valuation allowances
         on deferred tax assets are estimated based on the Company's assessment of the realizability of such
         amounts.

         We have elected to file a consolidated federal income tax return for 2004 and prior years. Within the
         consolidated tax return, we are required by regulations of the Internal Revenue Service, or the IRS,
         to segregate our companies into two groups: life insurance companies and non-life insurance companies.


                                                      38


         We are limited as to the amount of any operating losses from one group that can be offset against
         taxable income of the other group. These limitations affect the amount of any operating loss
         carryforwards that we have recorded in our deferred tax assets now or in the future.

         As of December 31, 2004, we had deferred tax assets of $51.6 million related to net operating losses
         for federal income tax purposes and $7.9 million for state income tax purposes. The related federal
         net operating losses are scheduled to expire as follows: $61.2 million in 2017, $12.5 million in 2018,
         $1.1 million in 2019, $1.8 million in 2022, $33.5 million in 2023 and $44.8 million in 2024. The state
         net operating losses relate to the non-life subgroup and are scheduled to expire as follows: $29.8
         million in 2012 and 2013 and $72.0 million in 2019 through 2023. Due to the inability to combine the
         life insurance and non-life insurance subgroups for state income tax purposes, we established a $7.9
         million and a $4.6 million valuation allowance at the end of 2004 and 2003, respectively, relative to
         the state net operating loss carryforwards.

         We have determined, based on our earnings and future income, that it is more likely than not that the
         deferred income tax assets after valuation allowance already recorded as of December 31, 2004 and 2003
         will be realized. In determining the adequacy of future income, we have considered projected future
         income, reversal of existing temporary differences and available tax planning strategies that could be
         implemented, if necessary.

         Our federal income tax returns are routinely audited by the IRS and estimated provisions are routinely
         provided in the financial statements in anticipation of the results of these audits. The IRS has
         examined our consolidated group's federal income tax returns through 2001. The IRS is currently
         examining our federal income tax returns for 2002 and 2003. While it is often difficult to predict the
         outcome of these audits, including the timing of any resolution of any particular tax matter, we
         believe that our reserves, as recorded in other liabilities on the balance sheet, are adequate for all
         open tax years. Unfavorable resolution of any particular issue could result in additional use of cash
         to pay liabilities that would be deemed owed to the IRS. Additionally, any unfavorable or favorable
         resolution of any particular issue could result in an increase or decrease, respectively, to our
         effective income tax rate to the extent that our estimates differ from the ultimate resolution. During
         2004 we recognized a $5.7 million favorable tax benefit as a result of the favorable resolution of
         certain tax matters with the IRS.

         See Note 10 to our consolidated financial statements in this Form 10-K for more information related to
         income taxes.

    •    Pension and other Postemployment Benefits
         See Note 11 to our consolidated financial statements in this Form 10-K for more information on our
         pension and other postemployment benefits.


                                                      39



Consolidated Results of Operations

Summary Consolidated Financial Data:                    Year Ended December 31,                 Changes
($ amounts in millions, except per share data)  --------------------------------------  -----------------------
                                                    2004          2003        2002        2004/03     2003/02
                                                ------------  ------------ -----------  ----------- -----------

REVENUES
Premiums.....................................    $   990.6     $ 1,042.2    $ 1,082.0     $  (51.6)  $   (39.8)
Insurance and investment product fees........        534.9         500.9        493.8         34.0         7.1
Broker-dealer commission and
  distribution fee revenues..................         56.9          81.5         85.0        (24.6)       (3.5)
Investment income, net of expenses...........      1,075.7       1,107.4        940.5        (31.7)      166.9
Unrealized gain on trading equity securities.         85.9          --           --           85.9        --
Net realized investment gains (losses).......         (0.8)        (98.5)      (133.9)        97.7        35.4
                                                ------------  ------------ ------------  ----------- ----------
Total revenues...............................      2,743.2       2,633.5      2,467.4        109.7       166.1
                                                ------------  ------------ ------------  ----------- ----------

BENEFITS AND EXPENSES
Policy benefits, excluding
  policyholder dividends.....................      1,422.2       1,454.0      1,436.1        (31.8)       17.9
Policyholder dividends.......................        404.7         418.8        401.8        (14.1)       17.0
Policy acquisition cost amortization.........        110.2          94.1         59.2         16.1        34.9
Intangible asset amortization................         33.8          33.2         32.5          0.6         0.7
Intangible asset impairments.................         --            --           66.3         --         (66.3)
Interest expense on indebtedness.............         40.8          39.6         31.4          1.2         8.2
Interest expense on non-recourse
  collateralized obligations.................         33.6          48.9         30.5        (15.3)       18.4
Other operating expenses.....................        560.7         565.1        613.2         (4.4)      (48.1)
                                                ------------  ------------ ------------  ----------- ----------
Total benefits and expenses..................      2,606.0       2,653.7      2,671.0        (47.7)      (17.3)
                                                ------------  ------------ ------------  ----------- ----------
Income (loss) before income taxes, minority
  interest, equity in earnings of affiliates and
  cumulative effect of accounting changes....        137.2         (20.2)      (203.6)       157.4       183.4
Applicable income taxes (benefit)............         40.5         (18.3)       (58.8)        58.8        40.5
                                                ------------  ------------ ------------  ----------- ----------
Income (loss) from continuing operations
  before minority interest, equity in earnings
  of affiliates and cumulative effect of
  accounting changes.........................         96.7          (1.9)      (144.8)        98.6       142.9
Minority interest in net income
  of consolidated subsidiaries...............         --            (0.4)        (0.5)         0.4         0.1
Equity in undistributed earnings (loss)
   of affiliates.............................        (10.4)         (1.8)         4.6         (8.6)       (6.4)
                                                ------------  ------------ ------------  ----------- ----------
Income (loss) from continuing operations.....         86.3          (4.1)      (140.7)        90.4       136.6
Income (loss) from discontinued operations...          0.1          (2.1)        (1.3)         2.2        (0.8)
                                                ------------ ------------ ------------  -----------  ----------
Income (loss) before cumulative effect of
  accounting changes.........................         86.4          (6.2)      (142.0)        92.6       135.8
Cumulative effect of accounting changes......         --            --         (130.3)        --         130.3
Net income (loss)............................    $    86.4     $    (6.2)   $  (272.3)    $   92.6   $   266.1
                                                ============  ============ ============  =========== ==========

Earnings (loss) per share:
 Basic.......................................    $    0.91     $   (0.07)   $   (2.78)     $   0.98   $    2.71
                                                ============  ============ ============  =========== ===========
 Diluted.....................................    $    0.86     $   (0.07)   $   (2.78)     $   0.93   $    2.71
                                                ============  ============ ============  =========== ===========

Weighted-average common shares
  outstanding................................         94.7          94.2         97.9           0.5        (3.7)
                                                ============  ============ ============  =========== ===========

Weighted-average common shares outstanding
  and dilutive potential common shares.......        100.8          94.2         97.9           4.2        (1.3)
                                                ============  ============ ============  =========== ===========


                                                      40



Executive Overview and Outlook

Full year 2004 net income of $86.4 million, or $0.86 per diluted share, is substantially improved from 2003 net
loss of $6.2 million, or $0.07 per diluted share and 2002 net loss of $272.3 million, or $2.78 per share as a
result of higher operating earnings from our Life and Annuity and Asset Management businesses, higher net
investment gains and a lower effective tax rate, somewhat offset by lower earnings from venture capital in 2004
as compared to 2003, and a higher loss from Corporate and Other segment. Full year 2004 net income includes a
net $41.2 million after-tax gain on our equity investment in Aberdeen, a $6.4 million after-tax charge related
to the fourth quarter tender of $144.8 million in surplus notes, and net after-tax restructuring charges of
$21.9 million, principally related to severance and other transition costs related to the sale of our Life and
Annuity retail affiliated distribution operations and the outsourcing of our information technology
infrastructure to with Electronic Data Systems, or EDS. Full year 2003 net income includes a $55.0 million
after-tax charge for the impairment of our equity investment in Aberdeen and after-tax restructuring charges of
$8.5 million principally related to employee severance costs, while full year 2002 net income includes
after-tax restructuring charges of $28.5 million and a $192.6 million after-tax writedown of goodwill related
to the adoption of new accounting for goodwill and an impairment charge. Finally, full year 2004 results
include $12.9 million of realized investment losses related to CDOs consolidated by us under FIN 46(R), which
will reverse upon the maturity or other liquidation of the non-recourse collateralized obligations. Full year
2003 and 2002 results include a $2.4 million and $26.3 million, respectively, in realized losses related to
these CDOs consolidated under FIN 46(R).

Total segment income for 2004 of $80.6 million, or $0.80 per diluted share, is substantially improved from 2003
full year total segment income of $57.3 million, or $0.59 per diluted share, and 2002 total segment loss of
$60.4 million, or $0.62 per share, as a result of higher earnings in both the Life and Annuity and Asset
Management segments, somewhat offset by lower Venture Capital earnings in 2004 as compared to 2003 and a higher
Corporate and Other segment loss. Both the Life and Annuity and Asset Management businesses benefited in 2004
as compared to 2003 and 2002 from lower distribution, general and administrative expenses, and favorable equity
market conditions. Life and Annuity also benefited from continued strong fundamentals in its in-force block
characterized by favorable mortality, strong persistency and improved investment margins. Asset Management
experienced a sharp increase in net outflows in assets under management during 2004, principally the result of
continued poor product performance in certain of our equity strategies. Asset Management expense levels also
continue to reflect structural challenges related to our operations that are not wholly-owned, primarily Seneca
Capital Management LLC, or Seneca, and Kayne Anderson Rudnick.

We ended 2004 with in a strong financial position. Shareholders' equity grew to $2,022.4 million at December
31, 2004 compared to $1,947.8 million at December 31, 2003, Phoenix Life's statutory capital, surplus and AVR
of $1,028.2 million at December 31, 2004 is improved from the December 31, 2003 amount of $961.5 million,
Phoenix Life's risk-based capital, or RBC, is well above 300%, and Holding Company cash is $61.0 million at
December 31, 2004 compared to $22.8 million at the end of 2003. We also took steps to enhance our financial
flexibility. We closed on a tender offer for our 6.95% surplus notes scheduled to mature on December 1, 2006,
receiving valid tenders of $144.8 million of notes, and issued $175.0 million of 7.15% surplus notes maturing
December 15, 2034. We also entered into a new $150.0 million three-year, unsecured senior revolving credit
facility replacing the prior facility, which was to expire during the quarter. The five-year funding
requirements for our qualified pension plan improved from $107.8 million as of December 31, 2003 to $43.3
million as of December 31, 2004. Finally, we laid the groundwork to dispose of our two largest non-strategic
assets, Aberdeen and Lombard, which resulted in the receipt of net proceeds of nearly $130.0 million in January
2005 and brought closure to the issue of dispositions of non-strategic assets.

The benefits of many initiatives that we have implemented in recent years became increasingly apparent in 2004.
We have stabilized and strengthened the Company, significantly improved profitability, established a track
record of disciplined execution and built a solid foundation for growth. While earnings in Life and Annuity
have improved much more quickly than in Asset Management, we expect a stronger, better positioned Asset
Management business to emerge in 2005 as we continue to address structural, performance and profitability
challenges and begin to benefit from the expense initiatives we announced in the fourth quarter of 2004. A


                                                      41


number of significant accomplishments in 2004 contributed to our earnings improvement and position us well for
the future. Our exit from affiliated retail distribution operations is already generating significant savings,
and we are building back sales from formerly affiliated producers. The outsourcing of our information
technology infrastructure will produce meaningful savings beginning in 2005 and will also improve service. We
enhanced our financial flexibility through our two surplus notes transactions and our new three-year credit
facility. Operationally, we continued to implement "lean" manufacturing principles to improve product and
service quality, create capacity for higher business volumes, and enhance speed to market. We are moving
forward, focused intensely on growth in 2005.

The Life and Annuity segment had pre-tax income of $142.8 million in 2004, compared to $99.4 million in for
2003 and $80.3 million for 2002. The life insurance business had full-year 2004 pre-tax income of $134.5
million, compared to $103.5 million reported for 2003 and $101.0 million in 2002. The annuity business also
demonstrated improvement with pre-tax income of $8.3 million, up from a $4.1 million pre-tax loss in 2003 and a
$20.7 million pre-tax loss in 2002. Full-year 2004 earnings improvements in Life and Annuity reflect the
benefits of expense savings, particularly from the sale of our retail affiliated distribution operations, and
continued strong fundamentals including mortality, higher investment margins and persistency. Life insurance
and annuity sales and deposits fell short of our expectations and were well below 2003 and 2002 levels. Life
insurance sales were lower due to our decision to maintain pricing and risk management discipline, particularly
relating to the universal life contracts with low-priced no-lapse guarantees that prevailed in the market
throughout the year. In addition, sales decreased as anticipated after the sale of our affiliated retail
distribution operations to LPL during the second quarter and were slower to rebound than originally projected.
These factors were compounded by the longer-than-anticipated time to achieve ratings improvement, which the
company continues to pursue in 2005. The decrease in annuity deposits reflects our strategic decisions in the
fall of 2003 to discontinue sales of deferred fixed annuities, and to focus annuity wholesaling on select
distribution relationships, as well as the sale of our affiliated retail distribution operations in the second
quarter of 2004.

Looking forward, we are optimistic about our prospects for life and annuity sales in 2005 as we are building
the foundation for sustainable growth. We are focusing on three areas:

    •    First, we are rebuilding our product development capabilities. We added talented product development
         staff last year and used "lean" manufacturing principles to streamline the process. Senior management
         drives the product development process: vetting ideas, setting priorities and eliminating roadblocks.
         As a result, in 2005 we will improve our time to market, shorten the product development cycle and
         focus on a distinctive value proposition for our market. In life insurance, we have updates to our
         variable universal life portfolio and a new investment-oriented life product coming out in the spring.
    •    The second driver of sales growth in 2005 will be a 50% expansion of our distribution force to reach
         out more broadly in our existing relationships, particularly State Farm and LPL. The hiring process is
         under way, and a number of new wholesalers are on board already.
    •    And third, we have significant resources focused on establishing new strategic distribution
         relationships.

The Asset Management segment had pre-tax segment income of $0.1 million for 2004, compared with a $8.7 million
pre-tax loss in 2003 and a $69.9 million pre-tax loss in 2002. The improvement in 2004 results was driven by
higher revenues from higher average assets under management and lower general and administrative expenses,
partially offset by higher formulaic compensation expense, which is driven by higher investment product fee
revenues. December 31, 2004 assets under management for the segment were $42.9 billion, compared with $46.3
billion on December 31, 2003, although 2004 average assets under management were $44.9 billion as compared to
2003 and 2002 average assets under management of $42.9 billion and $45.5 billion, respectively. Full-year 2004
net flows were negative $6.6 billion (inflows of $6.7 billion; outflows of $13.3 billion), compared with
negative $1.2 billion in 2003 (inflows of $7.0 billion; outflows of $8.2 billion) and positive $0.6 billion
(inflows of $10.2 billion and outflows of $9.6 billion) in 2002. The 2004 full year negative net flows were
driven primarily by poor equity product performance, particularly at Kayne Anderson Rudnick and Seneca, and by
$1.7 billion of fixed income institutional redemptions in the year that were unrelated to performance. In
Seneca's case, the firm was put on hold or removed from several managed account programs


                                                      42


during the fourth quarter of 2004. These developments are likely to result in some additional outflows in 2005.
Fixed income products performed strongly, with positive net flows for the year, excluding the institutional
outflows noted above. Retail mutual fund sales rose by 12% for the full year, reflecting the strong fixed
income and specialty fund performance.

Asset Management achieved a higher operating margin in 2004 as compared to 2003 and 2002, but the business only
broke even and continued to have significant net outflows, although expense actions over the course of 2004
offset the consequent decline in revenues to some extent. We are focused on restructuring the asset management
business as this represents our largest opportunity for earnings growth in the near term. We are actively
working with our partners to address performance and structural issues in the context of our overall strategy.
As such, we have identified $17.0 million in additional annualized expense savings, which will begin to benefit
Asset Management earnings in 2005. A number of recent developments underscore the opportunity we have to
leverage some of our strong track records, especially in our fixed income and specialty strategies.

   •   The Goodwin Multi-Sector Short-Term Bond Fund was recognized as a five star fund by Morningstar. The
       Goodwin Fund also received an award from Lipper in 2004 for superior long-term performance and the
       Phoenix Mid-Cap Fund was similarly recognized early in 2005.
   •   Goodwin's institutional strategies also delivered another year of outstanding performance, beating their
       benchmarks over one, three, five and ten years.
   •   On the specialty side, the Duff & Phelps REIT fund has been a standout and we are successfully selling
       REIT strategies in the institutional market.
   •   The fixed income team at Seneca has a very strong track record across several fixed income strategies
       and has attracted institutional flows.
   •   In January 2005, we launched an open-end utility fund, which builds on our successful track record in
       utilities at Duff & Phelps.
   •   Effective April 1, 2005, two of our funds, the Phoenix Mid-Cap Value Fund and Phoenix-Kayne
       Small-Mid-Cap Fund will be on the platform of one of the largest 401K providers. This is a win both for
       our new institutional sales team and the investment teams of the funds.

In addition to the above, we have implemented an institutional strategy focused on leveraging existing core
strengths while building out the distribution infrastructure. On the retail side, we expect to implement a
sub-advisory strategy in mid-2005 to complement existing strengths with a focus towards the high-net-worth
market. These steps will not only help turn around flows but also lead to sustainable growth and a more
flexible, profitable business model.

The Venture Capital segment had 2004 pre-tax income of $19.3 million, compared with income of $36.2 million in
2003 and a loss of $59.3 million in 2002. The 2004 and 2003 results reflect generally favorable private equity
market conditions as compared to unfavorable market conditions experienced in 2002.

The Corporate and Other segment loss for 2004 of $59.1 million is higher than the 2003 and 2002 losses of $47.8
and $40.0 million, respectively. The full-year 2004 results reflect higher earnings from the company's
international operations offset by higher regulatory, compliance and corporate information technology costs and
lower corporate investment income. During 2003 and into 2004, we undertook a comprehensive review of our
internal control over financial reporting as required under Section 404 of The Sarbanes-Oxley Act of 2002,
which resulted in the dedication of more than 30,000 hours of internal management and staff time and nearly $4
million in incremental corporate expense for 2004. As noted in Item 9A this Annual Report on Form 10-K,
management has concluded that our internal control over financial reporting is effective as of December 31,
2004.

Our 2004 realized investment losses of $0.8 million (before offsets for deferred acquisition costs,
policyholder dividend obligation liability and taxes) compare to 2003 realized investment losses of $98.5
million and 2002 losses of $133.9 million. After offsets, realized investment losses were $7.2 million, $52.9
million and $65.6 million, respectively. Impairment losses, before offsets, of $49.5 million in 2004, are
significantly reduced from 2003 and 2002 impairment losses of $210.8 million and $186.7 million, respectively,
as a result of the

                                                      43


considerable improvement in credit market conditions since mid-2003. Impairment losses for 2004 include an
$11.6 million impairment ($6.7 million after-taxes) related to our investment in an Argentina affiliate, while
2003 impairments include an $89.1 million impairment ($55.0 million after-taxes) of our equity investment in
Aberdeen. Transaction gains, before offsets, of $48.7 million for 2004 compares with gains of $112.3 million in
2003 and $52.8 million in 2002. Transaction gains in 2003 include $35.3 million in pre-tax gains from the sale
of interests in two General Electric life insurance subsidiaries and in PXRE Group, Ltd.

2004 vs. 2003

Premium revenue decreased $51.6 million, or 5%, in 2004 from 2003, primarily due to a $51.1 million decrease in
participating life insurance premiums. Since our demutualization in 2001, we no longer sell participating life
policies, resulting in a decline in renewal participating life premiums. This decline in policies in force
results in a reduction of reserves, resulting in lower policyholder benefit costs.

Insurance and investment product fees increased $34.0 million, or 7%, in 2004 from 2003 primarily due to $12.6
million increase in Asset Management fees and a $18.5 million increase for Life and Annuity. Asset Management
private client and institutional investment product fees which are asset-based increased $9.8 million and $6.2
million, respectively as a result of increased assets under management. These increases were partially offset
by lower other investment product fees as a result of decreased volumes in equity trading by certain of our
clients, which resulted in lower commissions earned. Approximately 57% of our management fee revenues are based
on assets as of the beginning of a quarter, which causes the trend in fees to lag behind that of assets under
management. The increase in Life and Annuity revenues in 2004 is primarily due to higher universal life
insurance fees of $14.3 million, principally from cost of insurance, or COI, fees, and higher annuity fees
primarily due to higher fee-based funds on deposit. Corporate and Other fees decreased in 2004 due to the sale
of our India software services subsidiary.

Broker-dealer commission and distribution fee revenues decreased $24.6 million, or 30%, in 2004 from 2003, due
to the sale of our retail affiliated broker-dealer operations in May 2004. This decrease was partially offset
by a modest increase in broker-dealer commissions for Asset Management.

Net investment income decreased $31.7 million, or 3%, in 2004 from 2003, primarily due to lower venture capital
earnings, which reflected the effect of less than favorable equity market conditions in 2004 compared to 2003.
Mortgage loan income also declined in 2004 compared to 2003, reflecting the continued decline in mortgage loan
assets, as the portfolio continues to run-off. Income reflected in the other invested assets category increased
in 2004 compared to 2003, benefiting from higher investment income related to two direct equity investments.
This increase was partially offset by lower investment income from our debt securities pledged as collateral
related to our consolidated CDOs, which decreased $12.1 million from 2003, primarily due to decreased asset
levels from paydowns and defaults.

The $85.9 million unrealized gain on trading equity securities in 2004 relates to our investment in Aberdeen.
See Notes 1 and 5 to our consolidated financial statements in this Form 10-K for additional information.

Net realized investment losses decreased by $97.7 million, or 99%, in 2004 compared to 2003, due primarily to
significantly lower impairments in general account debt and equity securities as a result of the improved in
credit environment in 2004, offset by lower transaction-related gains. Realized losses from impairments on
general account debt securities decreased $60.6 million from 2003. Impairment losses in 2004 included $12.6
million in charges related to two international investments, while 2003 included a $96.9 million pre-tax charge
for the impairment of three international investments, $89.1 million of which related to the impairment of our
equity investment in Aberdeen.

                                                      44

Policyholder benefits, including dividends, decreased $45.9 million, or 2%, primarily due to lower benefits and
changes in policy reserves and policyholder dividends for participating life from a decline in renewal
premiums, as discussed above; lower interest credited from reduced crediting rates, principally from universal
life; and lower general account funds on deposit for annuities. These decreases were partially offset by a
larger increase in the policyholder dividend obligation, higher reserves for annuities and higher benefits for
universal life and variable universal life insurance. The increase in universal life and variable universal
life benefits was due to a large death claim, for universal life, in the first quarter of 2004 combined with
very favorable mortality for both lines of business in 2003.

Policy acquisition cost amortization increased $16.1 million, or 17%, in 2004 over 2003, due primarily to
higher amortization for annuities from higher gross margins, growth in funds on deposit and lower relative
performance in 2004. Amortization for variable universal life, universal life and term life increased modestly
as a result of growth in funds on deposit, or in-force policies, for term life. The effect of realized gains
(losses) on the amortization also contributed to the increase in 2004. These increases were partially offset by
modestly lower amortization for participating life.

Interest expense on non-recourse collateralized obligations decreased $15.3 million, or 31%, in 2004 from 2003
due primarily to decreased liabilities from paydowns.

Other operating expenses, which include non-deferrable policy acquisition costs, commissions due to
broker-dealer registered agents, finders fees, formulaic compensation related to asset management revenue
growth and other segment and administrative expenses, decreased $4.4 million, or 1%, in 2004 from 2003. The
decrease is principally due to a decrease of $55.9 million for Life and Annuity ($48.1 million after
elimination of inter-segment expenses), partially offset by increases in management restructuring and early
retirement costs of $23.2 million and surplus notes tender costs of $9.8 million in 2004. The Life and Annuity
expense decrease is primarily due to reductions resulting from the sale of our retail affiliated broker-dealer
operations in May 2004 and lower general and administrative and non-deferred expenses from expense reduction
initiatives. Asset Management expense increased modestly due to an increase in formulaic compensation expense
driven by higher investment management fees partially offset by the impact of expense reduction initiatives. In
addition, Corporate and Other operating expenses increased due primarily to higher regulatory compliance and
corporate information technology costs.

Income tax expense of $40.5 million in 2004 increased by $58.8 million from a tax benefit of $18.3 million in
2003. This increase is primarily due to the tax effect of the increase to income before continuing operations
before minority interest and equity earnings of affiliates.

2003 vs. 2002

Premium revenue decreased $39.8 million, or 4%, in 2003 from 2002, primarily due to a continued shift in sales
from participating life to universal life and variable universal life products as well as to a continued
decline of the participating life in-force business. Compared to 2002, 2003 premium revenue for participating
life policies decreased by $40.5 million. Since our 2001 demutualization, we no longer sell participating life
policies resulting in a decline in renewal participating life premiums and related in-force business.

Insurance and investment product fees increased by $7.1 million, or 1%, in 2003 over 2002, primarily due to
higher sales of universal life and variable life products, a growing in-force business in universal life and
variable universal life products and slightly higher surrender fees for variable universal life products. These
increases were partially offset by lower fees for our Asset Management segment resulting from decreases in both
private client and institutional average assets under management.

Broker-dealer commission and distribution fee revenues decreased $3.5 million, or 4%, in 2003 from 2002, due to
modest decreases for both Asset Management and Life and Annuity.

                                                      45


Net investment income increased by $166.9 million, or 18%, in 2003 over 2002, primarily due to improved equity
market conditions and the related effect on our earnings from our Venture Capital segment and to increased
general account spread-type funds on deposit in our Life and Annuity segment partially offset by the impact of
reinvesting maturities at lower interest rates. In addition, investment income from our debt securities pledged
as collateral related to our consolidated CDOs increased $21.2 million from 2002, primarily due to investment
income from the Mistic CDO which closed in the third quarter of 2002.

Net realized investment losses decreased $35.4 million, or 26%, in 2003 from 2002, primarily due to lower
impairments from improved credit market conditions including a $26.6 million reduction in impairment losses
related to debt securities pledged as collateral related to our consolidated and higher net transaction related
gains.

Policy benefits, including policyholder dividends, increased $34.9 million, or 2%, in 2003 over 2002, primarily
due to higher interest credited on guaranteed interest accounts, or GIAs, and fixed annuities from higher fund
account balances and higher mortality expense for universal life insurance. Policyholder dividend expense for
2003 was also higher compared to 2002, primarily due to growth in cash values of existing participating life
policies and the growth of our policyholder dividend obligation from favorable results, in part from the
portion of the venture capital funds transferred to the closed block in the first quarter of 2003.

Policy acquisition cost amortization increased $34.9 million, or 59%, in 2003 over 2002, primarily due to
higher amortization for participating life insurance and increased amortization for variable universal life and
annuities from the growth of in-force business and higher margins, partially offset by a $9.0 million
acceleration of amortization annuities related to a revision of long-term market return assumptions and a $4.5
million impairment charge in the third quarter of 2002.

There were no impairments of goodwill or intangible assets in 2003. In 2002, the $66.3 million impairment
related to goodwill for certain of our asset management partners.

Interest expense on indebtedness increased $8.2 million, or 26%, in 2003 over 2002, due to a restructuring of
debt in late 2002 through the issuance of equity units to paydown borrowings from a lower cost bank credit
facility.

Interest expense on non-recourse collateralized obligations increased $18.4 million, or 60%, in 2003 over 2002,
primarily due to interest expense from the Mistic CDO which closed in the third quarter of 2002.

Other operating expenses decreased $48.1 million, or 8%, in 2003 compared to 2002, primarily due to lower
management restructuring costs and lower overall operating expenses.

The income tax benefit of $18.3 million in 2003 decreased $40.5 million from an income tax benefit of $58.8
million in 2002. This decrease is primarily due to the tax effect of the decrease in loss from continuing
operations before income taxes, minority interest and equity earnings of affiliates offset by the tax effect of
non-deductible goodwill and indefinite-lived intangible assets written off in 2002.

Effects of Inflation

For the years 2004, 2003 and 2002, inflation did not have a material effect on our consolidated results of
operations.

Results of Operations by Segment

We evaluate segment performance on the basis of segment income. Realized investment gains and losses and
certain other items are excluded because we do not consider them when evaluating the financial performance of
the segments. The size and timing of realized investment gains and losses are often subject to our discretion.
Certain items are removed from segment after-tax income if, in our opinion, they are not indicative of overall
operating trends. While some of these items may be significant components of net income reported in accordance
with GAAP, we believe that segment income is an appropriate measure that represents the earnings attributable
to

                                                      46


the ongoing operations of the business. Investment income on debt and equity securities pledged as collateral
as well as interest expense on non-recourse collateralized obligations, both related to three consolidated
collateralized obligation trusts we sponsor, are included in the Corporate and Other segment. Excess investment
income on debt and equity securities pledged as collateral represents investment advisory fees earned by our
asset management subsidiary and are allocated to the Asset Management segment as investment product fees for
segment reporting purposes only. Also, all interest expense is included in the Corporate and Other segment, as
are several smaller subsidiaries and investment activities which do not meet the criteria of reportable
segments. These include our remaining international operations and the run-off of our group pension and
guaranteed investment contract businesses.

The criteria used to identify an item that will be excluded from segment income include: whether the item is
infrequent and is material to the segment's income; or whether it results from a business restructuring or a
change in the regulatory requirements, or relates to other unusual circumstances (e.g., non-routine
litigation). We include information on other items allocated to our segments in their respective notes for
information only. Items excluded from segment income may vary from period to period. Because these items are
excluded based on our discretion, inconsistencies in the application of our selection criteria may exist.
Segment income is not a substitute for net income determined in accordance with GAAP and may be different from
similarly titled measures of other companies.

Results of Operations by Segment                                              Year Ended December 31,
as Reconciled to Consolidated Net Income:                             ---------------------------------------
($ amounts in millions)                                                   2004          2003          2002
                                                                      -----------   -----------   -----------
Segment Income (Loss)
Life and annuity segment............................................   $   142.8     $    99.4     $    80.3
Asset management segment............................................         0.1          (8.7)        (69.9)
                                                                      -----------   -----------   -----------
Operating segment pre-tax income....................................       142.9          90.7          10.4
Venture capital segment.............................................        19.3          36.2         (59.3)
Corporate and other segment:
  Interest expense on indebtedness..................................       (40.8)        (39.6)        (31.4)
  Other.............................................................       (18.3)         (8.2)         (8.6)
                                                                      -----------   -----------   -----------
Total segment income (loss) before income taxes.....................       103.1          79.1         (88.9)
Applicable income taxes (benefit) ..................................        22.5          21.8         (28.5)
                                                                      -----------   -----------   -----------
Total segment income (loss).........................................        80.6          57.3         (60.4)
Income (loss) from discontinued operations..........................         0.1          (2.1)         (1.3)
Net realized investment gains (losses), net of income taxes and
  other offsets.....................................................        (7.2)          0.8         (65.6)
Unrealized gains (losses) on equity investment in Aberdeen..........        55.9         (55.0)         --
Share of Aberdeen extraordinary charge for FSA settlement...........       (14.7)         --            --
Restructuring and early retirement costs, net of income taxes.......       (21.9)         (8.5)        (28.5)
Surplus notes tender costs..........................................        (6.4)         --            --
Other income, net of income taxes...................................        --             1.3          --
Deferred acquisition cost adjustment, net of income taxes...........        --            --            15.1
Demutualization related items, net of income taxes..................        --            --            (1.3)
Cumulative effect of accounting changes, net of income taxes........        --            --          (130.3)
                                                                      -----------   -----------   -----------
Net income (loss)...................................................   $    86.4     $    (6.2)    $  (272.3)
                                                                      ===========   ===========   ===========

Total segment income return on equity is 4.1%, 3.0% and (2.9)% for 2004, 2003 and 2002, respectively. Total
segment return on equity is calculated as total segment income as a percentage of the average of beginning and
end of year adjusted stockholders' equity as follows:

                                                      47


Total Segment Return on Equity:                                     2004        2003        2002        2001
($ amounts in millions)                                         ----------- ----------- ------------ -----------
Stockholders' equity, end of year............................    $ 2,022.4   $ 1,947.8   $ 1,826.8    $ 2,307.8
Adjustments for:

  Accumulated other comprehensive (income) loss..............        (58.0)      (63.7)       71.5         (2.8)
  Accumulated realized losses in retained earnings
    related to consolidated collateralized obligation trusts.         54.1        41.2        38.8         12.5
  Stockholders' equity attributed to discontinued operations.        (23.0)      (28.2)      (30.4)       (23.6)
                                                                ----------- ----------- ------------ -----------
Adjusted stockholders' equity, end of year...................    $ 1,995.5   $ 1,897.1   $ 1,906.7    $ 2,293.9
                                                                =========== =========== ============ ===========
Adjusted stockholders' equity, average.......................      1,946.3     1,901.9     2,100.3
                                                                =========== =========== ============
Total segment income.........................................    $    80.6   $    57.3   $   (60.4)
                                                                =========== =========== ============
Total segment return on equity...............................          4.1%        3.0%       (2.9)%
                                                                =========== =========== ============

Segment Allocations

We allocate capital to our Life and Annuity segment based on RBC for our insurance products. We used 300% RBC
for 2002 through 2004. Capital within our Life Companies that is unallocated is included in our Corporate and
Other segment. We allocate capital to our Asset Management segment on the basis of the historical capital
within that segment. We allocate net investment income based on the assets allocated to the segments. We
allocate tax benefits related to tax-advantaged investments to the segment that holds the investment. We
allocate certain costs and expenses to the segments based on a review of the nature of the costs, time studies
and other methodologies.

Life and Annuity Segment

Summary Life and Annuity                                 Year Ended December 31,                  Changes
Financial Data:                                 -------------------------------------  ------------------------
($ amounts in millions)                             2004        2003       2002          2004/03       2003/02
Results of Operations                           -----------  -----------  -----------  -----------  -----------
Premiums..................................       $   990.6    $ 1,042.2    $ 1,082.0    $   (51.6)   $   (39.8)
Insurance and investment product fees.....           296.9        278.4        259.5         18.5         18.9
Broker-dealer commission and
  distribution fee revenues...............            28.8         54.6         55.6        (25.8)        (1.0)
Net investment income.....................           996.5        993.2        947.4          3.3         45.8
                                                -----------  -----------  -----------  -----------  -----------
Total segment revenues....................         2,312.8      2,368.4      2,344.5        (55.6)        23.9
                                                -----------  -----------  -----------  -----------  -----------
Policy benefits, including
  policyholder dividends..................         1,814.8      1,869.9      1,867.6        (55.1)         2.3
Policy acquisition cost amortization......           110.6         98.2         88.5         12.4          9.6
Other operating expenses..................           244.6        300.5        307.5        (55.9)        (6.9)
                                                -----------  -----------  -----------  -----------  -----------
Total segment benefits and expenses.......         2,170.0      2,268.6      2,263.6        (98.6)         5.0
                                                -----------  -----------  -----------  -----------  -----------
Segment income before income taxes
  and minority interest...................           142.8         99.8         80.9         43.0         18.9
Allocated income taxes....................            36.4         31.1         28.0          5.3          3.1
                                                -----------  -----------  -----------  -----------  -----------
Segment income before minority interest...           106.4         68.7         52.9         37.7         15.8
Minority interest in net income of
  consolidated subsidiaries...............            --            0.4          0.6         (0.4)        (0.2)
                                                -----------  -----------  -----------  -----------  -----------
Segment income............................           106.4         68.3         52.3         38.1         16.0
Net realized investment losses, net of
  income taxes and other offsets..........            (2.5)        (4.7)       (15.0)         2.2         10.3
Deferred acquisition cost adjustment,
  net of income taxes.....................            --           (1.3)        14.4          1.3        (15.7)
Other adjustments, net of income taxes....            (7.3)        --            0.7         (7.3)        (0.7)
                                                -----------  -----------  -----------  -----------  -----------
Segment net income........................       $    96.6    $    62.3    $    52.4    $    34.3    $     9.9
                                                ===========  ===========  ===========  ===========  ===========


                                                      48

2004 vs. 2003

Premium revenue decreased $51.6 million, or 5%, in 2004 from 2003, primarily due to a $51.1 million decrease in
participating life insurance premiums. Since our demutualization in 2001, we no longer sell participating life
policies, resulting in a decline in renewal participating life premiums. This decline in policies in force
results in a reduction of reserves, thereby lower policyholder benefit costs.

Insurance and investment product fees increased $18.5 million, or 7%, in 2004 over 2003, primarily due to
higher universal life insurance fees of $14.3 million, principally from COI fees and higher annuity fees
primarily due to higher fee-based funds on deposit.

Broker-dealer commission and distribution fee revenues decreased $25.8 million, or 47%, in 2004 from 2003, due
to the sale of our retail affiliated broker-dealer operations in May 2004.

Policy benefits and dividends decreased $55.1 million, or 3%, in 2004 from 2003, primarily due to lower
benefits and changes in policy reserves and policyholder dividends for participating life from a decline in
renewal premiums, as discussed above; lower interest credited from reduced crediting rates principally from
universal life; and lower general account funds on deposit for annuities. These decreases were partially offset
by higher reserves for annuities and higher benefits for universal life and variable universal life insurance,
as well as a larger increase in the policyholder dividend obligation. The increase in universal life and
variable universal life benefits was due to a large death claim, for universal life, in the first quarter of
2004 combined with very favorable mortality for both lines of business in 2003.

Policy acquisition cost amortization increased $12.4 million, or 13%, in 2004 compared to 2003, due primarily
to higher amortization for annuities from higher gross margins, growth in funds on deposit and lower relative
performance in 2004. Amortization for variable universal life, universal life and term life increased modestly
as a result of growth in funds under deposit, or in-force policies, for term life. These increases were
partially offset by modestly lower amortization for participating life.

Other operating expenses, which include non-deferrable policy acquisition costs, broker-dealer commissions due
to Griffith and Main Street registered agents and general and administrative costs, decreased $55.9 million, or
19% in 2004 from 2003. This decrease is principally due to lower broker-dealer commissions for Griffith and
Main Street registered agents, reduced operating expenses as a result of the sale of our retail affiliated
broker-dealer operations in May of 2004 and lower general and administrative non-deferred expenses as a result
of recent expense reduction initiatives.

Allocated income taxes increased by $5.3 million, or 17%, in 2004 compared to 2003 due to higher pre-tax
income, partially offset by tax benefits related to the favorable resolution of certain tax matters with the
IRS.

2003 vs. 2002

Premium revenue decreased by $39.8 million, or 4%, in 2003 from 2002, primarily due to a continued shift in
sales from participating life to universal life and variable universal life products as well as to a continued
decline of the participating life in-force business. Compared to the prior year, the 2003 premium revenue for
participating life insurance policies decreased by $40.5 million. Since our 2001 demutualization, we no longer
sell participating life policies, resulting in a decline in renewal participating life premiums and related
in-force policies.

Investment product fees increased by $18.9 million, or 7%, in 2003 over 2002, primarily due to higher sales in
universal life products, the growth of in-force business for universal life and variable universal life
products and slightly higher surrender fees for variable universal life products. Specifically, higher net
amounts at risk in these two lines of business, as well as higher sales of universal life products, resulted in
higher fees.

                                                      49

Net investment income increased by $45.8 million, or 5%, in 2003 over 2002, due to increased general account
spread-type funds, primarily annuities, partially offset by lower rates earned on invested assets.

Policy benefits, including policyholder dividends, were relatively flat in 2003 compared to 2002. This was
primarily due to a decrease in reserves for the participating life insurance driven by lower in-force block of
business and an $0.8 million decrease in our reserves for minimum death benefit guarantees due to favorable
equity markets, partially offset by higher interest credited on GIAs and fixed annuities driven by higher
average fund balances and higher mortality expense for universal life insurance.

Policy acquisition cost amortization increased $9.6 million, or 11%, in 2003 over 2002, primarily due to the
growth of in-force business, higher margins and slightly higher surrenders, partially offset by lower
amortization expense for annuities due to the charges incurred in the third quarter of 2002, which did not
recur in 2003.

Other operating expenses decreased $6.9 million, or 2%, in 2003 from 2002 as a result of generally lower
non-deferrable operating expenses, partially offset by higher employee benefit costs.

Minority interest expense relates to our subsidiary, PFG. We acquired the 33% of the minority interest in PFG
we did not already own in May 2003.

Allocated income taxes increased $3.1 million, or 11%, in 2003 over 2002 as a result of higher segment income
before income taxes as well as a current year allocation of the tax effects of tax advantaged investments to
the Life and Annuity segment.

                                                                                    Year Ended December 31,
Annuity Funds on Deposit:                                               ---------------------------------------
($ amounts in millions)                                                    2004          2003          2002
                                                                        -----------   -----------   -----------

Deposits..............................................................   $   670.9     $ 1,428.1     $ 2,258.4
Performance and interest credited.....................................       664.6         865.3        (338.0)
Fees..................................................................       (59.8)        (57.7)        (58.8)
Benefits and surrenders...............................................      (856.0)       (925.3)       (777.3)
                                                                        -----------   -----------   -----------
Change in funds on deposit............................................       419.7       1,310.4       1,084.3
Funds on deposit, beginning of period.................................     7,143.8       5,833.4       4,749.1
                                                                        -----------   -----------   -----------
Annuity funds on deposit, end of period...............................   $ 7,563.5     $ 7,143.8     $ 5,833.4
                                                                        ===========   ===========   ===========


                                                                                    Year Ended December 31,
Variable Universal Life Funds on Deposit:                               ---------------------------------------
($ amounts in millions)                                                    2004          2003          2002
                                                                        -----------   -----------   -----------

Deposits..............................................................   $   245.4     $   353.4     $   465.7
Performance and interest credited.....................................       179.3         252.1        (149.8)
Fees and cost of insurance............................................      (103.0)       (106.2)       (102.2)
Benefits and surrenders...............................................       (77.5)        (70.8)        (39.4)
                                                                        -----------   -----------   -----------
Change in funds on deposit............................................       244.2         428.5         174.3
Funds on deposit, beginning of period.................................     1,698.8       1,270.3       1,096.0
                                                                        -----------   -----------   -----------
Variable universal life funds on deposit, end of period...............   $ 1,943.0     $ 1,698.8     $ 1,270.3
                                                                        ===========   ===========   ===========

                                                      50


                                                                               Year Ended December 31,
Universal Life Funds on Deposit:                                        ---------------------------------------
($ amounts in millions)                                                    2004          2003          2002
                                                                        -----------   -----------   -----------

Deposits..............................................................   $   229.4     $   217.8     $   149.3
Interest credited.....................................................        74.6          78.0          85.8
Fees and cost of insurance............................................      (114.2)       (103.8)        (88.3)
Benefits and surrenders...............................................      (143.1)       (138.0)       (132.4)
                                                                        -----------   -----------   -----------
Change in funds on deposit............................................        46.7          54.0          14.4
Funds on deposit, beginning of period.................................     1,564.0       1,510.0       1,495.6
                                                                        -----------   -----------   -----------
Universal life funds on deposit, end of period.......................    $ 1,610.7     $ 1,564.0     $ 1,510.0
                                                                        ===========   ===========   ===========

2004 vs 2003

Annuity, variable universal life and universal life funds on deposit experienced growth in 2004 as a result of
positive net flows for variable universal life and universal life blocks and the effects of favorable equity
markets on variable annuity and variable universal life funds on deposit.

Life insurance and annuity sales and deposits fell short of our expectations and were at levels well below 2003
levels due to the following factors.

   •   Sale of retail affiliated broker-dealer operations. All producers associated with Griffith and Main
       Street had to go through the complex process of changing broker-dealers. The effort required strained
       our relationships with some of these advisors and distracted others from writing new business. We
       underestimated the amount of time needed to recover and rebuild momentum, particularly as it related to
       the fourth quarter, which had historically been a time of significant sales.
   •   Our decision not to compete with aggressive secondary no-lapse guarantees in universal life. We have
       seen evidence suggesting that industry sales growth was fueled by products with secondary guarantees
       priced at levels we do not view to be profitable.
   •   The compounding impact of our ratings. Ratings improvement is a key priority for us. Despite significant
       improvement in our profitability and risk profile, as well as our strong capital and liquidity, the
       rating agencies have not yet responded favorably.

2003 vs. 2002

Annuity products 2003 deposits declined to $1.4 billion in 2003 from $2.3 billion in 2002 as the result of the
forth quarter 2002 decision to terminate sales of Retirement Planners Edge, or RPE, coupled with the forth
quarter 2003 decision to exit certain unprofitable distribution relationships and a decision to terminate sales
of fixed annuities.

Annuity and variable universal life funds under deposit benefited from strong performance of underlying funds
due to favorable equity markets in 2003 as compared to 2002.

Variable universal life deposits in 2003 decreased and universal life deposits increase as compared to 2002
amounts as variable universal life product sales shifted to universal life products due to volatile equity
markets.


                                                      51


                                                           As of December 31,                  Changes
Life and Annuity Segment Revenues               -------------------------------------  ------------------------
By Product:                                         2004         2003        2002        2004/03      2003/02
($ amounts in millions)                         -----------  -----------  -----------  -----------  -----------
Variable universal life insurance............    $   117.1    $   114.8    $   109.2    $     2.3    $     5.6
Universal life insurance.....................        213.4        196.9        195.8         16.5          1.1
Term life insurance..........................         15.9         14.6         12.2          1.3          2.4
Other life insurance.........................        123.4        148.2        146.3        (24.8)         1.9
                                                -----------  -----------  -----------  -----------  -----------
Total, non-participating life insurance......        469.8        474.5        463.5         (4.7)        11.0
Participating life insurance.................      1,627.1      1,690.1      1,718.9        (63.0)       (28.8)
                                                -----------  -----------  -----------  -----------  -----------
Total, life insurance........................      2,096.9      2,164.6      2,182.4        (67.7)       (17.8)
Annuities....................................        215.9        203.8        162.1         12.1         41.7
                                                -----------  -----------  -----------  -----------  -----------
Segment revenues.............................    $ 2,312.8    $ 2,368.4    $ 2,344.5    $   (55.6)   $    23.9
                                                ===========  ===========  ===========  ===========  ===========

2004 vs. 2003

Variable universal life insurance revenue increased $2.3 million, or 2%, in 2004 over 2003, due primarily to
higher COI fees from the growth of in-force business, partially offset by lower fees due to lower premium
deposits.

Universal life insurance revenue increased $16.5 million, or 8%, in 2004 over 2003, primarily due to higher COI
fees from the growth of in-force business, higher fees from higher premium deposits and slightly higher
investment earnings from higher funds on deposit.

Term life insurance revenue increased $1.3 million, or 9%, in 2004 over 2003, primarily due to higher premiums
from the growth of in-force policies and modestly higher investment earnings.

Other life insurance revenue decreased $24.8 million, or 17%, in 2004 from 2003, due primarily to lower
broker-dealer commission and distribution fee revenues resulting from the sale of our retail affiliated
broker-dealer operations in May 2004, offset by a modest increase in investment earnings, primarily related to
an old block of corporate-owned life insurance.

Participating life insurance revenue decreased $63.0 million, or 4%, in 2004 from 2003, due to lower renewal
premiums and net investment income. Since our demutualization in 2001, we no longer sell participating life
insurance policies.

Annuity revenue increased $12.1 million, or 6%, in 2004 over 2003, primarily due to higher investment earnings
from improved spreads and fees from increased fee-based funds on deposit.

2003 vs. 2002

Variable universal life product revenues increased $5.6 million, or 5%, in 2003 over 2002, primarily due to
higher COI fees from the growth of in-force business, and higher surrender charges, partially offset by
slightly lower sales and lower interest earned.

Universal life product revenues increased $1.1 million, or less than 1%, in 2003 over 2002, primarily due to
higher COI and other fees from higher sales and the growth of in-force business, offset by lower interest
earned.

Term life revenues increased $2.4 million, or 20%, in 2003 over 2002, due to premium growth from higher sales.

Other life insurance revenues increased $1.9 million, or 1%, in 2003 over 2002, primarily due to higher revenue
in an old block of corporate-owned life insurance business and from higher investment income, partially offset
by lower revenues in non-life insurance subsidiaries.

                                                      52


Participating life product revenues decreased $28.8 million, or 2%, in 2003 from 2002, primarily due to lower
renewal premiums, partially offset by higher net investment income. Since our demutualization in 2001, we no
longer sell participating life insurance policies.

Annuity product revenues increased $41.7 million, or 26%, in 2003 compared to 2002, primarily due to higher
fees from improved equity market performance and to an increase in interest earned on higher spread based asset
products. Earlier in 2004, we extended the duration of interests underlying our RPE annuity block to better
align the investment portfolio with actual lapse experience. This extension strategy contributed to higher
investment earnings for this block as compared to 2003.

                                                       Year Ended December 31,                Changes
Segment Income by Product:                      ------------------------------------  -----------------------
($ amounts in millions)                            2004         2003       2002        2004/03     2003/02
                                                -----------  ----------- -----------  ----------- -----------

Variable universal life insurance............    $    35.7    $    35.0   $    35.9    $     0.7   $    (0.9)
Universal life insurance.....................         34.4         21.7        26.3         12.7        (4.6)
Term life insurance..........................          3.4          3.8         4.7         (0.4)       (0.9)
Other life insurance.........................         16.0          6.9         0.8          9.1         6.1
                                                -----------  ----------- -----------  ----------- -----------
Total, non-participating life insurance......         89.5         67.4        67.7         22.1        (0.3)
Participating life insurance.................         45.0         36.1        33.3          8.9         2.8
                                                -----------  ----------- -----------  ----------- -----------
Total, life insurance........................        134.5        103.5       101.0         31.0         2.5
Annuities....................................          8.3         (4.1)      (20.7)        12.4        16.6
                                                -----------  ----------- -----------  ----------- -----------
Segment income before income taxes...........    $   142.8    $    99.4   $    80.3    $    43.4   $    19.1
                                                ===========  =========== ===========  =========== ===========

2004 vs. 2003

Variable universal life pre-tax income increased $0.7 million, or 2%, in 2004 over 2003, primarily due to
reduced expenses from lower sales and expense reduction initiatives combined with higher revenues, as discussed
above. These increases were partially offset by higher benefit costs and slightly higher deferred acquisition
cost amortization in 2004.

Universal life pre-tax income increased $12.7 million, or 59%, in 2004 over 2003, primarily due to higher
revenues, as discussed above, lower interest credited from reduced crediting rates and lower general and
administrative expenses. These increases were partially offset by higher benefit costs resulting from a large
death claim in the first quarter of 2004, combined with very favorable mortality in 2003, which did not recur
in 2004.

Other pre-tax income increased $9.1 million, or 132%, in 2004 over 2003, due primarily to higher investment
earnings, principally from an old block of corporate-owned life insurance, plus a premium received on a bond
investment.

Participating life pre-tax income increased $8.9 million, or 25%, in 2004 over 2003, primarily due to lower
general and administrative expenses. Because operating expenses are excluded for the closed block, such
operating expense savings inure to the benefit of shareholders. The decrease in revenues, as discussed above,
are largely offset by lower benefits, changes in reserves and dividends to policyholders.

Annuity pre-tax income increased to $8.3 million in 2004 from a loss of $4.1 million in 2003, due primarily to
higher revenues, as discussed above, lower interest credited from lower general account funds on deposit and
reduced expenses from lower sales and expense reduction initiatives, partially offset by higher deferred
acquisition cost amortization from higher gross margins, growth in funds on deposit, lower relative performance
in 2004 and slightly higher benefit costs.

                                                      53


2003 vs. 2002

Variable universal life product pre-tax income decreased $0.9 million, or 3%, in 2003 from 2002. The decrease
can be attributed to lower sales, higher amortization of deferred acquisition costs and higher non-deferrable
expenses, partially offset by favorable insurance margins and higher surrender charges.

Universal life product pre-tax income decreased $4.6 million, or 17%, in 2003 over 2002, due to lower insurance
margins and surrender charges, partially offset by higher investment margins and lower expenses.

Term product pre-tax income decreased $0.9 million, or 19%, in 2003 from 2002, primarily due to slightly higher
expense levels partially offset by higher insurance margins.

Other life insurance pre-tax income increased $6.1 million in 2003 from 2002, due to favorable mortality in an
old block of corporate-owned life insurance business, the release of a reserve on a life contingent annuity due
to the death of the annuitant and higher income from certain non-life insurance subsidiaries.

Participating life product pre-tax income increased $2.8 million, or 8%, in 2003 over 2002, primarily due to a
one-time investment gain during the second quarter of 2003 and lower non-deferrable expenses, partially offset
by higher deferred acquisition cost amortization and the release of a policyholder tax contingency in 2002 that
did not recur in 2003.

Annuity product pre-tax loss was $16.6 million, or 80%, less in 2003 compared to 2002. This was primarily due
to lower amortization of deferred acquisition costs in 2003, a decrease in minimum guaranteed death benefits
expense in 2003, and higher investment margins from higher spread type funds on deposit. These were partially
offset by higher non-deferrable expenses and commissions as well as further spread compression in 2003.
Amortization of deferred acquisition costs was lower in 2003, due to acceleration of amortization from a
revision of long-term market return assumptions and an impairment charge in 2002, neither of which recurred in
2003.

See Note 3 to our consolidated financial statements in this Form 10-K for more information.

                                                      54


Asset Management Segment

                                                      Year Ended December 31,                Changes
Summary Asset Management                        ------------------------------------  -----------------------
Financial Data:                                     2004         2003       2002        2004/03     2003/02
($ amounts in millions)                         -----------  ----------- -----------  ----------- -----------
Results of Operations
Investment product fees......................    $   237.9    $   225.3   $   238.6    $    12.6   $   (13.3)
Broker-dealer commission and
  distribution fee revenues..................         28.0         26.8        29.5          1.2        (2.7)
Net investment income........................          0.8          0.7         1.0          0.1        (0.3)
                                                -----------  ----------- -----------  ----------- -----------
Total segment revenues.......................        266.7        252.8       269.1         13.9       (16.3)
                                                -----------  ----------- -----------  ----------- -----------
Intangible asset amortization................         33.8         33.2        32.5          0.6         0.7
Intangible asset impairments.................         --           --          66.3         --         (66.3)
Other operating expenses.....................        232.8        228.3       240.2          4.5       (11.9)
                                                -----------  ----------- -----------  ----------- -----------
Total segment expenses.......................        266.6        261.5       339.0          5.1       (77.5)
                                                -----------  ----------- -----------  ----------- -----------
Segment income (loss) before income taxes....          0.1         (8.7)      (69.9)         8.8        61.2
Allocated income taxes (benefit).............          2.3         (3.3)       (6.0)         5.6         2.7
                                                -----------  ----------- -----------  ----------- -----------
Segment loss.................................         (2.2)        (5.4)      (63.9)         3.2        58.5
Net realized investment gains (losses).......          1.8         (0.3)       --            2.1        (0.3)
Restructuring and other costs, net of
  income taxes...............................         (1.2)        (4.0)       (8.4)         2.8         4.4
Cumulative effect of accounting change.......         --           --        (119.9)        --         119.9
                                                -----------  ----------- -----------  ----------- -----------
Segment net loss.............................    $    (1.6)   $    (9.7)  $  (192.2)   $     8.1   $   182.5
                                                ===========  =========== ===========  =========== ===========

Our investment product fee revenues are based on assets under management. Approximately 57% of our investment
product fees are based on beginning of quarter assets under management while the remaining 43% are based on end
of day balances. End of year and average assets (based on how fees are calculated) under management follow:

Assets Under Management:                                                As of or for the Year Ended
($ amounts in millions)                                                         December 31,
                                                                ---------------------------------------------
                                                                     2004            2003           2002
                                                                --------------  -------------- --------------

End of year...................................................   $  42,908.5     $  46,260.5    $  41,835.3
                                                                ==============  ============== ==============
Average (based on how fees are calculated)....................   $  44,904.6     $  42,900.2    $  45,534.5
                                                                ==============  ============== ==============

2004 vs. 2003

Investment product fees increased $12.6 million, or 6%, in 2004 over 2003. This increase was primarily due to
an increase in average assets under management compared to the prior year. Private client and institutional
investment product fees increased $9.8 million and $6.2 million, respectively, as a result of the increase in
average assets under management. Other investment product fees decreased $1.7 million due to decreased volumes
in equity trading by certain of our clients, which resulted in fewer commissions earned. Approximately 57% of
our management fee revenues are based on assets as of the beginning of a quarter, which causes the trend in fee
revenues to lag behind that of assets under management.

Assets under management were $42.9 billion and $46.3 billion at December 31, 2004 and 2003, respectively. The
decrease in assets under management during 2004 is due primarily to customer withdrawals of $13.3 billion for
the year. Sales of private client products in 2004 were $3.9 billion, which is a decrease of 2% from 2003. The
majority of this decline is due to reduced sales of sponsored managed accounts at Seneca and Kayne Anderson
Rudnick. Redemptions of private client products in 2004 were $7.5 billion, which is an increase of 60% from
2003. This increase is primarily related to the loss of sponsored managed accounts at Seneca. Sales of
institutional accounts in 2004 were $2.7 billion, which is an 8% decrease from 2003. Redemptions of
institutional accounts in 2004 were $5.6 billion, which is an increase of 67% from 2003. Of the institutional
redemptions, $1.7 billion were not performance related.

                                                      55


There were no impairments of goodwill or other intangible assets in 2004 and 2003. The $66.3 million charge in
2002 was associated with the impairment of goodwill related to certain of our asset management partners.

Other operating expenses increased $2.2 million, or 1%, in 2004 over 2003, primarily due to an increase in
formulaic compensation expense, which is driven by higher investment product fee revenues. Increases in
compensation expense were offset, in part, by lower general and administrative expenses, primarily related to a
decrease in information technology costs.

Allocated income tax expense increased $5.6 million in 2004 over 2003 as a result of segment income in 2004
compared to segment losses in 2003 and additional state taxes allocated to the Asset Management segment.

2003 vs. 2002

Investment product fees decreased $13.3 million, or 6%, in 2003 from 2002. This decrease was primarily due to
the decrease in average assets under management compared to the prior year. Private client and institutional
investment product fees decreased $8.9 million and $6.5 million, respectively, as a result of the decrease in
average assets under management. Approximately 56% of our management fee revenues are based on assets as of the
beginning of a quarter, which causes fee revenues to lag behind changes in average assets under management.

Assets under management were $46.3 billion and $41.8 billion at December 31, 2003 and 2002, respectively. The
increase in assets under management during 2003 is due primarily to positive investment performance of $5.8
billion for the year. Sales of private client products in 2003 were $4.1 billion, which is a decrease of 29%
from 2002. The majority of this decline is due to reduced sales of sponsored managed accounts at Seneca and
Kayne Anderson Rudnick. Redemptions of private client products in 2003 were $4.9 billion, which is a decrease
of 11% from 2002. This improvement was primarily a result of lower redemptions for mutual funds. Sales of
institutional accounts in 2003 were $3.0 billion, which is a 32% decrease from 2002. The decrease in sales is
due to the fact that 2002 included the issuance of a $1.0 billion CDO, which we consolidate in our financial
statements, that did not recur in 2003. Redemptions of institutional accounts in 2003 were $3.5 billion, which
is a decrease of 22% from 2002. The majority of the improvement in redemptions was attributable to Seneca.

There were no impairments of goodwill or other intangible assets in 2003. The $66.3 million charge in 2002 was
associated with the impairment of goodwill related to certain of our asset management partners.

Other operating expenses decreased $12.0 million, or 5%, in 2003 compared to 2002, of which $5.3 million
related to compensation expense and $5.5 million related to lower non-compensation related operating expenses.
The decrease in non-compensation related operating expenses was primarily the result of lower professional,
rent, depreciation, and travel related charges offset, in part, by increased computer services charges.

Allocated income tax benefits decreased $2.7 million, or 45%, from the comparable period in 2002 as a result of
lower segment losses offset by the impact of non-deductible asset impairments in the prior year.

See Note 4 to our consolidated financial statements in this Form 10-K for more information.

                                                      56


Venture Capital Segment

Our venture capital investments are limited partnership interests in venture capital funds, leveraged buyout
funds and other private equity partnerships sponsored and managed by third parties. We record our investments
in venture capital partnerships in accordance with the equity method of accounting. (See Venture Capital
Partnerships in the Critical Accounting Estimates section of Management's Discussion and Analysis of Financial
Condition and Results of Operations.) Venture capital investments are investments of the general account of
Phoenix Life.

During 2003, we sold a 50% interest in certain of our venture capital partnerships to an outside party and
transferred the remaining 50% interest in those partnerships to our closed block. The carrying value of the
partnerships sold and transferred totaled $52.2 million after realizing a loss of $19.4 million ($5.1 million
recorded in 2002 and $14.3 million recorded in 2003). The unfunded commitments of the partnerships sold and
transferred totaled $27.2 million; the outside party and the closed block will each fund half of these
commitments. At the time of transfer, the partnerships transferred constituted less than 0.5% of the assets of
the closed block.

                                                       Year Ended December 31,                Changes
Summary Venture Capital Financial Data:         ------------------------------------  -----------------------
($ amounts in millions)                            2004         2003        2002        2004/03     2003/02
                                                -----------  ----------- -----------  ----------- -----------
Results of Operations
Net realized gains (losses) on partnership
  cash and stock distributions...............    $     7.4    $     4.9   $    (4.7)   $     2.5   $     9.6
Net unrealized gains (losses) on
  partnership investments....................         13.6         37.1       (47.2)       (23.5)       84.3
Partnership operating expenses...............         (1.7)        (5.8)       (7.4)         4.1         1.6
                                                -----------  ----------- -----------  ----------- -----------
Segment net investment income (loss).........         19.3         36.2       (59.3)       (16.9)       95.5
Applicable income taxes (benefit)............          6.8         12.7       (20.7)        (5.9)       33.4
                                                -----------  ----------- -----------  ----------- -----------
Segment net income (loss)....................    $    12.5    $    23.5   $   (38.6)   $   (11.0)  $    62.1
                                                ===========  =========== ===========  =========== ===========

2004 vs. 2003

Net investment income decreased $16.9 million in 2004 from 2003, due primarily to less favorable equity market
conditions in 2004 as compared to 2003.

Our accounting methodology recognizes both downward and upward adjustments based on public market indices, but
when the general partner writes down the value of a private investee company, we do not override the most
recent value reported by the general partner by applying the public sector index in excess of the most recent
value reported by the general partner. Finally, we revise the valuations we have assigned to the investee
companies annually to reflect the valuations in the audited financial statements received from the venture
capital partnerships. As a result, the effect of our adjusting estimated partnership results to actual results
increased investment income by $7.8 million, $33.4 million and $12.8 million in 2004, 2003 and 2002,
respectively.

Adjustments to the valuation of these companies to reflect reported valuations in the audited financial
statements received from the venture capital partnerships will be reflected in our financial statements when
received in the first and second quarters of 2005.

2003 vs. 2002

Net investment income increased $95.5 million in 2003 over 2002 due to overall improved equity market
conditions and the true-up to the partnerships' audited fourth quarter of 2002 financial statements from
estimated amounts as of December 31, 2002.

                                                      57


                                                        Year Ended December 31,               Changes
Changes in Venture Capital Investments:         ------------------------------------  -----------------------
($ amounts in millions)                            2004          2003        2002       2004/03     2003/02
                                                -----------  ----------- -----------  ----------- -----------

Contributions (dollars invested).............    $    37.7    $    31.0   $    42.2    $     6.7   $   (11.2)
Equity in earnings of partnerships...........         19.3         36.2       (59.3)       (16.9)       95.5
Distributions................................        (50.4)       (32.2)      (41.7)       (18.2)        9.5
Proceeds from sale of partnership interests
  and transfer to closed block...............         --          (52.2)       --           52.2       (52.2)
Realized loss on sale of partnership interests
  and transfer to closed block...............         --          (14.3)       (5.1)        14.3        (9.2)
                                                -----------  ----------- -----------  ----------- -----------
Change in venture capital investments........          6.6        (31.5)      (63.9)        38.1        32.4
Venture capital segment investments,
  beginning of period........................        196.3        227.8       291.7        (31.5)      (63.9)
                                                -----------  ----------- -----------  ----------- -----------
Venture capital segment investments,
  end of period..............................    $   202.9    $   196.3   $    227.8   $     6.6   $   (31.5)
                                                ===========  =========== ===========  =========== ===========

2004 vs, 2003

Venture capital investments for 2004 increased $38.1 million over the change for 2003, primarily due to
proceeds from, and realized losses on, the sale of partnership interests and transfer to the closed block in
2003, which reduced the venture capital balance by $66.5 million. This change was partially offset by a
decrease in equity in earnings of $16.9 million and higher distributions, which increased $18.2 million over
2003.

2003 vs. 2002

Venture capital investments for 2003 increased $32.4 million over the change for 2002, primarily due to $36.2
million in equity in earnings in 2003 compared to equity in losses of $59.3 million in 2002. This $95.5 million
improvement in equity in earnings in 2003 was partially offset by proceeds from, and realized losses on, the
sale of partnership interests and transfer to the closed block in 2003, which totaled $66.5 million.

                                                                                     As of December 31,
Segment Investments in Venture Capital Partnerships                             -----------------------------
($ amounts in millions)                                                             2004           2003
                                                                                -------------- --------------

Technology...................................................................    $      26.9    $      36.8
Telecommunications...........................................................            7.9           13.3
Biotechnology................................................................            8.6           16.3
Health care..................................................................            6.7            8.2
Consumer and business products and services..................................           29.7           29.6
Financial services...........................................................           20.7           28.5
Other........................................................................           57.3           44.9
                                                                                -------------- --------------
Private holdings.............................................................          157.8          177.6
Public holdings..............................................................           20.7           11.3
Cash and cash equivalents....................................................            8.8            5.5
Other........................................................................           15.6            1.9
                                                                                -------------- --------------
Venture capital partnerships.................................................    $     202.9    $     196.3
                                                                                ============== ==============

Unfunded commitments.........................................................    $      53.5    $      76.7
                                                                                ============== ==============

See Note 5 to our consolidated financial statements in this Form 10-K for more information regarding our
Venture Capital segment.

                                                      58


Corporate and Other Segment

                                                         Year Ended December 31,             Changes
Summary Corporate and Other                     ------------------------------------  -----------------------
Financial Data:                                     2004         2003       2002        2004/03     2003/02
($ amounts in millions)                         -----------  ----------- -----------  ----------- -----------
Results of Operations
Corporate investment income..................    $     0.4    $     4.3   $     1.5    $    (3.9)  $     2.8
Investment income from
  collateralized obligations.................         40.1         52.2        31.0        (12.1)       21.2
Interest expense on indebtedness.............        (40.8)       (39.6)      (31.4)        (1.2)       (8.2)
Interest expense on non-recourse
  collateralized obligations.................        (33.6)       (48.9)      (30.5)        15.3       (18.4)
Corporate expenses...........................        (18.9)       (11.0)      (10.4)        (7.9)       (0.6)
International................................          3.7         (1.4)        4.2          5.1        (5.6)
Other........................................        (10.0)        (3.4)       (4.4)        (6.6)        1.0
                                                -----------  ----------- -----------  ----------- -----------
Segment loss, before income taxes............        (59.1)       (47.8)      (40.0)       (11.3)       (7.8)
Allocated income tax (benefit)...............        (22.9)       (18.8)      (29.8)        (4.1)       11.0
                                                -----------  ----------- -----------  ----------- -----------
Segment loss.................................    $   (36.2)   $   (29.0)  $   (10.2)   $    (7.2)  $   (18.8)
                                                ===========  =========== ===========  =========== ===========

2004 vs. 2003

Investment income from debt and equity securities pledged as collateral related to our CDOs decreased $12.1
million in 2004 from 2003, due primarily to decreased asset levels from paydowns and defaults. Consequently,
lower distributions were made to investment holders resulting in a $15.3 million decrease in interest expense
on non-recourse collateralized obligations during 2004.

Corporate expenses increased $7.9 million in 2004 over 2003, primarily due to increases in liability insurance
costs, incremental regulatory compliance and audit costs associated with Section 404 of The Sarbanes-Oxley Act
of 2002 and higher information technology costs.

International income increased $5.1 million in 2004 over 2003 due primarily to higher earnings from an
Argentine affiliate combined with lower losses from our India software services affiliate, which was sold in
2004.

Other results decreased $6.6 million in 2004 from 2003, due primarily to losses in a small group pension
run-off block, lower investment earnings, slightly higher employee benefit costs and higher administrative
expenses related to the CDOs.

2003 vs. 2002

Investment income from debt and equity securities pledged as collateral related to our consolidated CDOs
increased $21.2 million, or 68%, in 2003 over 2002, primarily from earnings from the Mistic CDO which closed in
the third quarter of 2002.

Interest expense on indebtedness increased $8.2 million, or 26%, in 2003 over 2002, primarily due to a
restructuring of debt in late 2002 through the issuance of equity units to paydown shorter term, lower cost
borrowings under our bank credit facility.

Interest expense on non-recourse collateralized obligations increased $18.4 million, or 60%, in 2003 over 2002,
primarily due to interest expense from the Mistic CDO which closed in the third quarter of 2002.

Corporate expenses were relatively level for 2003 compared to 2002. Expenses increased $7.2 million for costs
related to the stock purchase contracts issued in 2002, but this was offset by lower unallocated corporate
expenses.

                                                      59


International results decreased $5.6 million in 2003 from 2002, due primarily to lower equity in earnings from
Aberdeen.

The loss in other improved $1.0 million in 2003 over 2002, due primarily to lower losses from non-core
operations offset by slightly higher expenses related to debt and equity securities pledged as collateral
related to our consolidated CDOs of $2.8 million.

General Account

The invested assets in the Life Companies' general accounts are generally of high quality and broadly
diversified across asset classes, sectors and individual credits and issuers. Our investment professionals
manage these general account assets in investment segments that support specific product liabilities. These
investment segments have distinct investment policies that are structured to support the financial
characteristics of the related liabilities within them. Segmentation of assets allows us to manage the risks
and measure returns on capital for our various businesses and products.

Separate Accounts

Separate account assets are managed in accordance with the specific investment contracts and guidelines
relating to our variable products. We generally do not bear any investment risk on assets held in separate
accounts. Rather, we receive investment management fees based on assets under management. Assets held in
separate accounts are not available to satisfy general account obligations.

Debt and Equity Securities Pledged as Collateral and Non-recourse Collateralized Obligations

Investments pledged as collateral trusts are assets held for the benefit of those institutional clients which
have investments in structured bond products offered and managed by our asset management subsidiary.

See Note 8 to our consolidated financial statements in this Form 10-K for more information.

Enterprise Risk Management

During 2003, we implemented a comprehensive, enterprise-wide risk management program. Early in 2004 we
appointed a Chief Risk Officer, reporting to the Chief Financial Officer, to oversee all of our risk management
activities. We have established an Enterprise Risk Management Committee, chaired by the Chief Executive
Officer, to ensure our risk management principles are followed and our objectives are accomplished. In
addition, we have established several management committees overseeing and addressing issues pertaining to all
our major risks—product, market and operations—and capital management.

Operational Risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems
or from external events. We have established an Operational Risk Committee, chaired by the Chief Risk Officer,
to develop an enterprise-wide framework for managing and measuring operational risks. This committee meets
monthly and has a membership that represents all significant operating, financial and staff departments of the
company.

                                                      60


Market Risk

Market risk is the risk that we will incur losses due to adverse changes in market rates and prices. We have
exposure to market risk through both our investment activities and our insurance operations. Our investment
objective is to maximize after-tax investment return within defined risk parameters. Our primary sources of
investment risk are:

     •   interest rate risk, which relates to the market price and cash flow variability associated with
         changes in market interest rates;
     •   credit risk, which relates to the uncertainty associated with the ongoing ability of an obligor to
         make timely payments of principal and interest; and
     •   equity risk, which relates to the volatility of prices for equity and equity-like investments, such as
         venture capital partnerships.

We measure, manage and monitor market risk associated with our insurance and annuity business, as part of our
ongoing commitment to fund insurance liabilities. We have developed an integrated process for managing the
interaction between product features and market risk. This process involves our Corporate Finance, Corporate
Portfolio Management, Life and Annuity Finance, and Life and Annuity Product Development departments. These
areas coordinate with each other and report results and make recommendations to our Asset-Liability Management
Committee, or ALCO, chaired by the Chief Financial Officer.

We also measure, manage and monitor market risk associated with our general account investments, both backing
insurance liabilities and supporting surplus. This process involves Corporate Portfolio Management and Goodwin,
our Hartford-based asset management affiliate. These organizations work together, make recommendations and
report results to our Investment Policy Committee, chaired by the Chief Investment Officer. Please refer to the
sections that follow, including "Debt and Equity Securities Held in General Account", for more information on
our investment risk exposures. We regularly refine our policies and procedures to appropriately balance market
risk exposure and expected return.

Interest Rate Risk Management

Interest rate risk is the risk that we will incur economic losses due to adverse changes in interest rates. Our
exposure to interest rate changes primarily results from our commitment to fund interest-sensitive insurance
liabilities, as well as from our significant holdings of fixed rate investments. Our insurance liabilities
largely comprise dividend-paying individual whole life and universal life policies and annuity contracts. Our
fixed maturity investments include U.S. and foreign government bonds, securities issued by government agencies,
corporate bonds, asset-backed securities, mortgage-backed securities and mortgage loans, most of which are
mainly exposed to changes in medium-term and long-term U.S. Treasury rates.

We manage interest rate risk as part of our asset-liability management and product development processes.
Asset-liability management strategies include the segmentation of investments by product line and the
construction of investment portfolios designed to satisfy the projected cash needs of the underlying product
liability. All asset-liability strategies are approved by the ALCO. We manage the interest rate risk in
portfolio segments by modeling and analyzing asset and product liability durations and projected cash flows
under a number of interest rate scenarios.

One of the key measures we use to quantify this interest rate exposure is duration, as a measure of the
sensitivity of the fair value of assets and liabilities to changes in interest rates. For example, if interest
rates increase by 100 basis points, or 1%, the fair value of an asset with a duration of five years is expected
to decrease by 5%. We believe that as of December 31, 2004, our asset and liability portfolio durations were
well matched, especially for our largest and most interest-sensitive segments. Since our insurance products
have variable interest rates (which expose us to the risk of interest rate fluctuations), we regularly
undertake a sensitivity analysis that calculates liability durations under various cash flow scenarios.

                                                      61


The selection of a 100 basis point immediate, parallel increase or decrease in interest rates is a hypothetical
rate scenario used to demonstrate potential risk. While a 100 basis point immediate, parallel increase or
decrease does not represent our view of future market changes, it is a reasonably possible hypothetical
near-term change that illustrates the potential impact of such events. Although these fair value measurements
provide a representation of interest rate sensitivity, they are based on our portfolio exposures at a point in
time and may not be representative of future market results. These exposures will change as a result of
on-going portfolio transactions in response to new business, management's assessment of changing market
conditions and available investment opportunities.

To calculate duration, we project asset and liability cash flows and discount them to a net present value using
a risk-free market rate adjusted for credit quality, sector attributes, liquidity and any other relevant
specific risks. Duration is calculated by revaluing these cash flows at an alternative level of interest rates
and by determining the percentage change in fair value from the base case.

We also manage interest rate risk by emphasizing the purchase of securities that feature prepayment
restrictions and call protection. Our product design and pricing strategies include the use of surrender
charges or restrictions on withdrawals in some products.

The table below shows the estimated interest rate sensitivity of our fixed income financial instruments
measured in terms of fair value. Given that our asset and liability portfolio durations were well matched for
the periods indicated, we would expect market value gains or losses in assets to be largely offset by
corresponding changes in liabilities.

                                                                           As of December 31, 2004
Interest Rate Sensitivity of Fixed Income                  ----------------------------------------------------
Financial Instruments:                                                   -100 Basis                 +100 Basis
($ amounts in millions)                                      Carrying       Point                      Point
                                                               Value       Change      Fair Value     Change
                                                           ------------ ------------  ------------ ------------

Cash and cash equivalents...............................    $    435.0   $    435.3    $    435.0   $    434.7
Available-for-sale debt securities......................      13,476.3     14,138.2      13,476.3     12,814.8
Mortgage loans..........................................         207.9        225.9         220.4        214.9
                                                           ------------ ------------  ------------ ------------
Subtotal................................................      14,119.2     14,799.4      14,131.7     13,464.4
Debt and equity securities pledged as collateral........       1,278.8      1,335.4       1,278.8      1,221.9
                                                           ------------ ------------  ------------ ------------
Totals..................................................    $ 15,398.0   $ 16,134.8    $ 15,410.5   $ 14,686.3
                                                           ============ ============  ============ ============

We use derivative financial instruments, primarily interest rate swaps, to manage our residual exposure to
fluctuations in interest rates. We enter into derivative contracts with a number of highly rated financial
institutions, to both diversify and reduce overall counterparty credit risk exposure.

We enter into interest rate swap agreements to reduce market risks from changes in interest rates. We do not
enter into interest rate swap agreements for trading purposes. Under interest rate swap agreements, we exchange
cash flows with another party at specified intervals for a set length of time based on a specified notional
principal amount. Typically, one of the cash flow streams is based on a fixed interest rate set at the
inception of the contract and the other is based on a variable rate that periodically resets. Generally, no
premium is paid to enter into the contract and neither party makes payment of principal. The amounts to be
received or paid on these swap agreements are accrued and recognized in net investment income.

The table below shows the interest rate sensitivity of our general account interest rate derivatives measured
in terms of fair value. These exposures will change as our insurance liabilities are created and discharged and
as a result of ongoing portfolio and risk management activities.

                                                      62




Interest Rate Sensitivity of Derivatives:                          As of December 31, 2004
($ amounts in millions)                         ---------------------------------------------------------------
                                                              Weighted-     -100                      +100
                                                               Average      Basis                     Basis
                                                 Notional       Term        Point                     Point
                                                  Amount       (Years)      Change     Fair Value     Change
                                                -----------  -----------  -----------  -----------  -----------

Interest rate swaps..........................    $   540.0          9.4    $    20.1    $    13.3    $     6.6
Other........................................         50.0          3.5         --            0.1          0.3
                                                -----------               -----------  -----------  -----------
Totals - general account.....................    $   590.0                 $    20.1    $    13.4    $     6.9
                                                ===========               ===========  ===========  ===========
Non-recourse interest rate swaps
  held in consolidated CDOs..................    $ 1,118.2          4.8    $   143.5    $   101.8    $    61.3
                                                ===========  ===========  ===========  ===========  ===========

See Note 9 to our consolidated financial statements in this Form 10-K for more information on derivative
instruments.

In 1999, we began selling RPE, a no-load variable annuity. RPE was designed to attract contributions into
variable sub-accounts on which we earn mortality and expense fees. However, the bulk of the funds were
allocated to GIAs, which offered a 3% guaranteed interest rate. We anticipated the liabilities would be of a
short duration and with the low level of interest rates, we were unable to invest funds at a rate that
guaranteed a spread that covered commissions and interest credited. In September 2002, we stopped accepting
applications for RPE, although existing policyholders have the right to make subsequent cumulative gross
deposits up to $1 million per contract.

Annuity Deposit Fund Balances:                                                            As of December 31,
($ amounts in millions)                                                                ------------------------
                                                                                          2004         2003
                                                                                       -----------  -----------
Policyholder Deposit Funds
Retirement Planners Edge GIAs........................................................   $ 1,121.4    $ 1,209.4
Other variable annuity GIAs..........................................................       817.7        858.0
                                                                                       -----------  -----------
Variable annuity GIAs................................................................     1,939.1      2,067.4
Fixed annuities......................................................................     1,038.2      1,056.9
                                                                                       -----------  -----------
Total variable annuity GIAs and fixed annuities......................................   $ 2,977.3    $ 3,124.3
                                                                                       ===========  ===========

The funds in the RPE GIAs decreased by $88.0 million during 2004. We believe most contract holders currently
view RPE as an attractive alternative to money market investments and, absent a spike in money market rates,
this business is likely to run off slowly.

Because experience has shown that the duration of the RPE liabilities is longer than we had previously assumed,
beginning in the second quarter of 2004 we extended the duration of the assets. This has enhanced operating
income to the point where this product essentially breaks even.

Credit Risk Management

We manage credit risk through the fundamental analysis of the underlying obligors, issuers and transaction
structures. Through Goodwin, our Hartford-based asset management affiliate, we employ a staff of experienced
credit analysts who review obligors' management, competitive position, cash flow, coverage ratios, liquidity
and other key financial and non-financial information. These analysts recommend the investments needed to fund
our liabilities while adhering to diversification and credit rating guidelines. In addition, when investing in
private debt securities, we rely upon broad access to management information, negotiated protective covenants,
call protection features and collateral protection. We review our debt security portfolio regularly to monitor
the performance of obligors and assess the stability of their current credit ratings.

                                                      63

We also manage credit risk through industry and issuer diversification and asset allocation. Maximum exposure
to an issuer or derivatives counterparty is defined by quality ratings, with higher quality issuers having
larger exposure limits. We have an overall limit on below investment-grade rated issuer exposure.

Equity Risk Management

Equity risk is the risk that we will incur economic losses due to adverse changes in equity prices. Our
exposure to changes in equity prices primarily results from our commitment to fund our variable annuity and
variable life products, as well as from our holdings of common stocks, mutual funds and other equities. We
manage our insurance liability risks on an integrated basis with other risks through our liability and risk
management and capital and other asset allocation strategies. We also manage equity price risk through industry
and issuer diversification and asset allocation techniques. We held $391.6 million in equity securities,
including $87.3 million in trading equity securities, on our balance sheet as of December 31, 2004. A 10%
decline or increase in the relevant equity price would have decreased or increased, respectively, the value of
these assets by approximately $39.2 million as of December 31, 2004.

Certain annuity products sold by our Life Companies contain guaranteed minimum death benefits. The guaranteed
minimum death benefit feature provides annuity contract holders with a guarantee that the benefit received at
death will be no less than a prescribed amount. This minimum amount is based on the net deposits paid into the
contract, the net deposits accumulated at a specified rate, the highest historical account value on a contract
anniversary, or more typically, the greatest of these values. To the extent that the guaranteed minimum death
benefit is higher than the current account value at the time of death, the company incurs a cost. This
typically results in an increase in annuity policy benefits in periods of declining financial markets and in
periods of stable financial markets following a decline. As of December 31, 2004 and 2003, the difference
between the guaranteed minimum death benefit and the current account value (net amount at risk) for all
existing contracts was $123.5 and $183.1 million, respectively. This is our exposure to loss should all of our
contractholders have died on either December 31, 2004 or December 31, 2003.

Guaranteed Minimum Death Benefit Exposure:                                                2004         2003
($ amounts in millions)                                                                -----------  -----------

Net amount at risk on minimum guaranteed death benefits (before reinsurance).........   $   441.1    $   616.9
Net amount at risk reinsured.........................................................      (317.6)      (433.8)
                                                                                       -----------  -----------
Net amount at risk on minimum guaranteed death benefits (after reinsurance)..........   $   123.5    $   183.1
                                                                                       ===========  ===========

Weighted-average age of contractholder...............................................      61           61
                                                                                       ===========  ===========


Payments Related to Guaranteed Minimum Death Benefits,                           Year Ended December 31,
Net of Reinsurance Recoveries:                                            -------------------------------------
($ amounts in millions)                                                       2004        2003         2002
                                                                          -----------  -----------  -----------

Death claims payments before reinsurance...............................    $     5.4    $     7.7    $     8.6
Reinsurance recoveries.................................................         (3.0)        (5.1)        (6.4)
                                                                          -----------  -----------  -----------
Net death claims payments..............................................    $     2.4    $     2.6    $     2.2
                                                                          ===========  ===========  ===========

We establish a reserve for guaranteed minimum death benefits using a methodology consistent with the AICPA SOP
No. 03-01, Accounting and Reporting by Insurance Enterprises for Certain Non-traditional Long Duration
Contracts and for Separate Accounts. This reserve is determined using the net amount at risk taking into
account estimates for mortality, equity market returns, and voluntary terminations under a wide range of
scenarios at December 31, 2004 and 2003.

                                                      64

Reserves Related to Guaranteed Minimum Death Benefits,                                    As of December 31,
Net of Reinsurance Recoverables:                                                       ------------------------
($ amounts in millions)                                                                  2004           2003
                                                                                       -----------  -----------

Statutory reserve (after reinsurance)...............................................    $    15.0    $    17.3
GAAP reserve (after reinsurance)....................................................          9.1          7.6

We also provide reserves for guaranteed minimum income benefits and guaranteed payout annuity floor benefits.
The statutory reserves for these totaled $2.3 million and $2.0 million at December 31, 2004 and 2003,
respectively. The GAAP reserves for these totaled $1.6 million and $0.4 million at December 31, 2004 and 2003,
respectively.

Interest Rate Sensitivity of Deferred Policy Acquisition Cost Asset and          As of December 31, 2004
Guaranteed Minimum Death Benefit Liability:                               -------------------------------------
($ amounts in millions)                                                      -10%                      + 10%
                                                                            Equity      Carrying      Equity
                                                                            Market        Value       Market
                                                                          -----------  -----------  -----------

Deferred policy acquisition costs (variable annuities)...................  $   283.0    $   286.0    $   289.3
Deferred policy acquisition costs (variable universal life)..............      325.2        326.4        327.0
Guaranteed minimum death benefit liability (variable annuities)..........       12.1          9.1          7.1

See Note 3 to our consolidated financial statements in this Form 10-K for more information regarding deferred
policy acquisition costs.

Certain annuity products sold by our Life Companies contain guaranteed minimum living benefits. These include
guaranteed minimum accumulation and income benefits. We have established a hedging program for managing the
risk associated with our new guaranteed minimum accumulation benefit feature. As of December 31, 2004, sales of
that benefit had not yet created a significant enough exposure to meet our requirement for executing a
derivative transaction under that hedge program. We continue to analyze and refine our strategies for managing
risk exposures associated with all our separate account guarantees.

We sponsor defined benefit pension plans for our employees. For GAAP accounting purposes, we assumed an 8.5%
long-term rate of return on plan assets in the most recent valuations, performed as of September 30, 2004, May
31, 2004 and January 1, 2004. To the extent there are deviations in actual returns, there will be changes in
our projected expense and funding requirements. As of December 31, 2004, the projected benefit obligation for
our defined benefit plans was in excess of plan assets by $237.2 million. We expect to contribute $43.3 million
to the employee pension plan through 2009, including $6.5 million during 2005. As of May 31, 2004 we revalued
our employee benefit assets and liabilities in connection with the sale of our retail affiliated broker-dealer
operations. As a result of the revaluation, we recognized a net curtailment gain of $6.8 million ($4.4 million
after taxes). In addition, as of September 30, 2004 we revalued our employee benefit assets and liabilities in
connection with employee terminations associated with the information technology services agreement EDS. As a
result of this revaluation, we recognized an additional net curtailment gain of $1.6 million ($1.1 million
after taxes) for the year ended December 31, 2004. For the estimated 2004 contribution, quarterly payments of
$2.5 million each were made to the pension plan in April, July and October 2004. In September 2004, we made a
payment of $1.6 million, related to the 2003 minimum contribution. See Note 11 to our consolidated financial
statements in this Form 10-K for more information on our employee benefit plans.

Foreign Currency Exchange Risk Management

Foreign currency exchange risk is the risk that we will incur economic losses due to adverse changes in foreign
currency exchange rates. Our functional currency is the U.S. dollar. Our exposure to fluctuations in foreign
exchange rates against the U.S. dollar results from our holdings in non-U.S. dollar-denominated debt and equity
securities which is not material to our consolidated financial statements at December 31, 2004.

                                                      65

Debt and Equity Securities Held in General Account

Our general account debt securities portfolio consists primarily of investment-grade publicly traded and
privately placed corporate bonds, residential mortgage-backed securities, commercial mortgage-backed securities
and asset-backed securities. As of December 31, 2004, our general account debt securities, with a carrying
value of $13,476.3 million, represented 79.7% of total general account investments. Public debt securities
represented 77.9% of total debt securities, with the remaining 22.1% represented by private debt securities.

We consolidate debt and equity securities on our consolidated balance sheet that are pledged as collateral for
the settlement of collateralized obligation liabilities related to three collateralized obligation trusts which
we sponsor. See Note 8 of our consolidated financial statements in this Form 10-K for additional information on
these debt and equity securities pledged as collateral.

Each year, the majority of our general account's net cash flows are invested in investment grade debt
securities. In addition, we maintain a portfolio allocation of between 6% and 10% of debt securities in below
investment grade rated bonds. Allocations are based on our assessment of relative value and the likelihood of
enhancing risk-adjusted portfolio returns. The size of our allocation to below investment grade bonds is also
constrained by the size of our net worth. We are subject to the risk that the issuers of the debt securities we
own may default on principal and interest payments, particularly in the event of a major economic downturn. Our
investment strategy has been to invest the majority of our below investment grade rated bond exposure in the BB
rating category, which is equivalent to a Securities Valuation Office, or SVO, securities rating of 3. The BB
rating category is the highest quality tier within the below investment grade universe, and BB rated securities
historically experienced lower defaults compared to B or CCC rated bonds. As of December 31, 2004, our total
below investment grade securities totaled $1,074.1 million, or 8.0%, of our total debt security portfolio. Of
that amount, $814.6 million, or 6.1%, of our debt security portfolio was invested in the BB category. Our debt
securities having an increased risk of default (those securities with an SVO rating of four or greater which is
equivalent to B or below) totaled $259.5 million, or 1.9%, of our total debt security portfolio.

Our general account debt and equity securities are classified as available-for-sale and are reported at fair
value with unrealized gains or losses included in equity. Accordingly, the carrying value of such securities
reflects their fair value at the balance sheet date. Fair value is based on quoted market price, where
available. When quoted market prices are not available, we estimate fair value for debt securities by
discounting projected cash flows based on market interest rates currently being offered on similar terms to
borrowers of similar credit quality, by quoted market prices of comparable instruments and by independent
pricing sources or internally developed pricing models. Investments whose value, in our judgment, is considered
to be other-than-temporarily impaired are written down to fair value as a charge to realized losses included in
our earnings. The cost basis of these written-down investments is adjusted to fair value at the date the
determination of impairment is made. The new cost basis is not changed for subsequent recoveries in value.


                                                      66

General Account Debt Securities
at Fair Value:                                                  As of December 31,
($ amounts in millions)            ----------------------------------------------------------------------------
                                     Total Debt Securities    Public Debt Securities    Private Debt Securities
                                         (Fair Value)              (Fair Value)              (Fair Value)
  SVO          S&P Equivalent      ------------------------  ------------------------  ------------------------
 Rating         Designation           2004         2003         2004         2003         2004         2003
- --------  -----------------------  -----------  -----------  -----------  -----------  -----------  -----------

   1      AAA/AA/A.............     $ 8,668.9    $ 8,821.2    $ 7,123.2    $ 7,442.1    $ 1,545.7    $ 1,379.1
   2      BBB..................       3,733.3      3,350.8      2,493.6      2,160.6      1,239.7      1,190.2
                                   -----------  -----------  -----------  -----------  -----------  -----------
     Total investment grade          12,402.2     12,172.0      9,616.8      9,602.7      2,785.4      2,569.3
   3      BB...................         814.6        764.9        698.6        635.5        116.0        129.4
   4      B....................         150.9        218.9         97.3        157.8         53.6         61.1
   5      CCC and lower........          68.9         94.6         51.1         53.7         17.8         40.9
   6      In or near default...          39.7         22.6         36.1         19.0          3.6          3.6
                                   -----------  -----------  -----------  -----------  -----------  -----------
     Total debt securities          $13,476.3    $13,273.0    $10,499.9    $10,468.7    $ 2,976.4    $ 2,804.3
                                   ===========  ===========  ===========  ===========  ===========  ===========


General Account Debt Securities                                    As of December 31, 2004
by Investment Type:                          ------------------------------------------------------------------
($ amounts in millions)                                                         Unrealized Gains (Losses)
                                                                          -------------------------------------
                                                   Fair                      Gross       Gross
                                                   Value        Cost         Gains       Losses         Net
                                                -----------  -----------  -----------  -----------  -----------

United States government and agency..........    $   679.1    $   625.4    $    55.4    $    (1.7)   $    53.7
State and political subdivision..............        446.5        413.7         34.4         (1.6)        32.8
Foreign government...........................        314.8        284.0         31.1         (0.3)        30.8
Corporate....................................      7,365.4      7,040.7        364.2        (39.5)       324.7
Mortgage-backed..............................      3,253.4      3,122.9        137.0         (6.5)       130.5
Other asset-backed...........................      1,417.1      1,405.0         32.4        (20.3)        12.1
                                                -----------  -----------  -----------  -----------  -----------
Total debt securities........................    $13,476.3    $12,891.7    $   654.5    $   (69.9)   $   584.6
                                                ===========  ===========  ===========  ===========  ===========
Debt securities outside closed block:
    Unrealized gains.........................    $ 4,534.7    $ 4,339.7    $   195.0    $    --      $   195.0
    Unrealized losses........................      1,992.0      2,036.8          --         (44.8)       (44.8)
                                                -----------  -----------  -----------  -----------  -----------
    Total outside the closed block...........      6,526.7      6,376.5        195.0        (44.8)       150.2
                                                -----------  -----------  -----------  -----------  -----------
Debt securities in closed block:
    Unrealized gains.........................      5,913.8      5,454.3        459.5         --          459.5
    Unrealized losses........................      1,035.8      1,060.9          --         (25.1)       (25.1)
                                                -----------  -----------  -----------  -----------  -----------
    Total in the closed block................      6,949.6      6,515.2        459.5        (25.1)       434.4
                                                -----------  -----------  -----------  -----------  -----------
Total debt securities........................    $13,476.3    $12,891.7    $   654.5    $   (69.9)   $   584.6
                                                ===========  ===========  ===========  ===========  ===========


Debt Securities by Type and Credit Quality:                                As of December 31, 2004
($ amounts in millions)                                      --------------------------------------------------
                                                                 Investment Grade       Below Investment Grade
                                                             ------------------------  ------------------------
                                                             Fair Value      Cost      Fair Value      Cost
                                                             -----------  -----------  -----------  -----------

United States government and agency........................   $   679.1    $   625.4    $    --      $    --
State and political subdivision............................       446.5        413.7         --           --
Foreign government.........................................       194.9        175.9        119.9        108.1
Corporate..................................................     6,630.3      6,337.9        735.1        702.8
Mortgage-backed............................................     3,195.4      3,073.6         58.0         49.3
Other asset-backed.........................................     1,256.0      1,230.0        161.1        175.0
                                                             -----------  -----------  -----------  -----------
Total debt securities......................................   $12,402.2    $11,856.5    $ 1,074.1    $ 1,035.2
                                                             ===========  ===========  ===========  ===========

Percentage of total debt securities........................        92.0%        92.0%         8.0%         8.0%
                                                             ===========  ===========  ===========  ===========

                                                      67

Investment Grade Debt Securities at Fair Value:                                   As of December 31, 2004
($ amounts in millions)                                                   -------------------------------------
                                                                             Total      AAA/AA/A        BBB
                                                                          -----------  -----------  -----------

United States government and agency......................................  $   679.1    $   679.1    $    --
State and political subdivision..........................................      446.5        432.9         13.6
Foreign government.......................................................      194.9         91.3        103.6
Corporate................................................................    6,630.3      3,478.6      3,151.7
Mortgage-backed..........................................................    3,195.4      3,037.8        157.6
Other asset-backed.......................................................    1,256.0        949.2        306.8
                                                                          -----------  -----------  -----------
Total debt securities....................................................  $12,402.2    $ 8,668.9    $ 3,733.3
                                                                          ===========  ===========  ===========

Percentage of total debt securities......................................       92.0%        64.3%        27.7%
                                                                          ===========  ===========  ===========


Below Investment Grade                                              As of December 31, 2004
Debt Securities at Fair Value:                  ---------------------------------------------------------------
($ amounts in millions)                                                                   CC or     In or Near
                                                   Total         BB            B          Lower       Default
                                                -----------  -----------  -----------  -----------  -----------

Foreign government...........................    $   119.9    $   114.5    $     5.4    $     --     $     --
Corporate....................................        735.1        587.5        117.7         21.7          8.2
Mortgage-backed..............................         58.0         58.0          --           --           --
Other asset-backed...........................        161.1         54.6         27.8         47.2         31.5
                                                -----------  -----------  -----------  -----------  -----------
Total debt securities........................    $ 1,074.1    $   814.6    $   150.9    $    68.9    $    39.7
                                                ===========  ===========  ===========  ===========  ===========

Percentage of total debt securities..........          8.0%         6.1%         1.1%         0.5%         0.3%
                                                ===========  ===========  ===========  ===========  ===========

We manage credit risk through industry and issuer diversification. Maximum exposure to an issuer is defined by
quality ratings, with higher quality issuers having larger exposure limits. Our investment approach has been to
create a high level of industry diversification. The top five industry holdings as of December 31, 2004 in our
debt securities portfolio are banking (4.98%), insurance (3.35%), electrical utilities (3.06%), diversified
financial services (2.54%), and publishing, broadcasting, printing and cable (2.25%).

Our corporate debt security exposure to recently troubled industries, including telecommunications equipment,
telephone utilities, airlines, media, publishing and broadcasting, comprises 5.1% of our debt securities
portfolio at December 31, 2004. In addition, within the asset-backed securities sector, securitized aircraft
receivable securities comprise approximately 1.0% of our debt securities portfolio, with less than one-third of
that exposure rated below investment grade at December 31, 2004.

The following table presents certain information with respect to realized investment gains and losses including
those on debt securities pledged as collateral, with losses from other-than-temporary impairment charges
reported separately in the table. These impairment charges were determined based on our assessment of factors
enumerated below, as they pertain to the individual securities determined to be other-than-temporarily
impaired.


                                                      68

Sources of Realized Investment Gains (Losses):                                    Year Ended December 31,
($ amounts in millions)                                                   -------------------------------------
                                                                              2004         2003         2002
                                                                          -----------  -----------  -----------

Debt security impairments..............................................    $   (15.5)   $   (76.1)   $  (114.3)
Equity security impairments............................................         (1.5)        (4.3)        (9.8)
Mortgage loan impairments..............................................          --          (4.1)        (0.6)
Venture capital partnership impairments................................          --          (4.6)        (5.1)
Affiliate equity security impairments..................................        (12.6)       (96.9)         --
Other invested asset impairments.......................................         (3.3)       (16.5)       (22.0)
Debt and equity securities pledged as collateral impairments...........        (16.6)        (8.3)       (34.9)
                                                                          -----------  -----------  -----------
Impairment losses......................................................        (49.5)      (210.8)      (186.7)
                                                                          -----------  -----------  -----------
Debt security transaction gains........................................         39.0         93.7         94.3
Debt security transaction losses.......................................        (10.6)       (29.0)       (45.9)
Equity security transaction gains......................................         17.7         58.8         24.5
Equity security transaction losses.....................................         (3.1)        (9.6)       (22.4)
Mortgage loan transaction gains (losses)...............................          0.2         (1.3)         0.2
Venture capital partnership transaction losses.........................          --          (9.7)         --
Other invested asset transaction gains.................................          5.5          9.4          2.1
                                                                          -----------  -----------  -----------
Net transaction gains..................................................         48.7        112.3         52.8
                                                                          -----------  -----------  -----------
Net realized investment losses.........................................    $    (0.8)   $   (98.5)   $  (133.9)
                                                                          -----------  -----------  -----------

Net realized investment losses.........................................    $    (0.8)   $   (98.5)   $  (133.9)
                                                                          -----------  -----------  -----------
Applicable closed block policyholder dividend obligation (reduction)...          3.7         (5.9)       (40.3)
Applicable deferred policy acquisition costs (benefit).................         (0.4)        (4.1)        (7.2)
Applicable deferred income tax expense (benefit).......................          3.1        (35.6)       (20.8)
                                                                          -----------  -----------  -----------
Offsets to realized investment losses..................................          6.4        (45.6)       (68.3)
                                                                          -----------  -----------  -----------
Net realized investment losses included in net income..................    $    (7.2)   $   (52.9)   $   (65.6)
                                                                          ===========  ===========  ===========

Realized impairment losses on debt and equity securities pledged as collateral relating to our direct
investments in the consolidated collateralized obligation trusts are $3.7 million, $5.9 million and $8.6
million for 2004, 2003 and 2002, respectively.

Impairment losses of $49.5 million in 2004 are substantially improved as compared to 2003 and 2002 as a result
of a significant improvement in the credit environment in late 2003 into 2004. Impairment losses in 2004
include $12.6 million in non-cash charges related to two international affiliates, and 2003 includes a
writedown of an equity interest in affiliates of $96.9 million ($89.1 million of which relates to Aberdeen).
Transaction gains of $48.7 million in 2004 are significantly lower than 2003 transaction gains of $112.3
million and modestly lower than 2002 transaction gains of $52.8 million. Transaction gains in 2003 include
realized gains of $35.3 million related to our sale of equity investments in PXRE and certain GE Life &
Annuity subsidiaries. See Notes 1 and 5 to our consolidated financial statements in this Form 10-K for
additional information.

                                                      69

Gross and Net Unrealized                                        As of December 31, 2004
Gains (Losses):                         -----------------------------------------------------------------------
($ amounts in millions)                           Total           Outside Closed Block        Closed Block
                                        ----------------------- ----------------------- -----------------------
                                           Gains      Losses       Gains      Losses       Gains      Losses
                                        ----------- ----------- ----------- ----------- ----------- -----------
Debt Securities
Unrealized gains (losses)...........     $   654.5   $   (69.9)  $   195.0   $   (44.8)  $   459.5   $   (25.1)
                                        ----------- ----------- ----------- ----------- ----------- -----------
Applicable policyholder dividend
  obligation (reduction)............         459.5       (25.1)        --          --        459.5       (25.1)
Applicable deferred policy
  acquisition costs (benefit).......         100.3       (16.5)      100.3       (16.5)        --          --
Applicable deferred income
  taxes (benefit)...................          33.1        (9.9)       33.1        (9.9)        --          --
                                        ----------- ----------- ----------- ----------- ----------- -----------
Offsets to net unrealized
  gains (losses)....................         592.9       (51.5)      133.4       (26.4)      459.5       (25.1)
                                        ----------- ----------- ----------- ----------- ----------- -----------
Unrealized gains (losses)
  after offsets.....................     $    61.6   $   (18.4)  $    61.6   $   (18.4)  $     --    $     --
                                        =========== =========== =========== =========== =========== ===========
Net unrealized gains after offsets..     $    43.2               $    43.2               $     --
                                        ===========             ===========             ===========

Equity Securities
Unrealized gains (losses)...........     $   108.3   $    (3.3)  $    94.0   $    (1.5)  $    14.3   $    (1.8)
                                        ----------- ----------- ----------- ----------- ----------- -----------
Applicable policyholder dividend
  obligation (reduction)............          14.3        (1.8)        --          --         14.3        (1.8)
Applicable deferred income
  taxes (benefit)...................          32.9        (0.5)       32.9        (0.5)        --          --
                                        ----------- ----------- ----------- ----------- ----------- -----------
Offsets to net unrealized
  gains (losses)....................          47.2        (2.3)       32.9        (0.5)       14.3        (1.8)
                                        ----------- ----------- ----------- ----------- ----------- -----------
Unrealized gains (losses)
  after offsets.....................     $    61.1   $    (1.0)  $    61.1   $    (1.0)  $     --    $     --
                                        =========== =========== =========== =========== =========== ===========
Net unrealized gains after offsets..     $    60.1               $    60.1               $     --
                                        ===========             ===========             ===========

Total net unrealized gains on debt and equity securities were $689.6 million (unrealized gains of $762.8 less
unrealized losses of $73.2). Of that net amount, $242.7 million was outside the closed block ($103.3 million
after applicable deferred policy acquisition costs and deferred income taxes) and $446.9 million was in the
closed block ($0.0 million after applicable policyholder dividend obligation).

At the end of each reporting period, we review all securities for potential recognition of an
other-than-temporary impairment. We maintain a watch list of securities in default, near default or otherwise
considered by our investment professionals as being distressed, potentially distressed or requiring a
heightened level of scrutiny. We also identify securities whose carrying value has been below amortized cost on
a continuous basis for zero to six months, greater than six months to 12 months, greater than 12 months to 24
months and greater than 24 months. This analysis is provided for investment grade and non-investment grade
securities and closed block and outside of closed block securities. Using this analysis, coupled with our watch
list, we review all securities whose fair value is less than 80% of amortized cost (significant unrealized
loss) with emphasis on below investment grade securities with a continuous significant unrealized loss in
excess of six months. In addition, we review securities that had experienced lesser percentage declines in
value on a more selective basis to determine if a security is other-than-temporarily impaired.


                                                      70

Our assessment of whether an investment by us in a debt or equity security is other-than-temporarily impaired
includes whether the issuer has:

   •   defaulted on payment obligations;
   •   declared that it will default at a future point outside the current reporting period;
   •   announced that a restructuring will occur outside the current reporting period;
   •   severe liquidity problems that cannot be resolved;
   •   filed for bankruptcy;
   •   a financial condition which suggests that future payments are highly unlikely;
   •   deteriorating financial condition and quality of assets;
   •   sustained significant losses during the current year;
   •   announced adverse changes or events such as changes or planned changes in senior management,
       restructurings, or a sale of assets; and/or
   •   been affected by any other factors that indicate that the fair value of the investment may have been
       negatively impacted.

The following tables present certain information with respect to our gross unrealized losses with respect to
our investments in general account debt securities, both outside and inside the closed block, as of December
31, 2003. In the tables, we separately present information that is applicable to unrealized losses both outside
and inside the closed block. We believe it is unlikely that there would be any effect on our net income related
to the realization of investment losses inside the closed block due to the current sufficiency of the
policyholder dividend obligation liability in the closed block. See Note 3 to our consolidated financial
statements in this Form 10-K for more information regarding the closed block. Applicable deferred policy
acquisition costs and income taxes further reduce the effect on our comprehensive income.



                                                      71

Duration of Gross Unrealized Losses on                                   As of December 31, 2004
General Account Securities:                          ----------------------------------------------------------
($ amounts in millions)                                                0 - 6          6 - 12        Over 12
                                                        Total          Months         Months        Months
                                                     -------------  -------------  -------------  -------------
Debt Securities Outside Closed Block
Total fair value....................................  $   1,992.0    $   1,612.9    $      72.0    $     307.1
Total amortized cost................................      2,036.8        1,630.9           73.3          332.6
                                                     -------------  -------------  -------------  -------------
Unrealized losses...................................  $     (44.8)   $     (18.0)   $      (1.3)   $     (25.5)
                                                     =============  =============  =============  =============
Unrealized losses after offsets.....................  $     (18.4)   $      (7.8)   $      (0.5)   $     (10.1)
                                                     =============  =============  =============  =============
Unrealized losses over 20% of cost..................  $     (16.8)   $      (0.1)   $      --      $     (16.7)
                                                     =============  =============  =============  =============
Unrealized losses over 20% of cost after offsets....  $      (6.2)   $      --      $      --      $      (6.2)
                                                     =============  =============  =============  =============

Investment grade:
Unrealized losses...................................  $     (30.3)   $     (16.1)   $      (0.9)   $     (13.3)
                                                     =============  =============  =============  =============
Unrealized losses after offsets.....................  $     (13.0)   $      (7.1)   $      (0.4)   $      (5.5)
                                                     =============  =============  =============  =============
Unrealized losses over 20% of cost..................  $      (6.5)   $      --      $      --      $      (6.5)
                                                     =============  =============  =============  =============
Unrealized losses over 20% of cost after offsets....  $      (2.6)   $      --      $      --      $      (2.6)
                                                     =============  =============  =============  =============

Below investment grade:
Unrealized losses...................................  $     (14.5)   $      (1.9)   $      (0.4)   $     (12.2)
                                                     =============  =============  =============  =============
Unrealized losses after offsets.....................  $      (5.3)   $      (0.7)   $      (0.1)   $      (4.5)
                                                     =============  =============  =============  =============
Unrealized losses over 20% of cost..................  $     (10.3)   $      (0.1)   $      --      $     (10.2)
                                                     =============  =============  =============  =============
Unrealized losses over 20% of cost after offsets....  $      (3.6)   $      --      $      --      $      (3.6)
                                                     =============  =============  =============  =============

Equity Securities Outside Closed Block
Unrealized losses...................................  $      (1.5)   $      (1.1)   $      (0.1)   $      (0.3)
                                                     =============  =============  =============  =============
Unrealized losses after offsets.....................  $      (1.0)   $      (0.7)   $      (0.1)   $      (0.2)
                                                     =============  =============  =============  =============
Unrealized losses over 20% of cost..................  $      (1.4)   $      (1.1)   $      (0.1)   $      (0.2)
                                                     =============  =============  =============  =============
Unrealized losses over 20% of cost after offsets....  $      (0.8)   $      (0.7)   $      (0.1)   $      (0.1)
                                                     =============  =============  =============  =============



                                                      72




For debt securities outside of the closed block with gross unrealized losses, 68.0% of the unrealized losses
after offsets pertains to investment grade securities and 32.0% of the unrealized losses after offsets pertains
to below investment grade securities at December 31, 2004.

Duration of Gross Unrealized Losses On                                      As of December 31, 2004
General Account Securities:                                ----------------------------------------------------
($ amounts in millions)                                                    0 - 6         6 - 12       Over 12
                                                               Total       Months        Months       Months
                                                           ------------ ------------  ------------ ------------
Debt Securities Inside Closed Block
Total fair  value.......................................    $  1,035.8   $    646.5    $     42.7   $    346.6
Total amortized cost....................................       1,060.9        655.2          43.5        362.2
                                                           ------------ ------------  ------------ ------------
Unrealized losses.......................................    $   (25.1)   $     (8.7)   $     (0.8)  $    (15.6)
                                                           ============ ============  ============ ============
Unrealized losses after offsets.........................    $     --     $     --      $     --     $     --
                                                           ============ ============  ============ ============
Unrealized losses over 20% of cost......................    $     (3.8)  $     (0.1)   $     --     $     (3.7)
                                                           ============ ============  ============ ============
Unrealized losses over 20% of cost after offsets........    $     --     $     --      $     --     $     --
                                                           ============ ============  ============ ============

Investment grade:
Unrealized losses.......................................    $    (18.6)  $     (7.6)   $     (0.8)  $    (10.2)
                                                           ============ ============  ============ ============
Unrealized losses after offsets.........................    $     --     $     --      $     --     $     --
                                                           ============ ============  ============ ============
Unrealized losses over 20% of cost......................    $     (0.1)  $     (0.1)   $     --     $     --
                                                           ============ ============  ============ ============
Unrealized losses over 20% of cost after offsets........    $     --     $     --      $     --     $     --
                                                           ============ ============  ============ ============

Below investment grade:
Unrealized losses.......................................    $     (6.5)  $     (1.1)   $     --     $     (5.4)
                                                           ============ ============  ============ ============
Unrealized losses after offsets.........................    $     --     $     --      $     --     $     --
                                                           ============ ============  ============ ============
Unrealized losses over 20% of cost......................    $     (3.7)  $     --      $     --     $     (3.7)
                                                           ============ ============  ============ ============
Unrealized losses over 20% of cost after offsets........    $     --     $     --      $     --     $     --
                                                           ============ ============  ============ ============

Equity Securities Inside Closed Block
Unrealized losses.......................................    $     (1.8)  $     (1.1)   $     (0.1)  $     (0.6)
                                                           ============ ============  ============ ============
Unrealized losses after offsets.........................    $     --     $     --      $     --     $     --
                                                           ============ ============  ============ ============
Unrealized losses over 20% of cost......................    $     (0.5)  $     (0.1)   $     --     $     (0.4)
                                                           ============ ============  ============ ============
Unrealized losses over 20% of cost after offsets........    $     --     $     --      $     --     $     --
                                                           ============ ============  ============ ============

For debt securities in the closed block with gross unrealized losses, 74% of the unrealized losses pertain to
investment grade securities and 26% of the unrealized losses pertain to below investment grade securities.

In determining that the securities giving rise to the previously mentioned unrealized losses were not
other-than-temporarily impaired, we evaluated the factors cited above, which we consider when assessing whether
a security is other-than-temporarily impaired. In making these evaluations, we must exercise considerable
judgment. Accordingly, there can be no assurance that actual results will not differ from our judgments and
that such differences may require the future recognition of other-than-temporary impairment charges that could
have a material affect on our financial position and results of operations. In addition, the value of, and the
realization of any loss on, a debt security or equity security is subject to numerous risks, including interest
rate risk, market risk, credit risk and liquidity risk. The magnitude of any loss incurred by us may be
affected by the relative concentration of our investments in any one issuer or industry. We have established
specific policies limiting the concentration of our investments in any single issuer and industry and believe
our investment portfolio is prudently diversified.

                                                      73


Aberdeen Asset Management PLC

As of December 31, 2004 and 2003, we owned 16.5% of the outstanding shares of Aberdeen, which we sold to third
parties on January 14, 2005 for net proceeds of $70.4 million. We also owned a $27.5 million convertible
subordinated note issued by Aberdeen, which was repaid in full on November 19, 2004. These transactions
completed our disposition of our direct financial interests in Aberdeen. See Notes 1 and 5 to our consolidated
financial statements in this Form 10-K for more information related to our investments in Aberdeen.

Hilb Rogal & Hobbs Company

Our investment in Hilb Rogal & Hobbs, or HRH, a Virginia-based property and casualty insurance and employee
benefit products distributor, includes primarily common stock. See Notes 5 and 6 to our consolidated financial
statements in this Form 10-K for detailed information regarding our investment in HRH.

Liquidity and Capital Resources

In the normal course of business, we enter into transactions involving various types of financial instruments
such as debt and equity securities. These instruments have credit risk and also may be subject to risk of loss
due to interest rate and market fluctuations.

Liquidity refers to the ability of a company to generate sufficient cash flow to meet its cash requirements.
The following discussion combines liquidity and capital resources as these subjects are interrelated.

The Phoenix Companies, Inc. (consolidated)

Summary Consolidated Cash Flows:                       Year Ended December 31,               Changes
($ amounts in millions)                         ------------------------------------  -----------------------
                                                    2004        2003        2002        2004/03     2003/02
                                                -----------  ----------- -----------  ----------- -----------

Cash from continuing operations..............    $    59.1    $   397.6   $   323.5    $  (338.5)  $    74.1
Cash from (for) discontinued operations......         14.9        (36.5)      (59.1)        51.4        22.6
Cash from (for) continuing operations
  investing activities.......................        133.9     (1,139.2)   (2,506.1)     1,273.1     1,366.9
Cash from (for) discontinued operations
  investing activities.......................          6.5         (4.4)       37.3         10.9       (41.7)
Cash from (for) financing activities.........       (227.3)       119.9     2,491.6       (347.2)   (2,371.7)

2004 vs. 2003

Cash from continuing operations decreased $338.5 million, or 85%, in 2004 from 2003, primarily due to higher
benefits paid, which are funded through investing activities. Benefit payments were higher in 2004 due
primarily to scheduled surrenders and withdrawals of $184.2 million related to a portion of a group of large
corporate-owned policies and higher surrenders for an old run-off block of corporate-owned life insurance and
for participating life insurance.

Cash from continuing operations investing activities was $133.9 million for 2004 compared to cash for
continuing operations investing activities of $1,139.2 million for 2003. The $1,273.1 million change is
primarily due to lower investment purchases resulting from lower cash from operating and financing activities
in 2004 and higher cash balances at the beginning of 2003 that were invested during 2003.

Cash from financing activities decreased $347.2 million, or 289%, in 2004 from 2003, due to reductions in
policyholder deposit fund deposits of $416.9 million in 2004 compared to 2003. This decrease was partially
offset by net proceeds from borrowings in 2004 of $41.4 million. See Note 6 of to consolidated financial
statements in this Form 10-K for more information on financing activities.

                                                      74


2003 vs. 2002

For 2003, cash from continuing operations increased $74.1 million over 2002, due primarily to higher investment
income collected and lower operating expenses paid, partially offset by lower premiums collected.

For 2003, cash for continuing operations investing activities decreased $1,366.9 million from 2002, due
primarily to lower cash from financing activities from lower policyholder deposit fund receipts and lower net
proceeds from collateralized obligations. Proceeds from collateralized obligations were higher in 2002 due to
proceeds from Mistic CDO, which closed in 2002.

For 2003, cash from financing activities decreased $2,371.7 million from 2002, due primarily to lower
policyholder deposit fund receipts and lower net proceeds from collateralized obligations (discussed above),
partially offset by treasury stock purchases in 2002 that were not continued in 2003.

The Phoenix Companies, Inc. (parent company only)

Summary Cash Flows:                                   Year Ended December 31,                 Changes
($ amounts in millions)                         ------------------------------------  -----------------------
                                                    2004         2003       2002        2004/03     2003/02
                                                -----------  ----------- -----------  ----------- -----------

Cash from operating activities...............    $    61.2    $    33.2   $    61.3    $    28.0   $   (28.1)
Cash for investing activities................         (8.0)       (25.7)     (372.0)        17.7       346.3
Cash (for) from financing activities.........        (15.0)       (15.1)      136.1          0.1      (151.2)

2004 vs. 2003

Cash from operating activities increased $28.0 million in 2004 over 2003, primarily due to an increase of $25.2
million in the dividend received from Phoenix Life.

Cash for investing activities decreased $17.7 million in 2004 from 2003, primarily due to a decrease in
subsidiary purchases and advances to subsidiaries in 2004.

2003 vs. 2002

Cash from operating activities decreased $28.1 million in 2003 from 2002, primarily due to a decrease of $22.5
million in the dividend from Phoenix Life and slightly higher expense payments.

Cash for investing activities decreased $346.3 million in 2003 from 2002, due to reduced contributions and
advances to subsidiaries and lower equity security purchases. This resulted from reduced cash from financing as
discussed below.

Cash from financing activities decreased $151.2 million in 2003 from 2002, due to the proceeds from the
issuance of stock purchase contracts and equity units in 2002 for an aggregate of $ 283.0 million, partially
offset by common stock repurchases of $131.1 million. Those financing activities did not recur in 2003.

Our primary uses of liquidity include dividend payments on our common stock, loans or contributions to our
subsidiaries, debt service and general corporate expenses.

                                                      75


Our primary sources of liquidity have been dividends from Phoenix Life and interest income received from
Phoenix Investment Partners. Under New York Insurance Law, Phoenix Life can pay stockholder dividends to the
holding company in any calendar year without prior approval from the New York Superintendent of Insurance in
the amount of the lesser of 10% of Phoenix Life's surplus to policyholders as of the immediately preceding
calendar year or Phoenix Life's statutory net gain from operations for the immediately preceding calendar year,
not including realized capital gains. Phoenix Life paid a dividend of $69.7 million in April 2004 and is able
to pay a dividend of $35.1 million in 2005 under this provision. See Note 15 to our consolidated financial
statements in this Form 10-K for more information on Phoenix Life statutory financial information and
regulatory matters.

We sponsor postemployment benefit plans through pension and savings plans and postretirement health care and
life insurance for employees of Phoenix Life and Phoenix Investment Partners. Funding of these obligations is
provided by Phoenix Life and Phoenix Investment Partners on a 100% cost reimbursement basis through
administrative services agreements with the holding company. See Note 11 to our consolidated financial
statements in this Form 10-K for additional information.

Phoenix Investment Partners pays interest to the holding company on its debt from the holding company. The
holding company does not expect to receive dividends from Phoenix Investment Partners in the near term because
this subsidiary will likely use a substantial portion of its cash flows from operations to pay for additional
ownership in its existing majority-owned subsidiaries and to repay intercompany debt, including debt to the
holding company and interest on debt.

On November 22, 2004, we entered into a new $150.0 million three-year, unsecured senior revolving credit
facility to replace the prior $150.0 million credit facility that was to expire on December 20, 2004. The prior
facility consisted of two tranches: a $112.5 million, 364-day revolving credit facility and a $37.5 million
three-year revolving credit facility. Potential borrowers on the new credit line are The Phoenix Companies,
Inc., Phoenix Investment Partners and Phoenix Life. We unconditionally guarantee any loans under this new
facility to Phoenix Life and Phoenix Investment Partners. Base rate loans will bear interest at the greater of
Wachovia Bank, National Association's prime commercial rate or the federal funds rate plus 0.50%. Eurodollar
rate loans will bear interest at LIBOR plus an applicable percentage based on our Standard & Poor's and Moody's
ratings. The $25 million drawn by Phoenix Investment Partners on the prior facility was refinanced using this
new facility at the Eurodollar rate.

The new credit facility contains covenants that require us at all times to maintain consolidated stockholders'
equity, in accordance with GAAP, excluding the accounting effects of FIN 46(R), of $1,648.4 million, plus 50%
of positive quarterly net income and 100% of equity issuances and a maximum consolidated debt-to-capital ratio
of 30% and that limit consolidated indebtedness, subject to certain exceptions, to $750.0 million. In addition,
Phoenix Life must maintain a minimum RBC ratio of 250% and a minimum A.M. Best financial strength rating of
"A-". The new facility no longer has a fixed charge coverage covenant. Borrowings under the facility are not
conditioned on the absence of a material adverse change.

See Note 19 to our consolidated financial statements in this Form 10-K for more information on the holding
company.

Life Companies

The Life Companies' liquidity requirements principally relate to: the liabilities associated with various life
insurance and annuity products; the payment of dividends by Phoenix Life to us; operating expenses;
contributions to subsidiaries; and payment of principal and interest by Phoenix Life on its outstanding debt
obligations. Liabilities arising from life insurance and annuity products include the payment of benefits, as
well as cash payments in connection with policy surrenders, withdrawals and loans. The Life Companies also have
liabilities arising from the runoff of the remaining group accident and health reinsurance discontinued
operations.

                                                      76


Historically, our Life Companies have used cash flow from operations and investment activities to fund
liquidity requirements. Their principal cash inflows from life insurance and annuities activities come from
premiums, annuity deposits and charges on insurance policies and annuity contracts. In the case of Phoenix
Life, cash inflows also include dividends, distributions and other payments from subsidiaries. Principal cash
inflows from investment activities result from repayments of principal, proceeds from maturities, sales of
invested assets and investment income. The principal cash inflows from our discontinued group accident and
health reinsurance operations come from our reinsurance, recoveries from other retrocessionaires and investment
activities. See Note 17 to our consolidated financial statements in this Form 10-K for additional information.

Additional liquidity to meet cash outflows is available from our Life Companies' portfolios of liquid assets.
These liquid assets include substantial holdings of United States government and agency bonds, short-term
investments and marketable debt and equity securities.

Phoenix Life's current sources of liquidity also include the revolving credit facility under which Phoenix Life
has direct borrowing rights, discussed above, subject to our unconditional guarantee. Since the
demutualization, Phoenix Life's access to the cash flows generated by the closed block assets has been
restricted to funding the closed block.

A primary liquidity concern with respect to life insurance and annuity products is the risk of early
policyholder and contractholder withdrawal. Our Life Companies closely monitor their liquidity requirements in
order to match cash inflows with expected cash outflows, and employ an asset/liability management approach
tailored to the specific requirements of each product line, based upon the return objectives, risk tolerance,
liquidity, tax and regulatory requirements of the underlying products. In particular, our Life Companies
maintain investment programs generally intended to provide adequate funds to pay benefits without forced sales
of investments. Products having liabilities with relatively long lives, such as life insurance, are matched
with assets having similar estimated lives, such as long-term bonds, private placement bonds and mortgage
loans. Shorter-term liabilities are matched with investments with short-term and medium-term fixed maturities.

Annuity Actuarial Reserves and Deposit Liabilities                             As of December 31,
Withdrawal Characteristics:                                            2004                     2003
($ amounts in millions)                                       -----------------------  -----------------------
                                                                 Amount(1)    Percent      Amount(1)    Percent
                                                               ----------- -----------  ----------- -----------

Not subject to discretionary withdrawal provision............   $   174.9          7%    $   220.8          3%
Subject to discretionary withdrawal without adjustment.......       720.8         29%      1,967.2         28%
Subject to discretionary withdrawal with market value
  adjustment.................................................       121.1          5%        811.6         11%
Subject to discretionary withdrawal at contract value
  less surrender charge......................................        43.1          2%        869.8         12%
Subject to discretionary withdrawal at market value..........     1,397.4         57%      3,294.0         46%
                                                               ----------- -----------  ----------- -----------
Total annuity contract reserves and deposit fund liability...   $ 2,457.3        100%    $ 7,163.4        100%
                                                               =========== ===========  =========== ===========
________
(1) Contract reserves and deposit fund liability amounts are reported on a statutory basis, which more
   accurately reflects the potential cash outflows and include variable product liabilities. Annuity contract
   reserves and deposit fund liabilities are monetary amounts that an insurer must have available to provide
   for future obligations with respect to its annuities and deposit funds. These are liabilities on the balance
   sheet of financial statements prepared in conformity with statutory accounting practices. These amounts are
   at least equal to the values available to be withdrawn by policyholders.

Individual life insurance policies are less susceptible to withdrawals than annuity contracts because
policyholders may incur surrender charges and be required to undergo a new underwriting process in order to
obtain a new insurance policy. As indicated in the table above, most of our annuity contract reserves and
deposit fund liabilities are subject to withdrawals.

                                                      77


Individual life insurance policies, other than term life insurance policies, increase in cash values over their
lives. Policyholders have the right to borrow an amount generally up to the cash value of their policies at any
time. As of December 31, 2004, our Life Companies had approximately $11.7 billion in cash values with respect
to which policyholders had rights to take policy loans. The majority of cash values eligible for policy loans
are at variable interest rates that are reset annually on the policy anniversary. Policy loans at December 31,
2004 were $2.2 billion.

The primary liquidity risks regarding cash inflows from the investment activities of our Life Companies are the
risks of default by debtors, interest rate and other market volatility and potential illiquidity of
investments. We closely monitor and manage these risks.

We believe that the current and anticipated sources of liquidity for our Life Companies are adequate to meet
their present and anticipated needs.

On December 15, 2004, we repurchased $144.8 million of the previously $175.0 million outstanding principal
amount of our 6.95% surplus notes scheduled to mature in 2006, and recognized a loss of $10.4 million in
connection with the transaction. To finance the tender, we issued $175.0 million principal of 7.15% surplus
notes with a scheduled maturity of 30 years for proceeds of $171.6 million, net of discount and issue costs.

On April 30, 2004, Phoenix Life paid a dividend of $69.7 million to The Phoenix Companies, Inc., as Phoenix
Life's sole shareholder. Under New York Insurance Law, Phoenix Life can pay dividends to The Phoenix Companies
in any calendar year without the approval from the New York Superintendent of Insurance in the amount of the
lesser of 10% of Phoenix Life's surplus to policyholders as of the immediately preceding calendar year or
Phoenix Life's statutory net gain from operations for the immediately preceding calendar year, not including
realized capital gains. Phoenix Life's statutory gain from operations was $35.1 million for the year ended
December 31, 2004, net of a $16.0 million tax payment related to the forgiveness of debt on a restructured
investment, $10.2 million in after-tax restructuring charges primarily associated with the sale of our retail
affiliated broker-dealer operations and the outsourcing of our information technology infrastructure, and $8.3
in after-tax costs related to the surplus notes tender and issuance transactions.

Phoenix Investment Partners

Phoenix Investment Partners' liquidity requirements are primarily to fund operating expenses and pay its debt
and interest obligations. Phoenix Investment Partners also would require liquidity to fund the costs of any
payments for additional ownership in existing majority-owned subsidiaries, as well as any potential
acquisitions. Historically, Phoenix Investment Partners' principal source of liquidity has been cash flow from
operations. We expect that cash flow from operations will continue to be its principal source of working
capital. Its current sources of liquidity also include a revolving credit facility under which it has direct
borrowing rights subject to our unconditional guarantee. We believe that Phoenix Investment Partners' current
and anticipated sources of liquidity are adequate to meet its present and anticipated needs. See Notes 4 and 6
to our consolidated financial statements in this Form 10-K for further details on our financing activities.

                                                      78


Consolidated Financial Condition

Consolidated Balance Sheet                                                   As of December 31,
($ amounts in millions)                                                  -------------------------
                                                                              2004         2003        Change
                                                                         ------------ ------------ ------------
ASSETS
Available-for-sale debt securities, at fair value......................   $ 13,476.3   $ 13,273.0   $    203.3
Available-for-sale equity securities, at fair value....................        304.3        312.0         (7.7)
Trading equity securities..............................................         87.3         --           87.3
Mortgage loans, at unpaid principal balances...........................        207.9        284.1        (76.2)
Venture capital partnerships, at equity in net assets..................        255.3        234.9         20.4
Affiliate equity securities, at equity in net assets...................         --           47.5        (47.5)
Policy loans, at unpaid principal balances.............................      2,196.7      2,241.4        (44.7)
Other investments......................................................        371.8        402.0        (30.2)
                                                                         ------------ ------------ ------------
                                                                            16,899.6     16,794.9        104.7
Available-for-sale debt and equity securities pledged as collateral,
  at fair value........................................................      1,278.8      1,350.0        (71.2)
                                                                         ------------ ------------ ------------
Total investments......................................................     18,178.4     18,144.9         33.5
Cash and cash equivalents..............................................        435.0        447.9        (12.9)
Accrued investment income..............................................        222.3        222.3         --
Receivables............................................................        135.8        224.9        (89.1)
Deferred policy acquisition costs......................................      1,429.9      1,367.7         62.2
Deferred income taxes..................................................         30.7         58.7        (28.0)
Other intangible assets................................................        308.4        335.1        (26.7)
Goodwill...............................................................        427.2        419.9          7.3
Other assets...........................................................        244.6        254.6        (10.0)
Separate account assets................................................      6,950.3      6,083.2        867.1
                                                                         ------------ ------------ ------------
Total assets...........................................................   $ 28,362.6   $ 27,559.2   $    803.4
                                                                         ============ ============ ============
LIABILITIES
Policy liabilities and accruals........................................   $ 13,132.3   $ 13,088.6   $     43.7
Policyholder deposit funds.............................................      3,492.4      3,642.7       (150.3)
Stock purchase contracts...............................................        131.9        128.8          3.1
Indebtedness...........................................................        690.8        639.0         51.8
Other liabilities......................................................        546.3        534.5         11.8
Non-recourse collateralized obligations................................      1,355.2      1,472.0       (116.8)
Separate account liabilities...........................................      6,950.3      6,083.2        867.1
                                                                         ------------ ------------ ------------
Total liabilities......................................................     26,299.2     25,588.8        710.4
                                                                         ------------ ------------ ------------
MINORITY INTEREST
Minority interest in net assets of consolidated subsidiaries...........         41.0         22.6         18.4
                                                                         ------------ ------------ ------------
STOCKHOLDERS' EQUITY
Common stock and additional paid in capital............................      2,436.2      2,432.4          3.8
Deferred compensation on restricted stock units........................         (3.6)        (3.6)        --
Accumulated deficit....................................................       (285.6)      (355.3)        69.7
Accumulated other comprehensive income.................................         58.0         63.7         (5.7)
Treasury stock.........................................................       (182.6)      (189.4)         6.8
                                                                         ------------ ------------ ------------
Total stockholders' equity.............................................      2,022.4      1,947.8         74.6
                                                                         ------------ ------------ ------------
Total liabilities, minority interest and stockholders' equity..........   $ 28,362.6   $ 27,559.2   $    803.4
                                                                         ============ ============ ============

2004 vs. 2003

Available-for-sale debt securities increased $203.3 million in 2004 from December 31 2003, reflecting slight
appreciation of bond values as a result of a modest decline in risk-free interest rates and a tightening of
credit spreads since December 31, 2003.

                                                      79


Trading equity securities gain of $87.3 in 2004 related to our equity holdings in Aberdeen. See Notes 1 and 5
to our consolidated financial statements in this Form 10-K for more information on Aberdeen.

Mortgage loans decreased $76.2 million, or 27%, in 2004 from December 31, 2003, due to continued paydowns of
this portfolio, which is in runoff.

The decrease in affiliate equity securities primarily relates to the change in accounting for Aberdeen from the
equity method to the fair value method. See Notes 1 and 5 to our consolidated financial statements in this Form
10-K for more information on Aberdeen.

Other investments decreased $30.2 million, or 8%, in 2004 from December 31, 2003, primarily attributable to the
return of seed money held in separate accounts and the liquidation of a hedge fund investment.

Available-for-sale debt and equity securities pledged as collateral decreased $71.2 million, or 5%, in 2004
from December 31, 2003, primarily due to the liquidation of securities to fund the paydown of non-recourse
collateralized obligations.

Deferred policy acquisition costs increased $62.2 million, or 5%, in 2004 from December 31, 2003, due primarily
to policy acquisition costs deferred of $164.7 million plus $7.7 million for the effect of unrealized
investment losses included in other comprehensive income, less amortization of $110.2 million. See Note 3 to
our consolidated financial statements in this Form 10-K for additional information.

Composition of Deferred Acquisition Costs by Product:                    As of December 31,
($ amounts in millions)                                              ----------------------------
                                                                         2004           2003         Change
                                                                     -------------  ------------- -------------

Variable universal life...........................................    $     332.5    $     328.7   $       3.8
Universal life....................................................          216.0          169.3          46.7
Variable annuities................................................          275.4          260.3          15.1
Fixed annuities...................................................           46.0           45.2           0.8
Participating life................................................          523.0          536.7         (13.7)
Other.............................................................           37.0           27.5           9.5
                                                                     -------------  ------------- -------------
Total deferred acquisition costs..................................    $   1,429.9    $   1,367.7   $      62.2
                                                                     =============  ============= =============

The increase in deferred acquisition costs reflects growing blocks of funds under deposit for variable
universal life and variable annuities, while the decrease for participating life reflects the fact that this
block is in runoff.

Policyholder deposit funds decreased $150.3 million, or 4%, in 2004 from December 31, 2003, primarily due to
net withdrawals from variable annuity guaranteed interest sub-accounts.

Indebtedness increased $51.8 million, or 8%, in 2004 from December 31, 2003, primarily due to the issuance of
surplus notes of $175.0 million, due in 2034, and borrowings of $25.0 million on our bank credit facility.
These increases were offset by the repurchase of $144.8 million of our surplus notes, which were due in 2006.
See Note 6 to our consolidated financial statements in this Form 10-K for additional information.

Non-recourse collateralized obligations decreased $116.8 million, or 8%, in 2004 from December 31, 2003, due to
distributions to investors in non-recourse collateralized obligations and a decrease in the fair value of
non-recourse derivative cash flow hedges as a result of higher interest rates. See Note 7 to our consolidated
financial statements in this Form 10-K for additional information.

                                                      80


Contractual Obligations and Commercial Commitments

Contractual Obligations and
Commercial Commitments:
($ Amounts in Millions)                            Total         2005      2006 - 2007   2008 - 2009    Thereafter
                                               ------------  ------------  ------------  ------------  ------------
Contractual Obligations Due
Indebtedness(1).............................     $    683.9    $     25.0    $     30.2    $    153.7    $    475.0
Stock purchase contracts(2).................           --            --            --            --            --
Operating lease obligations................           31.0           8.8          14.3           6.1           1.8
Other purchase liabilities(3)(4) ............          169.7          38.6          79.7          34.6          16.8
                                               ------------  ------------  ------------  ------------  ------------
Total fixed contractual obligations........          884.6          72.4         124.2         194.4         493.6
Other long-term liabilities(5)..............       43,148.7       1,020.7       2,549.5       2,532.0      37,046.5
                                               ------------  ------------  ------------  ------------  ------------
Subtotal...................................     $ 44,033.3    $  1,093.1    $  2,673.7    $  2,726.4    $ 37,540.1
Non-recourse collateralized obligations(6)..        1,253.3          --            --            --         1,253.3
                                               ------------  ------------  ------------  ------------  ------------
Total contractual obligations..............     $ 45,286.6    $  1,093.1    $  2,673.7    $  2,726.4    $ 38,793.4
                                               ============  ============  ============  ============  ============
Commercial Commitment Expirations
Standby letters of credit(7)................     $      9.0    $      9.0    $     --      $     --      $     --
Other commercial commitments(4)(8) ..........          182.6          50.8          13.5          64.0          54.3
                                               ------------  ------------  ------------  ------------  ------------
Total commercial commitments...............     $    191.6    $     59.8    $     13.5    $     64.0    $     54.3
                                               ============  ============  ============  ============  ============
________
(1) Indebtedness amounts include principal only. $153.7 million of indebtedness represents mandatorily
   convertible debt to be settled with our stock in February 2006.

(2) Stock purchase contracts are prepaid forward contracts issued by us that will be settled in shares of
   HRH, as further described in Note 6 of our consolidated financial statements in this Form 10-K.

(3) Other purchase liabilities relate to open purchase orders, required pension funding and other
   contractual obligations.

(4) Commitments related to recent business combinations are not included in amounts presented in this
   table. See the discussion on the following pages.

(5) Policyholder contractual obligations represent estimated benefit payments, net of reinsurance and offset by
   expected future deposits and premiums on in-force contracts, from life insurance and annuity contracts issued
   by our life insurance subsidiaries. Future obligations are based on our estimate of future investment
   earnings, mortality, surrenders and applicable policyholder dividends. Included in the amounts above are
   policyholder dividends of $8.5 billion, generated by estimated favorable future investment and mortality, in
   excess of guaranteed amounts for our closed block. Actual obligations in any single year, or ultimate total
   obligations, may materially vary from these estimates as actual experience emerges. Because future
   obligations anticipate future investment earnings, total policyholder contractual obligations exceed
   policyholder liabilities on our balance sheet (policy liabilities and accruals: $13,132.3 million; and
   policy deposit funds: $3,492.4 million) at December 31, 2004.

   Policyholder contractual obligations also include separate account liabilities, which are contractual
   obligations of the separate account assets established under applicable state insurance laws and are legally
   insulated from our general account assets.

(6) Non-recourse obligations are not direct liabilities of ours, as they will be repaid from investments
   pledged as collateral recorded on our consolidated balance sheet. See Note 8 to our consolidated financial
   statements in this Form 10-K for additional information.

(7) Our standby letters of credit automatically renew on an annual basis.

(8) Other commercial commitments relate to venture capital partnerships ($136.5 million) and private
   placements ($46.1 million). The venture capital commitments can be drawn down by private equity funds as
   necessary to fund their portfolio investments through the end of the funding period as stated in each
   agreement. The amount collectively drawn down by the private equity funds in our portfolio during the year
   ended December 31, 2004 was $59.2 million. The obligations related to private placements are due to be funded
   by March 15, 2005.

In addition during 2004, we signed a seven-year $120.0 million services agreement with EDS under which we will
receive information technology infrastructure services.

                                                      81


Commitments Related to Recent Business Combinations

Under the terms of purchase agreements related to certain recent business combinations, we are subject to
certain contractual obligations and commitments as follows:

Kayne Anderson Rudnick

We have an arrangement in which we are required to redeem the mandatorily redeemable noncontrolling membership
interests, or noncontrolling interests, of Kayne Anderson Rudnick. These interests which represent an
additional 15% interest in Kayne Anderson Rudnick are redeemable at a rate of one-third per year at December
31, 2004, 2005 and 2006. The total redemption price will equal net investment advisory fees for each year times
4.5 times 5.0% (the proportionate interest purchased). Such amounts are paid during the following quarter.
Under certain circumstances, the redemptions may be accelerated.

In January 2004, one member of Kayne Anderson Rudnick accelerated his portion of the 15% noncontrolling
interest redemptions, at which time we redeemed an additional 0.3% of the company. Phoenix Investment Partners
has accrued $11.4 million related to the remaining 4.9% acquisition required as of December 31, 2004. The two
remaining 4.9% noncontrolling interest acquisitions will be accounted for when the purchase price contingency
resolves.

There is also an agreement executed at the time of acquisition, which allows for the redemption and reissuance
with respect to the remaining 25% of the noncontrolling membership interests. The purchase price for these
noncontrolling interests will be equal to investment advisory fees for the relevant contract year multiplied by
4.5 multiplied by the amount of membership interest purchased. The contract year is defined as the twelve
months ending December 31, 2006 and each calendar year thereafter. The pricing on the agreements will be
determined within 60 days after each such year-end and can be exercised within 60 days of the finalization of
the price. These agreements may expire unexercised should Kayne Anderson Rudnick's operating results decline
from the acquisition date. Any noncontrolling interests redeemed will be reissued to members/employees of Kayne
Anderson Rudnick. The reissuance process involves Phoenix Investment Partners contributing the interests to
Kayne Anderson Rudnick and then Kayne Anderson Rudnick selling the interests to the members/employees. The
members/employees will not pay cash for these purchases but will enter into a note payable agreement with Kayne
Anderson Rudnick. Phoenix Investment Partners will have preferential distribution rights with respect to
payments of principal and interest on these notes. Under certain circumstances, these interests can be issued
without a note payable or other consideration. In addition, in certain circumstances, the redemptions may be
accelerated. Once these interests are redeemed and then reissued, the amount of cash that Phoenix Investment
Partners will need to pay to redeem them in the future will be based on the growth in Kayne Anderson Rudnick's
revenues since the reissuance dates. There is no expiration date for the agreements. There is no cap or floor
on the redemption price.

In January 2004 and August 2003, certain members of Kayne Anderson Rudnick accelerated their noncontrolling
interest arrangements. The purchase price for their interests totaled $1.7 million and $4.5 million,
respectively, which was recorded as additional purchase price by Phoenix Investment Partners and allocated to
goodwill and definite-lived intangible assets.

PFG

In 2003, we acquired the remaining interest in PFG, the holding company for our private placement operation,
not already owned by us for initial consideration of $16.7 million. Under the terms of the purchase agreement,
we may be obligated to pay additional consideration of up to $86.5 million to the selling shareholders,
including $10.0 million during 2005 through 2007 based on certain financial performance targets being met, and
the balance in 2008 based on the appraised value of PFG as of December 31, 2007. During the year ended December
31, 2004, we paid $3.0 million under this obligation.

                                                      82


We have accounted for our acquisition of the remaining interest in PFG as a step-purchase acquisition.
Accordingly, we recorded a definite-lived intangible asset of $9.8 million related to the present value of
future profits acquired and a related deferred tax liability of $3.4 million. The present value of future
profits intangible asset will be amortized over the remaining estimated life of the underlying insurance in
force acquired, estimated to be 40 years. The remaining acquisition price plus transaction costs of $7.6
million has been assigned to goodwill. We have not presented pro forma information as if PFG had been acquired
at the beginning of January 2003, as it is not material to our financial statements. See Note 3 to our
consolidated financial statements in this Form 10-K for more information.

Seneca

We have arrangements with respect to the noncontrolling membership interests in Seneca not owned by Phoenix
Investment Partners that allow for the redemption and reissuance with respect to the noncontrolling membership
interests. The purchase price for these interests is equal to Seneca's investment advisory fees for the
relevant year multiplied by 3.5 multiplied by the amount of the interest purchased. The pricing on these
arrangements is determined within 60 days after each calendar year-end and can be exercised within 60 days of
the finalization of the price. These arrangements may expire unexercised should Seneca's operating results
decline from the initial measurement date. Any noncontrolling interests redeemed will be reissued to
members/employees of Seneca. The reissuance process involves Phoenix Investment Partners contributing the
interests to Seneca and then Seneca selling them to the members/employees. The members/employees do not pay
cash for these purchases, but enter into a note payable agreement with Seneca. Phoenix Investment Partners has
preferential distribution rights with respect to payments of principal and interest on these notes. Since these
interests have already been redeemed by Phoenix Investment Partners and reissued at least once, the amount of
cash that Phoenix Investment Partners will need to pay to redeem them in the future will be the amount related
to the growth in Seneca's revenues since the various reissuance dates. There is no cap or floor on the
redemption price. These agreements will expire after the year ended December 31, 2007. The estimated amount
that will be payable in 2005 by PNX under these agreements is $5.9 million.

Obligations Related to Pension and Postretirement Employee Benefit Plans

We provide our employees with postemployment benefits that include retirement benefits, through pension and
savings plans, and other benefits, including health care and life insurance. Employee benefit expense related
to these plans totaled $16.5 million, $33.1 million and $24.9 million for 2004, 2003 and 2002, respectively.

We have two defined benefit pension plans covering our employees. The employee pension plan, covering
substantially all of our employees, provides benefits up to the amount allowed under the Internal Revenue Code.
The supplemental plan provides benefits in excess of the primary plan. Retirement benefits under both plans are
a function of years of service and compensation. The employee pension plan is funded with assets held in a
trust, while the supplemental plan is unfunded.

As of May 31, 2004 we revalued our employee benefit assets and liabilities in connection with the sale of our
retail affiliated broker-dealer operations. As a result of the revaluation, we recognized a net curtailment
gain of $6.8 million ($4.4 million after taxes). In addition, as of September 30, 2004 we revalued our employee
benefit assets and liabilities in connection with employee terminations associated with the information
technology services agreement with EDS. As a result of this revaluation, we recognized an additional net
curtailment gain of $1.6 million ($1.1 million after taxes) for the year ended December 31, 2004.

                                                      83


Funded Status of Qualified and Non-qualified                         Employee Plan         Supplemental Plan
Pension Plans:                                                  ------------------------  ----------------------
($ amounts in millions)                                                        As of December 31,
                                                               ------------------------------------------------
                                                                   2004       2003         2004        2003
                                                               ----------- -----------  ----------- -----------

Plan assets, end of year....................................    $   396.4   $   368.9    $    --     $    --
Projected benefit obligation, end of year...................       (499.0)     (460.6)      (134.6)     (124.8)
                                                               ----------- -----------  ----------- -----------
Plan assets less than projected benefit obligations,
  end of year...............................................    $  (102.6)  $   (91.7)   $  (134.6)  $  (124.8)
                                                               =========== ===========  =========== ===========

We expect to contribute $43.3 million to the employee pension plan through 2008, including $6.5 million during
2005. For the estimated 2004 contribution, quarterly payments of $2.5 million each were made to the pension
plan in April, July and October 2004. In September 2004, we made a payment of $1.6 million, related to the 2003
minimum contribution. As soon as reasonably possible following a change in control, as defined in the plan, we
are required to make an irrevocable contribution to a trust in an amount sufficient to pay the benefits due
under the supplemental plan.

The postretirement plan is unfunded. The projected benefit obligation and, therefore, its funded status was
$(70.3) million and $(78.7) million as of December 31, 2004 and 2003, respectively. The increases in the
projected benefit obligations of the employee plan and the supplemental plan at December 31, 2004 as compared
to December 31, 2003 is principally the result of accrued service cost, interest cost and the effects of the
lowering of the assumed discount rate from 6.0% at December 31, 2003 to 5.75% at December 31, 2004.

We have entered into agreements with certain key executives of the Company that will, in certain circumstances,
provide separation benefits upon the termination of the executive's employment by the Company for reasons other
than death, disability, cause or retirement, or by the executive for "good reason," as defined in the
agreements. For most of these executives, the agreements provide this protection only if the termination occurs
following (or is effectively connected with) the occurrence of a change of control, as defined in the
agreements. As soon as reasonably possible upon a change in control, as so defined, we are required to make an
irrevocable contribution to a trust in an amount sufficient to pay benefits due under these agreements.

See Note 11 to our consolidated financial statements in this Form 10-K for more information.

Off-Balance Sheet Arrangements

As of December 31, 2004, we did not have any significant off-balance sheet arrangements as defined by Item
303(a)(4)(ii) of SEC Regulation S-K. See Note 8 to our consolidated financial statements in this Form 10-K for
more information on variable interest entities.

Reinsurance

We maintain life reinsurance programs designed to protect against large or unusual losses in our life insurance
business. Based on our review of their financial statements and reputations in the reinsurance marketplace, we
believe that these third-party reinsurers are financially sound and, therefore, that we have no material
exposure to uncollectible life reinsurance.

Statutory Capital and Surplus and Risk-based Capital

Phoenix Life's consolidated statutory basis capital and surplus (including AVR) increased from $962.4 million
at December 31, 2003 to $1,035.8 million at December 31, 2004. The principal factors resulting in this increase
were net income, earnings appreciation in Aberdeen and other equity appreciation and the issuance of a net
additional $30.2 million of surplus notes offset by a dividend of $69.7 million to the parent and a $17.5
million

                                                      84


special non-insurance reserve established in connection with the issuance of $175 million of surplus notes in
2004.

Section 1322 of New York Insurance Law requires that New York life insurers report their RBC. RBC is based on a
formula calculated by applying factors to various asset, premium and statutory reserve items. The formula takes
into account the risk characteristics of the insurer, including asset risk, insurance risk, interest rate risk
and business risk. Section 1322 gives the New York State Insurance Department explicit regulatory authority to
require various actions by, or take various actions against, insurers whose Total Adjusted Capital (capital and
surplus plus AVR plus one-half the policyholder dividend liability) does not exceed certain RBC levels. Each of
our other life insurance subsidiaries is also subject to these same RBC requirements.

The levels of regulatory action, the trigger point and the corrective actions required are summarized below:

     Company Action Level – results when Total Adjusted Capital falls below 100% of Company Action Level at
     which point the company must file a comprehensive plan to the state insurance regulators;

     Regulatory Action Level – results when Total Adjusted Capital falls below 75% of Company Action Level
     where in addition to the above, insurance regulators are required to perform an examination or analysis
     deemed necessary and issue a corrective order specifying corrective actions;

     Authorized Control Level – results when Total Adjusted Capital falls below 50% of Company Action Level
     where in addition to the above, the insurance regulators are permitted but not required to place the
     company under regulatory control; and

     Mandatory Control Level – results when Total Adjusted Capital falls below 35% of Company Action Level
     where insurance regulators are required to place the company under regulatory control.

At December 31, 2004, Phoenix Life's and each of its insurance subsidiaries' RBC levels were in excess of 300%
of Company Action Level.

See Note 15 to our consolidated financial statements in this Form 10-K regarding the Life Companies' statutory
financial information and regulatory matters.

Net Capital Requirements

Our broker-dealer subsidiaries are each subject to the net capital requirements imposed on registered
broker-dealers by the Securities Exchange Act of 1934. Each is also required to maintain a ratio of aggregate
indebtedness to net capital that does not exceed 15:1. At December 31, 2004 the largest of these subsidiaries
had net capital of approximately $11.4 million, which is $10.7 million in excess of its required minimum net
capital of $0.7 million. The ratio of aggregate indebtedness to net capital for that subsidiary was 1:1. The
ratios of aggregate indebtedness to net capital for each of our other broker-dealer subsidiaries were also
below the regulatory ratio at December 31, 2004 and their respective net capital each exceeded the applicable
regulatory minimum.

Related Party Transactions

State Farm currently owns of record more than five percent of our parent's outstanding common stock. During the
years ended December 31, 2004 and 2003, our subsidiaries incurred total compensation of $32.4 million and $25.8
million, respectively, to entities which were either subsidiaries of State Farm or owned by State Farm
employees, for the sale of our insurance and annuity products. During the years ended December 31, 2004 and
2003, we made payments of $32.7 million and $24.6 million, respectively, to State Farm entities for this
compensation.

                                                      85


Item 7A. Quantitative and Qualitative Disclosures About Market Risk

For information about our management of market risk, see Management's Discussion and Analysis of Financial
Condition and Results of Operations, in the Enterprise Risk Management section.


Item 8.  Financial Statements and Supplementary Data

See Table of Contents.


Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.


Item 9A. Controls and Procedures

Conclusion regarding disclosure controls and procedures

We have carried out an evaluation under the supervision and with the participation of our management, including
our Principal Executive Officer and our Principal Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures. There are inherent limitations to the effectiveness of any
system of disclosure controls and procedures, including the possibility of human error and the circumvention or
overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can
only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, these
officers have concluded that, as of December 31, 2004, the disclosure controls and procedures were effective to
provide reasonable assurance that information required to be disclosed in the reports Phoenix files and submits
under the Securities and Exchange Act of 1934 is recorded, processed, summarized and reported as and when
required.

Changes in internal control over financial reporting

There has been no change in our internal control over financial reporting during the quarter and year ended
December 31, 2004 that has materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.

Management's report on internal control over financial reporting

Our management, including our Principal Executive Officer and our Principal Financial Officer, is responsible
for establishing and maintaining an adequate system of internal control over financial reporting. Internal
control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external reporting purposes
in accordance with generally accepted accounting principles. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Management has assessed the
effectiveness of our internal control over financial reporting as of December 31, 2004. In making its
assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission in Internal Control – Integrated Framework. Management concluded that based on its
assessment, our internal control over financial reporting was effective as of December 31, 2004. Management's
assessment of the effectiveness of our internal control over financial reporting as of December 31, 2004 has
been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its
report which appears on pages F-1 through F-2 below.

                                                      86


Item 9B. Other Information

None.



                                                     PART III

Item 10. Directors and Executive Officers of the Registrant

The information required by Items 401 and 405 of Regulation S-K, except for Item 401 with respect to the
executive officers as disclosed below, is incorporated herein by reference to the information set forth under
Proposal 1 of our definitive proxy statement (which will be filed pursuant to Regulation 14A under the Exchange
Act within 120 days after the close of its fiscal year) under the following headings: "Corporate Governance,"
"Ownership of Common Stock," "Audit Committee Charter and Report," "Compensation Committee Report,"
"Compensation of Executive Officers," "Performance Graphs" and "Section 16(a) Beneficial Ownership Reporting
Compliance."

Set forth below is a description of the business positions held during at least the past five years by the
current executive officers of Phoenix. All ages are as of March 1, 2005.

DONA D. YOUNG, age 51, has been: Chief Executive Officer of PNX and Phoenix Life since January 2003; President
and a Director of PNX since 2000; a Director of Phoenix Life since 1998; and President of Phoenix Life since
2000. Before then, she was: Chief Operating Officer from 2001 until 2003; Executive Vice President, Individual
Insurance and General Counsel of Phoenix Life from 1994 until 2000; and Senior Vice President and General
Counsel of Phoenix Life from 1989 until 1994. Mrs. Young also serves as a director of Wachovia Corporation and
Foot Locker, Inc.

DANIEL T. GERACI, age 47, has been Executive Vice President, Asset Management, of PNX and President and Chief
Executive Officer of Phoenix Investment Partners since May 2003. From 2001 until May 2003, he was President and
Chief Executive Officer of Pioneer Investment Management USA, Inc. From 1995 to 2001, he held several senior
executive positions with Fidelity Investments, including president of Fidelity's Wealth Management Group. From
1988 through 1995, he was with Midland Walwyn Capital, Inc. (later Merrill Lynch Canada), where he held
successive distribution and management positions, including founder and president of its asset management
subsidiary, Atlas Asset Management, Inc.

MICHAEL E. HAYLON, age 47, has been Executive Vice President and Chief Financial Officer of PNX and Phoenix
Life since January 1, 2004. Before then, he was Executive Vice President and Chief Investment Officer of PNX
and of Phoenix Life from 2002 through 2003. He joined Phoenix Life in 1990, as a Vice President, and became
Senior Vice President in 1993.

PHILIP K. POLKINGHORN, age 47, has been Executive Vice President, Life and Annuity Manufacturing since March
2004. Before then, he had served since 2001 as a Vice President of Sun Life Financial Company with
responsibility for overall management of its annuity business, which it acquired from Keyport Life Insurance
Company in 2001. Mr. Polkinghorn served as President of Keyport Life from 1999 until its acquisition by Sun
Life. From 1996 to 1999, he served as Chief Marketing Officer for American General.

TRACY L. RICH, age 53, has been Executive Vice President, General Counsel and Assistant Secretary of PNX and
Phoenix Life since 2002. Before then, he was Senior Vice President and General Counsel of PNX and Phoenix Life
from 2000 to 2002 and Senior Vice President and Deputy General Counsel of Massachusetts Mutual Life Insurance
Company from 1996 until 2000.

                                                      87


JOHN F. SHARRY, age 52, has been Senior Vice President and Chief Marketing Officer since September 2004. From
1995 until September 2004, he held several senior management positions with Phoenix Investment Partners, Ltd.
From 1992 until 1995, he was Managing Director of Putnam Investments. From 1988 until 1992, he was First Vice
President with Dean Witter (now Morgan Stanley).

JAMES D. WEHR, age 47, has been Executive Vice President and Chief Investment Officer since February 2005.
Before then, he had been Senior Vice President and Chief Investment Officer of PNX and Phoenix Life since
January 1, 2004. Before then, he was Senior Managing Director and Portfolio manager of Phoenix Investment
Partners from 1995 through 2003. He joined Phoenix in 1981 and has held a series of increasingly senior
investment positions.


                                                  Code of Ethics

We have a code of ethics that is applicable to all of our Company directors and employees, including our
principal executive officer, principal financial officer and principal accounting officer. A copy of this code
(our "Code of Conduct") may be reviewed on our website at www.PhoenixWealthManagement.com, in the Investor
Relations section. The latest amendments to the Code of Conduct will be reflected, together with a description
of the nature of any amendments, other than ones that are technical, administrative or non-substantive, on the
above website. In the event we ever waive compliance with the code by our principal executive officer, our
principal financial officer, or our principal accounting officer, we will disclose the waiver on that website.
Copies of our code may also be obtained without charge by sending a request either by mail to: Corporate
Secretary, The Phoenix Companies, Inc., One American Row, P.O. Box 5056, Hartford, Connecticut 06102-5056, or
by e-mail to: corporate.secretary@phoenixwm.com.


Item 11.  Executive Compensation

The information required by Item 402 of Regulation S-K is incorporated herein by reference to the information
set forth under the sections entitled: "Corporate Governance," Compensation of Executive Officers,"
"Compensation Committee Report," and "Performance Graphs" of our definitive proxy statement, which will be
filed pursuant to Regulation 14A under the Securities Exchange Act of 1934, or the Exchange Act, within 120
days after the close of PNX's fiscal year.

In February 2005, the Compensation Committee (and in the case of the Chief Executive Officer, the Board)
approved the performance-based long-term incentive grants for the 2005 through 2007 cycle under the Company's
2003 Restricted Stock, Restricted Stock Unit and Long Term Incentive Plan for the named executive officers. The
target number of RSUs for this incentive cycle are as follows: Mrs. Young - 151,274; Mr. Geraci - 83,599; Mr.
Haylon - 42,118; Mr. Sharry - 37,818; and Mr. Wehr - 22,691. Actual awards, which could range from zero to two
times the above targets, will be determined and paid in 2008 based on actual performance results against
pre-established performance targets.

In connection with Mr. Wehr's promotion to Executive Vice President and Chief Investment Officer on February 4,
2005, the Company plans to amend his change of control agreement. The principal difference from Mr. Wehr's
current agreement, a copy of which is contained as an exhibit to this Form 10-K, is the size of the lump sum he
would be entitled to receive in the event of a change of control, as defined in the agreement. That would
increase from two times to two and a half times his combined annual salary and certain incentive payments.

                                                      88


Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by Item 403 of Regulation S-K is incorporated herein by reference to the information
set forth under the section entitled "Ownership of Common Stock" of our definitive proxy statement, which will
be filed pursuant to Regulation 14A under the Exchange Act within 120 days after the close of PNX's fiscal
year.

The information required by Item 201(d) of Regulation S-K follows.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table sets forth information as of the end of the Company's 2004 fiscal year with respect to
compensation plans under which equity securities of the Company are authorized for issuance.

                                     -----------------------  --------------------  -----------------------
                                               (A)                      (B)                 (C)
- ------------------------------------ -----------------------  --------------------  -----------------------
                                                                                    Number of securities
                                     Number of securities to  Weighted-average      remaining available for
                                     be issued upon exercise  issue price of        future issuance under
Plan Category                        of outstanding options,  outstanding options,  equity compensation
                                     warrants and rights      warrants and rights   plans, excluding
                                                                                    securities reflected
                                                                                    in column (A)
- ------------------------------------ -----------------------  --------------------  -----------------------
Equity compensation plans approved
by the Company's shareholders:
•  2003 Restricted Stock,
   Restricted Stock Unit and
   Long-Term Incentive Plan(1)                2,500,235(2)                  $9.59              3,499,765
- ------------------------------------ -----------------------  --------------------  -----------------------
Equity compensation plans not
approved by the Company's
shareholders:
•  Stock Incentive Plan(3)                    4,124,483(4)                 $15.00              1,130,253
•  Directors Stock Plan(5)                      205,500(6)                 $16.20                819,343
•  Retirement and Transition
   Agreement(7)                                 573,477(8)                 $13.95                     --
•  Executive Employment
   Agreement(9)                                 394,737(8)                  $7.60                     --
- ------------------------------------ -----------------------  --------------------  -----------------------
Total                                         7,798,432                   $12.84              5,449,361
- ------------------------------------ -----------------------  --------------------  -----------------------


(1) A copy of the 2003 Restricted Stock, Restricted Stock Unit and Long-Term Incentive Plan was filed as an
   exhibit to the 2003 Proxy Statement filed by the Company with the SEC on March 21, 2003.

(2) This figure consists of the shares underlying 424,716 RSUs that vest over time, 1,818,560 RSUs that are
   subject to performance contingencies (including 77,070 RSUs that were determined in 2005 to have met or
   exceeded threshold performance contingencies based on 2004 performance results), and 256,959 RSUs that are
   subject to no contingencies (but which are not currently convertible).

(3) A copy of the Stock Incentive Plan was filed as an exhibit to the Form S-1 filed by the Company with the
   SEC on February 9, 2001. The following summary of the material features of the plan is qualified in its
   entirety by reference to the full text of the plan, which is hereby incorporated by reference.

   Under the Company's Stock Incentive Plan, the Compensation Committee (or if the committee delegates such
   authority to the CEO, the CEO) may grant stock options to officers, employees and insurance agents of the
   Company and its subsidiaries. The maximum number of shares issuable under the plan with respect to officers,
   employees and insurance agents of the Company other than Phoenix Investment Partners, Ltd, (including those
   who are also employees, officers or directors of Phoenix Investment Partners and those individuals who were
   officers or employees of the Company on April 17, 2000) is the aggregate of 5% (approximately 5.25 million)
   of the shares outstanding on June 26, 2001 (approximately 105 million shares) reduced by the shares issuable
   pursuant to options or other awards granted under the Company's

                                                      89


   Directors Stock Plan and, with respect to officers and employees of Phoenix Investment Partners (other than
   those officers, employees or insurance agents described above), 1% (approximately 1.05 million) of the
   shares outstanding on June 26, 2001. The maximum number of shares which may be subject to award under the
   plan: prior to June 25, 2003, shall not exceed 75% of the shares available under the plan; prior to June 25,
   2004, shall not equal 85% of the shares available under the plan; and prior to June 25, 2005, shall not
   exceed 100% of the shares available under the plan. During any five-year period, no participant may be
   granted options in respect of more than 5% of the shares available for issuance under the plan. The Board
   may terminate or amend (subject, in some cases, to the approval of its shareholders and, prior to June 25,
   2006, to the approval of the New York Superintendent of Insurance) the plan, but such termination or
   amendment may not adversely affect any outstanding stock options without the consent of the affected
   participant. The plan will continue in effect until it is terminated by the Board or until no more shares
   are available for issuance.

   The exercise price per share subject to an option will be not less than the fair market value of such share
   on the option's grant date. Each option will generally become exercisable in equal installments on each of
   the first three anniversaries of the grant date, except that no option was exercisable prior to June 25,
   2003 nor may any option be exercised after the tenth anniversary of its grant date. Options may not be
   transferred by the grantee, except in the event of death or, if the committee permits, the transfer of
   non-qualified stock options by gift or domestic relations order to the grantee's immediate family members.
   Upon a grantee's death, any outstanding options previously granted to such grantee will be exercisable by
   the grantee's designated beneficiary until the earlier of the expiration of the option or five years
   following the grantee's death. If the grantee terminates employment by reason of disability or retirement,
   any outstanding option will continue to vest as if the grantee's service had not terminated and the grantee
   may exercise any vested option until the earlier of five years following termination of employment or the
   expiration of the option. If the grantee's employment is terminated for cause, the grantee will forfeit any
   outstanding options. If the grantee's employment terminates in connection with a divestiture of a business
   unit or subsidiary or similar transaction, the committee may provide that all or some outstanding options
   will continue to become exercisable and may be exercised at any time prior to the earlier of the expiration
   of the term of the options and the third anniversary of the grantee's termination of service. If the grantee
   terminates employment for any other reason, any vested options held by the grantee at the date of
   termination will remain exercisable for a period of 30 days and any then unvested options will be forfeited.

   Generally, upon a change of control (as defined in the plan), each outstanding option will become fully
   exercisable. Alternatively, the committee may: (i) require that each option be canceled in exchange for a
   payment in an amount equal to the excess, if any, of the price paid in connection with the change of control
   over the exercise price of the option; or (ii) if the committee determines in good faith that the option
   will be honored or assumed by, or an alternative award will be issued by, the acquirer in the change of
   control, require that each option remain outstanding without acceleration of vesting or exchanged for such
   alternative award.

(4) This figure consists of the shares which underlie the options issued under the Stock Incentive Plan
   (2,588,242 of which are fully vested and 1,536,241 of which are subject to vesting with the
   passage of time).

(5) A copy of the Directors Stock Plan was filed as an exhibit to the Form S-1 filed by the Company on February
   9, 2001. The following summary of the material features of the plan is qualified in its entirety by
   reference to the full text of the plan, which is hereby incorporated by reference.

   Under the Directors Stock Plan, the Board of Directors may grant options to outside directors, provided
   that: (a) prior to June 25, 2006 such options will be in substitution for a portion of the cash fees that
   would otherwise have been payable to such directors; and (b) the aggregate number of shares issuable
   pursuant to options will not exceed 0.5% of the total shares outstanding on June 26, 2001, or 524,843
   shares. Each option entitles the holder to acquire one share of our Common Stock at the stated exercise
   price. The exercise price per share will not be less than the fair market value of a share on the day such
   option is granted and the option will be exercisable from the later of June 25, 2003 or the day the option
   is granted until the earlier of the tenth anniversary of such grant date or the third anniversary of the day
   the outside director ceases to provide services for the Company. Under the Directors Stock Plan, the Board
   of Directors may require the outside directors to receive up to one-half of their directors fees in shares
   instead of cash and the outside directors may elect to receive any portion of such fees in shares instead of
   cash. The aggregate number of shares that may also be issued in lieu of cash fees may not exceed 500,000
   shares, bringing the total available under this plan to 1,024,843 shares.

(6) This figure consists of the shares which underlie the options issued under the Directors Stock Plan.

(7) A copy of the Retirement and Transition Agreement with Robert W. Fiondella, retired Chairman, was filed as
   an exhibit to the Form 8-K filed by the Company on October 9, 2002. The following summary of the material
   features of the RSUs subject to that agreement is qualified in its entirety by reference to the full text of
   the agreement, which is hereby incorporated by reference.

                                                      90


   The Company's Retirement and Transition Agreement with Mr. Fiondella provided for the issuance to him of
   $8,000,000 worth of RSUs upon his retirement in March 2003. This equated to 573,477 RSUs, based on the
   closing price of $13.95 on September 27, 2002, the date of measurement. Each unit represents the right to
   receive one share of Common Stock after June 25, 2006. The agreement expressly prohibits the actual issuance
   of stock to Mr. Fiondella prior to the fifth anniversary of the effective date of Phoenix Life's
   demutualization (i.e., prior to June 25, 2006). The agreement further provides that while Mr. Fiondella
   holds the RSUs, he will not have any right to vote or to direct the vote of the related shares of stock.
   Moreover, he is expressly prohibited from disposing of the underlying shares of stock, or of any economic
   interest related to the shares of stock, other than upon his death (in which case, the Company will
   distribute the shares of stock to his estate after June 25, 2006). The Company will credit each RSU with an
   amount equal to cash dividends on the shares of stock underlying the RSUs, or dividend equivalents, and
   interest thereon, both to be distributed promptly following June 25, 2006.

(8) This figure consists of the shares which underlie the RSUs issued or issuable pursuant to the related
   agreement.

(9) A copy of the Company's Executive Employment Agreement with Mrs. Young was filed as an exhibit to the Form
   8-K filed by the Company as of January 1, 2003. The following summary of the material features of the RSUs
   subject to that agreement is qualified in its entirety by reference to the full text of the agreement.

   The Company's Executive Employment Agreement with Mrs. Young provides for the issuance to her of that number
   of RSUs equal to the number resulting from dividing $3,000,000 by the closing price of our Common Stock on
   December 31, 2002 ($7.60) (i.e. 394,737 RSUs). The agreement expressly provides, assuming the RSUs
   have by then vested, for the issuance of stock to Mrs. Young on the later of: (a) June 26, 2006; or (b) the
   15th day after termination of her employment with the Company (the period from the grant date of January 1,
   2003 to that date being the "Restricted Period"). The agreement further provides that while Mrs. Young holds
   the RSUs, she will not have any right to vote or to direct the vote of the underlying shares of stock.
   Moreover, she is expressly prohibited from disposing of the underlying shares of stock, or of any economic
   interest related to the shares of stock, other than upon her death (in which case, the Company will
   distribute the shares of stock to her estate after June 25, 2006). The Company will credit each RSU with
   dividend equivalents and interest thereon, both to be distributed to Mrs. Young at the end of the Restricted
   Period.


Item 13. Certain Relationships and Related Transactions

The information required by Item 404 of Regulation S-K is incorporated herein by reference to the information
set forth under the section entitled "Proposal 1: Election of Directors" (under the caption "Certain
Relationships and Related Transactions") of our definitive proxy statement, which will be filed pursuant to
Regulation 14A under the Exchange Act of 1934 within 120 days after the close of our fiscal year.


Item 14. Principal Accountant Fees and Services

The information required by Item 9(C) of Schedule 14A is incorporated herein by reference to the information
set forth in the section entitled "Fees Incurred for Services Performed by PwC", under Proposal 3 of our
definitive proxy statement, which will be filed pursuant to Regulation 14A under the Securities Exchange Act of
1934 within 120 days after the close of our fiscal year.

                                                      91


                                                      PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)      Documents filed as part of this Form 10-K include:

         1.   Financial Statements. The financial statements listed in Part II of the Table of Contents to this
              Form 10-K are filed as part of this Form 10-K;
         2.   Financial Statement Schedules. All financial statement schedules are omitted as they are not
              applicable or the information is shown in the consolidated financial statements or notes thereto;
              and
         3.   Exhibits.
              i.  These management contracts and compensatory plans listed in the Exhibit Index in Section E of
                  this report which are marked with an (*) are filed with this report.
              ii. Financial statement schedules required by instruction to Item 15(c) – Regulation S-X.

                                                     * * * * *

We make our periodic and current reports available, free of charge, on our website, at
www.PhoenixWealthManagement.com, in the Investor Relations section, as soon as reasonably practicable after the
material is electronically filed with, or furnished to, the SEC.

                                                      92


                                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                          THE PHOENIX COMPANIES, INC.
                                                  (Registrant)

Dated:                March 8, 2005                       By: /s/Dona D. Young
                                                          Dona D. Young
                                                          Chairman, President and Chief Executive Officer
                                                          (Principal Executive Officer)

Dated:                March 8, 2005                       By: /s/Michael E. Haylon
                                                          Michael E. Haylon
                                                          Executive Vice President and Chief Financial Officer
                                                          (Principal Financial Officer)

Dated:                March 8, 2005                       By: /s/Scott R. Lindquist
                                                          Scott R. Lindquist
                                                          Senior Vice President and Chief Accounting Officer
                                                          (Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below, dated
March 8, 2005, by the following persons on behalf of the Registrant and in the capacities indicated.

/s/Sal H. Alfiero                                         /s/Ann M. Gray
Sal H. Alfiero, Director                                  Ann M. Gray, Director

/s/Jean S. Blackwell                                      /s/John E. Haire
Jean S. Blackwell, Director                               John E. Haire, Director

/s/Peter C. Browning                                      /s/Jerry J. Jasinowski
Peter C. Browning, Director                               Jerry J. Jasinowski, Director

/s/Arthur P. Byrne                                        /s/Thomas S. Johnson
Arthur P. Byrne, Director                                 Thomas S. Johnson, Director

/s/Sanford Cloud, Jr.                                     /s/Marilyn E. LaMarche
Sanford Cloud, Jr., Director                              Marilyn E. LaMarche, Director

/s/Richard N. Cooper                                      /s/Dona D. Young
Richard N. Cooper, Director                               Dona D. Young, Chairman

/s/Gordon J. Davis
Gordon J. Davis, Director


                                                      93





                            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders of
 The Phoenix Companies, Inc.:

We have completed an integrated audit of The Phoenix Companies, Inc.'s 2004 consolidated financial statements
and of its internal control over financial reporting as of December 31, 2004 and audits of its 2003 and 2002
consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Our opinions, based on our audits, are presented below.

Consolidated financial statements

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income
and comprehensive income, cash flows and changes in stockholders' equity present fairly, in all material
respects, the financial position of The Phoenix Companies, Inc. and its subsidiaries at December 31, 2004 and
2003, and the results of their operations and their cash flows for each of the three years in the period ended
December 31, 2004 in conformity with accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our audits of these statements in
accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit of financial statements includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting
for goodwill and other intangible assets in 2002.




                                                      F-1


To The Board of Directors and Stockholders of
 The Phoenix Companies, Inc.
Page 2

Internal control over financial reporting

Also, in our opinion, management's assessment, included in Management's Report on Internal Control Over
Financial Reporting appearing under Item 9A, that the Company maintained effective internal control over
financial reporting as of December 31, 2004 based on criteria established in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly
stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained,
in all material respects, effective internal control over financial reporting as of December 31, 2004, based on
criteria established in Internal Control - Integrated Framework issued by the COSO. The Company's management is
responsible for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting. Our responsibility is to express opinions on
management's assessment and on the effectiveness of the Company's internal control over financial reporting
based on our audit. We conducted our audit of internal control over financial reporting in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. An audit of internal control over financial
reporting includes obtaining an understanding of internal control over financial reporting, evaluating
management's assessment, testing and evaluating the design and operating effectiveness of internal control, and
performing such other procedures as we consider necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors
of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company's assets that could have a material effect on the financial
statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.


/s/PricewaterhouseCoopers LLP

Hartford, Connecticut
March 8, 2005


                                                      F-2

                                          THE PHOENIX COMPANIES, INC.
                                           Consolidated Balance Sheet
                                   ($ amounts in millions, except share data)
                                           December 31, 2004 and 2003

                                                                                       2004          2003
                                                                                  -------------  -------------
ASSETS:
Available-for-sale debt securities, at fair value..............................    $  13,476.3    $  13,273.0
Available-for-sale equity securities, at fair value............................          304.3          312.0
Trading equity securities, at fair value.......................................           87.3           --
Mortgage loans, at unpaid principal balances...................................          207.9          284.1
Venture capital partnerships, at equity in net assets..........................          255.3          234.9
Affiliate equity securities, at equity in net assets...........................           --             47.5
Policy loans, at unpaid principal balances.....................................        2,196.7        2,241.4
Other investments..............................................................          371.8          402.0
                                                                                  -------------  -------------
                                                                                      16,899.6       16,794.9
Available-for-sale debt and equity securities pledged as collateral, at
 fair value....................................................................        1,278.8        1,350.0
                                                                                  -------------  -------------
Total investments..............................................................       18,178.4       18,144.9
Cash and cash equivalents......................................................          435.0          447.9
Accrued investment income......................................................          222.3          222.3
Receivables....................................................................          135.8          224.9
Deferred policy acquisition costs..............................................        1,429.9        1,367.7
Deferred income taxes..........................................................           30.7           58.7
Intangible assets..............................................................          308.4          335.1
Goodwill.......................................................................          427.2          419.9
Other assets...................................................................          244.6          254.6
Separate account assets........................................................        6,950.3        6,083.2
                                                                                  -------------  -------------
Total assets...................................................................    $  28,362.6    $  27,559.2
                                                                                  =============  =============

LIABILITIES:
Policy liabilities and accruals................................................    $  13,132.3    $  13,088.6
Policyholder deposit funds.....................................................        3,492.4        3,642.7
Stock purchase contracts.......................................................          131.9          128.8
Indebtedness...................................................................          690.8          639.0
Other liabilities..............................................................          546.3          534.5
Non-recourse collateralized obligations........................................        1,355.2        1,472.0
Separate account liabilities...................................................        6,950.3        6,083.2
                                                                                  -------------  -------------
Total liabilities..............................................................       26,299.2       25,588.8
                                                                                  -------------  -------------

COMMITMENTS AND CONTINGENCIES (NOTES 16, 17 & 18)

MINORITY INTEREST:
Minority interest in net assets of consolidated subsidiaries...................           41.0           22.6
                                                                                  -------------  -------------

STOCKHOLDERS' EQUITY:
Common stock, $.01 par value: 106,394,959 and 106,376,363 shares issued........            1.0            1.0
Additional paid-in capital.....................................................        2,435.2        2,431.4
Deferred compensation on restricted stock units................................           (3.6)          (3.6)
Accumulated deficit............................................................         (285.6)        (355.3)
Accumulated other comprehensive income.........................................           58.0           63.7
Treasury stock, at cost: 11,517,387 and 11,930,647 shares......................         (182.6)        (189.4)
                                                                                  -------------  -------------
Total stockholders' equity.....................................................        2,022.4        1,947.8
                                                                                  -------------  -------------
Total liabilities, minority interest and stockholders' equity..................    $  28,362.6    $  27,559.2
                                                                                  =============  =============

The accompanying notes are an integral part of these financial statements.

                                                      F-3

                                          THE PHOENIX COMPANIES, INC.
                           Consolidated Statement of Income and Comprehensive Income
                                 ($ amounts in millions, except per share data)
                                  Years Ended December 31, 2004, 2003 and 2002

                                                                       2004            2003           2002
                                                                   -------------  -------------  -------------
REVENUES:

Premiums.........................................................   $     990.6    $   1,042.2    $   1,082.0
Insurance and investment product fees............................         534.9          500.9          493.8
Broker-dealer commission and distribution fee revenues...........          56.9           81.5           85.0
Investment income, net of expenses...............................       1,075.7        1,107.4          940.5
Unrealized gain on trading equity securities.....................          85.9           --             --
Net realized investment gains (losses)...........................          (0.8)         (98.5)        (133.9)
                                                                   -------------  -------------  -------------
Total revenues...................................................       2,743.2        2,633.5        2,467.4
                                                                   -------------  -------------  -------------

BENEFITS AND EXPENSES:
Policy benefits, excluding policyholder dividends................       1,422.2        1,454.0        1,436.1
Policyholder dividends...........................................         404.7          418.8          401.8
Policy acquisition cost amortization.............................         110.2           94.1           59.2
Intangible asset amortization....................................          33.8           33.2           98.8
Interest expense on indebtedness.................................          40.8           39.6           31.4
Interest expense on non-recourse collateralized obligations......          33.6           48.9           30.5
Other operating expenses.........................................         560.7          565.1          613.2
                                                                   -------------  -------------  -------------
Total benefits and expenses......................................       2,606.0        2,653.7        2,671.0
                                                                   -------------  -------------  -------------
Income (loss) from continuing operations before income taxes,
  minority interest, equity in earnings of affiliates and
    cumulative effect of accounting changes......................         137.2          (20.2)        (203.6)
Applicable income tax (benefit) expense..........................          40.5          (18.3)         (58.8)
                                                                   -------------  -------------  -------------
Income (loss) from continuing operations before minority
  interest, equity in earnings of affiliates and cumulative
  effect of accounting changes...................................          96.7           (1.9)        (144.8)
Minority interest in net income of consolidated subsidiaries.....          --             (0.4)          (0.5)
Equity in undistributed earnings (losses) of affiliates..........         (10.4)          (1.8)           4.6
                                                                   -------------  -------------  -------------
Income (loss) from continuing operations and
  before cumulative effect of accounting changes.................          86.3           (4.1)        (140.7)
Income (loss) from discontinued operations.......................           0.1           (2.1)          (1.3)
                                                                   -------------  -------------  -------------
Income (loss) before cumulative effect of accounting changes.....          86.4           (6.2)        (142.0)
Cumulative effect of accounting changes..........................          --             --           (130.3)
                                                                   -------------  -------------  -------------
Net income (loss)................................................   $      86.4    $      (6.2)   $    (272.3)
                                                                   =============  =============  =============

EARNINGS PER SHARE:
Earnings (loss) from continuing operations – basic...............   $      0.91    $     (0.04)   $     (1.44)
Earnings (loss) from continuing operations – diluted.............   $      0.86    $     (0.04)   $     (1.44)
                                                                   =============  =============  =============
Earnings (loss) before cumulative effect of accounting
  change – basic.................................................   $      0.91    $     (0.07)   $     (1.45)
Earnings (loss) before cumulative effect of accounting
  change – diluted...............................................   $      0.86    $     (0.07)   $     (1.45)
                                                                   =============  =============  =============
Net earnings (loss) – basic......................................   $      0.91    $     (0.07)   $     (2.78)
Net earnings (loss) – diluted....................................   $      0.86    $     (0.07)   $     (2.78)
                                                                   =============  =============  =============
Basic weighted-average common shares outstanding (in thousands)..        94,676         94,218         97,854
Diluted weighted-average common shares outstanding (in thousands)       100,775         94,218         97,854
                                                                   =============  =============  =============

COMPREHENSIVE INCOME:
Net income (loss)................................................   $      86.4    $      (6.2)   $    (272.3)
Other comprehensive income (loss)................................          (5.7)         135.2          (74.3)
                                                                   -------------  -------------  -------------
Comprehensive income (loss)......................................   $      80.7    $     129.0    $    (346.6)
                                                                   =============  =============  =============

The accompanying notes are an integral part of these financial statements.


                                                      F-4

                                          THE PHOENIX COMPANIES, INC.
                                      Consolidated Statement of Cash Flows
                                            ($ amounts in millions)
                                  Years Ended December 31, 2004, 2003 and 2002

                                                                       2004           2003           2002
                                                                   -------------  -------------  -------------
OPERATING ACTIVITIES:
Premiums collected...............................................   $     993.9    $   1,024.9    $   1,068.2
Insurance and investment product fees collected..................         601.2          592.2          597.5
Investment income collected......................................       1,002.1        1,026.2          954.7
Policy benefits paid, excluding policyholder dividends...........      (1,373.7)      (1,017.9)      (1,036.2)
Policyholder dividends paid......................................        (395.9)        (396.1)        (387.0)
Policy acquisition costs paid....................................        (164.7)        (205.5)        (217.0)
Interest expense on indebtedness paid............................         (37.3)         (36.5)         (32.6)
Interest expense on collateralized obligations paid..............         (33.6)         (48.9)         (30.5)
Other operating expenses paid....................................        (533.4)        (547.4)        (605.9)
Income taxes refunded............................................           0.5            6.6           12.3
                                                                   -------------  -------------  -------------
Cash from continuing operations..................................          59.1          397.6          323.5
Discontinued operations, net.....................................          14.9          (36.5)         (59.1)
                                                                   -------------  -------------  -------------
Cash from operating activities...................................          74.0          361.1          264.4
                                                                   -------------  -------------  -------------
INVESTING ACTIVITIES:
Investment purchases (Note 5)....................................      (4,163.9)      (5,630.0)      (4,977.3)
Investment sales, repayments and maturities (Note 5).............       4,220.7        4,417.2        3,418.6
Debt and equity securities pledged as collateral purchases.......         (17.2)         (56.9)        (891.6)
Debt and equity securities pledged as collateral sales...........          97.0          171.5           96.0
Subsidiary purchases.............................................         (36.9)         (23.4)        (136.1)
Subsidiary sales.................................................          17.1           --             --
Premises and equipment additions.................................          (9.3)         (17.6)         (15.7)
Premises and equipment disposals.................................          26.4           --             --
Discontinued operations, net.....................................           6.5           (4.4)          37.3
                                                                   -------------  -------------  -------------
Cash from (for) investing activities.............................         140.4       (1,143.6)      (2,468.8)
                                                                   -------------  -------------  -------------
FINANCING ACTIVITIES:
Policyholder deposit fund deposits ..............................         917.3        1,334.2        2,560.8
Policyholder deposit fund withdrawals............................      (1,067.6)      (1,087.2)        (911.2)
Stock purchase contracts proceeds................................          --             --            133.9
Equity units proceeds............................................          --             --            149.1
Other indebtedness proceeds......................................         196.6           --             --
Indebtedness repayments..........................................        (155.2)          --           (125.1)
Common stock purchases...........................................          --             --           (131.1)
Collateralized obligations proceeds..............................          --             --            841.6
Collateralized obligations repayments............................         (90.8)         (99.6)          --
Common stock dividends paid......................................         (15.1)         (15.1)         (15.8)
Minority interest distributions..................................         (12.5)         (12.4)         (10.6)
                                                                   -------------  -------------  -------------
Cash from (for) financing activities.............................        (227.3)         119.9        2,491.6
                                                                   -------------  -------------  -------------
Change in cash and cash equivalents..............................         (12.9)        (662.6)         287.2
Cash and cash equivalents, beginning of year.....................         447.9        1,110.5          823.3
                                                                   -------------  -------------  -------------
Cash and cash equivalents, end of year...........................   $     435.0    $     447.9    $   1,110.5
                                                                   =============  =============  =============

Included in cash and cash equivalents above is cash pledged as collateral of $61.0 million, $72.0 million, and
$57.0 million at December 31, 2004, 2003 and 2002, respectively.

Included in policy benefits paid for the 2004 period are a group of scheduled surrenders or withdrawals of
$184.2 million from a group of large corporate-owned life insurance policies.

The accompanying notes are an integral part of these financial statements.


                                                      F-5

                                          THE PHOENIX COMPANIES, INC.
                           Consolidated Statement of Changes in Stockholders' Equity
                                   ($ amounts in millions, except share data)
                                  Years Ended December 31, 2004, 2003 and 2002

                                                                       2004           2003           2002
                                                                   -------------  -------------  -------------

COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL:
Restricted stock units awarded as compensation
  (213,045; 701,598; and 573,477 units)..........................   $       2.6    $       5.1    $       8.0
Restricted stock units (161,768 units)...........................          --              1.5           --
Stock options awarded as compensation (566,070; and 572,504
  options).......................................................           1.0            0.4           --
Exercise of stock options (18,542 shares)........................           0.2           --             --
Income tax benefit...............................................          --             --              5.9
Present value of future contract adjustment payments on
  equity units...................................................          --             --             (2.8)

DEFERRED COMPENSATION ON RESTRICTED STOCK UNITS:
Compensation deferred on restricted stock units awarded..........          (1.9)          (5.0)          --
Compensation expense recognized – restricted stock units.........           1.9            1.4           --

RETAINED EARNINGS (ACCUMULATED DEFICIT):
Net income (loss)................................................          86.4           (6.2)        (272.3)
Common stock dividends declared ($0.16 per share)................         (15.1)         (15.1)         (15.8)
Excess of cost over fair value of common shares contributed to
  employee savings plan..........................................          (1.6)          (2.6)          --

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)....................          (5.7)         135.2          (74.3)

TREASURY STOCK:
Common shares purchased (7,871,500 shares).......................          --             --           (129.7)
Common shares contributed to employee savings plan
  (412,239 and 399,353 shares)...................................           6.8            6.3           --
                                                                   -------------  -------------  -------------
Change in stockholders' equity...................................          74.6          121.0         (481.0)
Stockholders' equity, beginning of year..........................       1,947.8        1,826.8        2,307.8
                                                                   -------------  -------------  -------------
Stockholders' equity, end of year................................   $   2,022.4    $   1,947.8    $   1,826.8
                                                                   =============  =============  =============

The accompanying notes are an integral part of these financial statements.



                                                      F-6

                                          THE PHOENIX COMPANIES, INC.
                                   Notes to Consolidated Financial Statements
                          ($ amounts in millions, except per share and per unit data)
                                  Years Ended December 31, 2004, 2003 and 2002

1.  Organization and Operations

Our consolidated financial statements include the accounts of The Phoenix Companies, Inc., its subsidiaries and
certain sponsored collateralized obligation trusts as described in Note 8. The Phoenix Companies, Inc. is a
holding company whose operations are conducted through subsidiaries, the principal ones of which are Phoenix
Life Insurance Company, or Phoenix Life, and Phoenix Investment Partners, Ltd., or Phoenix Investment Partners.
We have eliminated significant intercompany accounts and transactions in consolidating these financial
statements. We have reclassified certain amounts for 2003 and 2002 to conform with 2004 presentation.

We have prepared these financial statements in accordance with generally accepted accounting principles, or
GAAP. In preparing these financial statements in conformity with GAAP, we are required to make estimates and
assumptions that affect the reported amounts of assets and liabilities at reporting dates and the reported
amounts of revenues and expenses during the reporting periods. Actual results will differ from these estimates
and assumptions. We employ significant estimates and assumptions in the determination of deferred policy
acquisition costs; policyholder liabilities and accruals; the valuation of intangible assets; the valuation of
investments in debt and equity securities and venture capital partnerships; pension and other postemployment
benefits liabilities; and accruals for contingent liabilities. Significant accounting policies are presented
throughout the notes in italicized type.

Accounting changes

Share-Based Payment: On December 16, 2004 the Financial Accounting Standards Board, or the FASB, issued FASB
Statement No. 123 (revised 2004), Share-Based Payment, or SFAS 123(R), which requires that compensation cost
related to share-based payment transactions be recognized in financial statements at the fair value of the
instruments issued. While prior to the issuance of SFAS 123(R), recognition of such costs at fair value was
optional, we elected to do so for all share-based compensation that we awarded after December 31, 2002. We
anticipate adopting the provisions of SFAS 123(R) on a modified prospective basis effective July 1, 2005, which
will not have a material effect on our consolidated financial statements.

Goodwill and Other Intangible Assets: As of January 1, 2002, we adopted a new accounting standard for goodwill
and other intangible assets and recorded the cumulative effect of the adoption as a charge to earnings. We
describe the adoption of this standard further in Note 4.

Other-Than-Temporary Impairments: Portions of Emerging Issues Task Force Abstract EITF 03-1, The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments, or EITF 03-1, are effective for
fiscal periods beginning after June 15, 2004. EITF 03-1 provides guidance as to the determination of
other-than-temporary impaired securities and requires additional disclosures with respect to unrealized losses.
These accounting and disclosure requirements largely codify our existing practices and thus, are not
anticipated to have a material effect on our consolidated financial statements. The effective date of certain
portions of EITF 03-1 has been delayed pending further interpretive guidance. Because significant uncertainty
remains surrounding what form the guidance will ultimately take, we cannot predict what effect, if any,
adoption of the pending portions will have on our financial results.


                                                      F-7

Postretirement Benefits: On May 19, 2004, the FASB, issued FASB Staff Position No. FAS 106-2, Accounting and
Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003,
or the FSP. For employers that sponsor postretirement benefit plans, or plan sponsors that provide prescription
drug benefits to retirees, the FSP requires any effects of the anticipated federal tax subsidy related to those
drug benefits be treated as an actuarial gain. The effect of the FSP is not material to our consolidated
financial statements.

Nontraditional Long-Duration Contracts and Separate Accounts: Effective January 1, 2004, we adopted the AICPA's
Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional
Long-Duration Contracts and for Separate Accounts, or SOP 03-1. SOP 03-1 provides guidance related to the
accounting, reporting and disclosure of certain insurance contracts and separate accounts, including guidance
for computing reserves for products with guaranteed benefits such as guaranteed minimum death benefits and for
products with annuitization benefits such as guaranteed minimum income benefits. In addition, SOP 03-1
addresses the presentation and reporting of separate accounts, as well as rules concerning the capitalization
and amortization of sales inducements. Since this new accounting standard largely codifies certain accounting
and reserving practices related to applicable nontraditional long-duration contracts and separate accounts that
we already followed, our adoption did not have a material effect on our consolidated financial statements.

Effective July 1, 2003, we adopted SFAS No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity, or SFAS 150. The effect of our adoption was to reclassify the
mandatorily redeemable noncontrolling interests related to our asset management subsidiaries from "minority
interest" to "other liabilities" in our consolidated balance sheet. In addition, within our consolidated
statement of operations, we reclassified earnings attributed to those interests from the caption "minority
interest in net income of subsidiaries" to "other operating expenses". These changes in presentation were not
material to our consolidated financial statements.

Variable Interest Entities: In January 2003, a new accounting standard was issued, FASB Interpretation No. 46,
or FIN 46, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51, that interprets the
existing standards on consolidation. FIN 46 was subsequently reissued as FIN 46(R) in December 2003, with FIN
46(R) providing additional interpretation as to existing standards on consolidation. FIN 46(R) clarifies the
application of standards of consolidation to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to
finance its activities without additional subordinated financial support from other parties (variable interest
entities). Variable interest entities are required to be consolidated by their primary beneficiaries if they do
not effectively disperse risks among all parties involved. The primary beneficiary of a variable interest
entity is the party that absorbs a majority of the entity's expected losses, receives a majority of its
expected residual returns, or both, as a result of holding variable interests. As required under the original
standard, on February 1, 2003, we adopted the new standard for variable interest entities created after January
31, 2003 and for variable interest entities in which we obtained an interest after January 31, 2003. In
addition, as required by the revised standard, on December 31, 2003 we adopted FIN 46(R) for Special Purpose
Entities, or SPEs, in which we hold a variable interest that we acquired prior to February 1, 2003. The effect
of our adoption of the foregoing provisions of FIN 46(R) is described further in Note 8. FIN 46(R) requires our
application of its provisions to non-SPE variable interest entities for periods ending after March 15, 2004.
The adoption of FIN 46(R) for our non-SPE variable interest entities did not have a material effect on our
consolidated financial statements.

Stock-based Compensation: A new standard was issued by the FASB in 2002 which amends an existing standard on
accounting for stock-based compensation. The new standard provides methods of transition for a voluntary change
to fair value accounting for stock-based compensation. We adopted fair value accounting for stock-based
compensation in 2003 using the prospective method of transition provided by the new standard, which results in
expense recognition for stock options awarded after December 31, 2002.


                                                      F-8

Pro forma earnings and earnings per share, as if we had applied the fair value method of accounting for
stock-based compensation awarded prior to December 31, 2002, follow:

Pro Forma Results Related to Stock-based Compensation                          Year Ended December 31,
Awarded Prior to December 31, 2002:                                 -------------------------------------------
($ amounts in millions)                                                 2004           2003           2002
                                                                    -------------  -------------  -------------

Net income (loss), as reported...................................    $      86.4    $      (6.2)   $    (272.3)
Add: Employee stock option compensation expense included in net
  income (loss), net of applicable income taxes..................            0.7            0.4           --
Deduct: Employee stock option compensation expense determined
  under fair value accounting for all awards, net of applicable
  income taxes...................................................            5.2            5.0            6.5
                                                                    -------------  -------------  -------------
Pro forma net income (loss)......................................    $      81.9    $     (10.8)   $    (278.8)
                                                                    =============  =============  =============

 Basic earnings (loss) per share:
     As reported.................................................    $      0.91    $     (0.07)   $     (2.78)
     Pro forma...................................................    $      0.87    $     (0.11)   $     (2.85)
 Diluted earnings (loss) per share:
     As reported.................................................    $      0.86    $     (0.07)   $     (2.78)
     Pro forma...................................................    $      0.81    $     (0.11)   $     (2.85)

The weighted-average fair values of options granted during 2004, 2003 and 2002 were $4.24, $4.07 and $8.18 per
share, respectively, using the Black-Scholes option valuation model.

Valuation and related assumption information used for the options granted include these key variables:
weighted-average expected volatility, weighted-average risk-free interest rate and weighted-average common
share dividend yield.

See Note 11 for additional information related to stock-based compensation.

Business combinations and dispositions

On November 19, 2004, we received payment in full of a $27.5 million convertible subordinated note issued by
Aberdeen Asset Management PLC, or Aberdeen, a United Kingdom-based asset management company. Concurrently we
relinquished our contractual right to one of two Aberdeen board seats we held related to our 16.5% equity
interest in Aberdeen, at which point we concluded that in our judgment, we no longer had the ability to
significantly influence Aberdeen's operations. Accordingly, effective November 19, 2004, we changed our method
of accounting for our equity holdings in Aberdeen from the equity method of accounting to the fair value method
of accounting under SFAS No. 115, Accounting for Investments in Debt and Equity Securities. Based on our intent
to sell our equity holdings in Aberdeen in the near-term, we designated our equity holdings as trading
securities under the fair value method of accounting. Under the fair value method, the changes in fair value,
based on the underlying value of Aberdeen's shares as traded on the London Stock Exchange, as compared to our
carrying value under the equity method are presented as an after-tax realized investment gain of $55.1 million
in our consolidated statement of operations for the year ended December 31, 2004. In addition, our fourth
quarter and full year 2004 consolidated statement of operations includes a $14.7 million after-tax, non-cash
charge related to the accounting for our proportionate share of Aberdeen's December 2004 settlement of alleged
misselling activities with the United Kingdom's Financial Services Authority. This charge has been accounted
for by us under the equity method of accounting as it pre-dates our November 19, 2004 change in accounting for
Aberdeen from the equity method to the fair value method. On January 14, 2005, we closed the sale to third
parties of our equity holdings in Aberdeen for net proceeds of $70.4 million, resulting in an after-tax
realized investment loss of $7.0 million, which will be recognized as a realized investment loss in our first
quarter 2005 consolidated statement of operations. The January 2005 sale of our equity holdings in Aberdeen
completed our disposition of our direct financial interests in Aberdeen. See Note 5 to our consolidated
financial statements in this Form 10-K for more information on our holdings in Aberdeen.


                                                      F-9



On October 25, 2004, we entered into an agreement with Friends Provident plc, or Friends Provident, to sell our
12% interest in Lombard International Assurance S.A., or Lombard, and to relinquish $17.5 million in notes
receivable from Lombard's affiliate, Insurance Development Holdings A.G., or IDH. This transaction closed on
January 11, 2005 for consideration of $59.0 million and, under the terms of the sale, we may be entitled to
additional consideration, in the form of cash, based on Lombard's financial performance through 2006.

In July 2004, we sold the stock of Phoenix Global Solutions (India) Pvt. Ltd., our India-based information
technology subsidiary, and essentially all of the assets of its United States affiliate, Phoenix Global
Solutions, Inc., to Tata Consultancy Services Limited, a division of Tata Sons Ltd. This transaction is not
material to our consolidated financial statements.

Effective May 31, 2004, we sold our retail affiliated broker-dealer operations to Linsco/Private Ledger
Financial Services, or LPL. As part of the transaction, advisors affiliated with WS Griffith Securities, Inc.,
or Griffith, and Main Street Management Company, or Main Street, had the opportunity to move to LPL as
independent registered representatives. Revenues net of eliminations and direct expenses net of deferrals and
certain transaction related costs included in our consolidated financial statements related to our retail
affiliated broker-dealer operations sold during 2004 are as follows:

                                                                                    Year Ended December 31,
Revenues and Direct Expenses of                                                --------------------------------
Retail Affiliated Broker-Dealer Operations:                                        2004       2003       2002
($ amounts in millions)                                                        ----------  ---------- ---------
Insurance and investment product fee revenues, net of eliminations...........   $  32.0     $  60.8    $  61.8
Direct other operating expenses, net of deferrals............................   $  38.7     $  72.8    $  74.4

During 2004, we incurred a $3.6 million net after-tax charge for an impairment of goodwill related to Main
Street, offset by a $2.7 million after-tax gain on the sale of the retail affiliated broker-dealer operations.
Both the charge and the gain were recorded to realized investment gains and losses. In addition, we incurred a
$10.2 million net after-tax charge related to severance and lease termination costs, offset by a $4.4 million
after-tax gain related to curtailment accounting in connection with employee benefit plans.

In March 2004, we completed the sale of 100% of the common stock held by us in Phoenix National Trust Company.
The effect of this transaction is not material to our consolidated financial statements. Phoenix National Trust
Company is included as a discontinued operation in our consolidated financial statements for all periods
presented.

In March 2004, we acquired the remaining minority interests in Walnut Asset Management LLC and Rutherford Brown
& Catherwood, LLC for $2.1 million. This additional purchase price was accounted for as a step-acquisition by
Phoenix Investment Partners and was allocated to goodwill and definite-lived intangible assets, accordingly.

In 2002 we acquired a 60% equity interest in Kayne Anderson Rudnick, LLC, or Kayne Anderson Rudnick, for $102.4
million. This acquisition was accounted for using the purchase method under FASB Statement No. 141, Business
Combinations, or SFAS 141. In connection with this acquisition, the Acquisition Agreement and the related
Amended and Restated Operating Agreement resulted in the creation of mandatorily redeemable noncontrolling
interests, or noncontrolling interests, representing 40% of Kayne Anderson Rudnick's members' interests held by
certain of its members. Certain of these noncontrolling interests in Kayne Anderson Rudnick have scheduled
redemption dates (5% at each date) as of December 31, 2004, 2005, and 2006, at a price based upon operating
results of Kayne Anderson Rudnick for the year then ended. These 15% noncontrolling interests, as well as the
remaining 25% of Kayne Anderson Rudnick's noncontrolling interests, are mandatorily redeemable upon death of a
member and, as such, are included in other liabilities on our consolidated balance sheet and in our
consolidated statement of income as a part of other operating expenses in accordance with SFAS 150. Separate
agreements in connection with the 25% noncontrolling interests held by certain Kayne Anderson Rudnick's members
give the noncontrolling interest-holders the right to require Phoenix Investment Partners to redeem all or

                                                     F-10


a part of their noncontrolling interest at specified future dates and at a price determined based upon
operating results of Kayne Anderson Rudnick. Conversely, the terms of these agreements also give Phoenix
Investment Partners the right to redeem the outstanding minority interests at the same price as the
noncontrolling interest-holder may exercise its right to sell. These agreements may expire unexercised should
Kayne Anderson Rudnick's operating results decline from the initial measurement date.

In addition to the initial cost of the purchase of Kayne Anderson Rudnick in the first quarter of 2004, we made
a payment of $30.1 million in contingent consideration, which was based upon management fee revenues for the
purchased business through the end of 2003. Phoenix Investment Partners had accrued for this payment as of
December 31, 2003 and allocated it entirely to goodwill.

In January 2004, one member of Kayne Anderson Rudnick accelerated his portion of the 15% noncontrolling
interest redemption, at which time we acquired an additional 0.3% of the company. Phoenix Investment Partners
has accrued $11.4 million related to the remaining 4.9% redemption required as of December 31, 2004, has
accounted for this payment as a step-acquisition and has allocated the purchase price to goodwill and
definite-lived intangible assets, accordingly. The two remaining 4.9% noncontrolling interest redemptions will
be accounted for as step-acquisitions as the purchase price contingency resolves.

In 2003, we acquired the outstanding minority interests in PFG Holdings, Inc., or PFG, and Capital West Asset
Management, LLC, or Capital West. Additional information on these acquisitions can be found in Note 3 and Note
4, respectively.

2.  Business Segments

We are a manufacturer of insurance, annuity and asset management products for the accumulation, preservation
and transfer of wealth. We provide products and services to affluent and high-net-worth individuals through
their advisors and to institutions directly and through consultants. We offer a broad range of life insurance,
annuity and asset management products through a variety of distributors. These products are managed within two
operating segments — Life and Annuity and Asset Management. We report our remaining activities in two
non-operating segments — Venture Capital and Corporate and Other.

The Life and Annuity segment includes individual life insurance and annuity products including participating
whole life, universal life, variable life, term life and fixed and variable annuities. The Asset Management
segment includes private client and institutional investment management and distribution, including managed
accounts, open-end mutual funds and closed-end funds. We provide more information on the Life and Annuity and
Asset Management operating segments in Note 3 and Note 4, respectively.

The Venture Capital segment includes our equity share in the operating income and the realized and unrealized
investment gains of our venture capital partnership investments held in the general account of Phoenix Life,
but outside the closed block. We provide more information on this segment in Note 5. The Corporate and Other
segment includes all interest expense, as well as several smaller subsidiaries and investment activities which
do not meet the thresholds of reportable segments. These include international operations and the run-off of
our group pension and guaranteed investment contract businesses.

We evaluate segment performance on the basis of segment income. Realized investment gains and losses and some
non-recurring items are excluded because we do not consider them when evaluating the financial performance of
the segments. The size and timing of realized investment gains and losses are often subject to our discretion.
The non-recurring items are removed from segment after-tax operating income if, in our opinion, they are not
indicative of overall operating trends. While some of these items may be significant components of net income,
we believe that segment income is an appropriate measure that represents the earnings attributable to the
ongoing operations of the business.

                                                     F-11


The criteria used to identify an item that will be excluded from segment income include: whether the item is
infrequent and is material to the segment's income; or whether it results from a business restructuring, or a
change in regulatory requirements, or relates to other unusual circumstances (e.g., non-routine litigation). We
include information on other items allocated to our segments in their respective notes for information only.
Items excluded from segment income may vary from period to period. Because these items are excluded based on
our discretion, inconsistencies in the application of our selection criteria may exist. Segment income is not a
substitute for net income determined in accordance with GAAP and may be different from similarly titled
measures of other companies.

We allocate indebtedness and related interest expense to our Corporate and Other segment. We allocate capital
to our Life and Annuity segment based on risk-based capital, or RBC, for our insurance products. We used 300%
of RBC levels for the three years ended December 31, 2004. Capital within our life insurance companies that is
unallocated is included in our Corporate and Other segment. We allocate capital to our Asset Management segment
on the basis of the historical capital within that segment. We allocate net investment income based on the
assets allocated to the segments. We allocate certain costs and expenses to the segments based on a review of
the nature of the costs, time studies and other methodologies. Investment income on debt and equity securities
pledged as collateral as well as interest expense on non-recourse collateralized obligations, both related to
three consolidated collateralized obligation trusts we sponsor, are included in the Corporate and Other
segment. Excess investment income on debt and equity securities pledged as collateral represent investment
advisory fees earned by our asset management subsidiary and are allocated to the Asset Management segment as
investment product fees for segment reporting purposes only.

                                                                                       As of December 31,
                                                                                  -----------------------------
Segment Information on Assets:                                                        2004           2003
($ amounts in millions)                                                           -------------- --------------
Segment Assets
Life and annuity segment........................................................   $  25,117.0    $  24,219.5
Asset management segment........................................................         833.9          851.2
                                                                                  -------------- --------------
Operating segment assets........................................................      25,950.9       25,070.7
Venture capital segment.........................................................         202.9          196.3
Corporate and other segment.....................................................       2,185.8        2,264.0
                                                                                  -------------- --------------
Total segment assets............................................................      28,339.6       27,531.0
Net assets of discontinued operations (Note 14).................................          23.0           28.2
                                                                                  -------------- --------------
Total assets....................................................................   $  28,362.6    $  27,559.2
                                                                                  ============== ==============

                                                     F-12


                                                                            Year Ended December 31,
Segment Information on Revenues and Income:                       ---------------------------------------------
($ amounts in millions)                                               2004            2003           2002
                                                                  --------------  -------------- --------------

Life and annuity segment........................................   $   2,312.8     $   2,368.4    $   2,344.5
Asset management segment........................................         266.7           252.8          269.1
Elimination of inter-segment revenues...........................           5.9            (5.8)          (7.5)
                                                                  --------------  -------------- --------------
Operating segment revenues......................................       2,585.4         2,615.4        2,606.1
Venture capital segment.........................................          19.3            36.2          (59.3)
Corporate and other segment.....................................          53.4            80.4           54.5
                                                                  --------------  -------------- --------------
Total segment revenues..........................................       2,658.1         2,732.0        2,601.3
Unrealized gain on trading equity securities....................          85.9            --             --
Net realized investment gains (losses)..........................          (0.8)          (98.5)        (133.9)
                                                                  --------------  -------------- --------------
Total revenues..................................................   $   2,743.2     $   2,633.5    $   2,467.4
                                                                  ==============  ============== ==============

Segment Income (Loss)
Life and annuity segment........................................   $     142.8     $      99.4    $      80.3
Asset management segment........................................           0.1            (8.7)         (69.9)
                                                                  --------------  -------------- --------------
Operating segment pre-tax income................................         142.9            90.7           10.4
Venture capital segment.........................................          19.3            36.2          (59.3)
Corporate and other segment:
  Interest expense on indebtedness..............................         (40.8)          (39.6)         (31.4)
  Other.........................................................         (18.3)           (8.2)          (8.6)
                                                                  --------------  -------------- --------------
Total segment income (loss) before income taxes.................         103.1            79.1          (88.9)
Applicable income taxes (benefit)...............................          22.5            21.8          (28.5)
                                                                  --------------  -------------- --------------
Total segment income (loss).....................................          80.6            57.3          (60.4)
Income (loss) from discontinued operations......................           0.1            (2.1)          (1.3)
Net realized investment income (losses),
  net of income taxes and other offsets.........................          (7.2)            0.8          (65.6)
Unrealized gains (losses) on equity investment in Aberdeen,
  net of income taxes...........................................          55.9           (55.0)          --
Share of Aberdeen extraordinary charge for FSA settlement
  net of income taxes...........................................         (14.7)           --             --
Restructuring and early retirement costs, net of income taxes...         (21.9)           (8.5)         (28.5)
Surplus notes tender costs, net of income taxes.................          (6.4)           --             --
Other income, net of income taxes...............................          --               1.3           --
Deferred acquisition cost adjustment, net of income taxes.......          --              --             15.1
Demutualization related items, net of income taxes..............          --              --             (1.3)
Cumulative effect of accounting changes, net of income taxes....          --              --           (130.3)
                                                                  --------------  -------------- --------------
Net income (loss)...............................................   $      86.4     $      (6.2)   $    (272.3)
                                                                  ==============  ============== ==============

While revenues derived from outside of the United States are not material to our consolidated financial
statements, as of December 31, 2004 we had international investments, the principal ones of which are located
in the United Kingdom (Aberdeen 16.5% owned, Note 5) and Luxembourg (Lombard 12% owned, Note 5) and Argentina.

                                                     F-13


3.  Life and Annuity Segment

The Life and Annuity segment includes individual life insurance and annuity products of Phoenix Life and
certain of its subsidiaries and affiliates (together, our Life Companies), including universal life, variable
universal life, term life and fixed and variable annuities. It also includes the results of our closed block,
which consists primarily of participating whole life products. Segment information on assets, segment income
and deferred policy acquisition costs follows:

                                                                                          As of December 31,
Life and Annuity Segment Assets:                                                  -----------------------------
($ amounts in millions)                                                               2004           2003
                                                                                  -------------- --------------

Investments....................................................................    $  16,273.4    $  16,216.9
Cash and cash equivalents......................................................          255.2          250.5
Receivables....................................................................          222.2          228.1
Deferred policy acquisition costs..............................................        1,429.9        1,367.7
Deferred income taxes..........................................................           --             40.2
Goodwill and other intangible assets...........................................           10.2           15.3
Other general account assets...................................................          118.9          190.5
Separate accounts..............................................................        6,807.2        5,910.3
                                                                                  -------------- --------------
Total segment assets...........................................................    $  25,117.0    $  24,219.5
                                                                                  ============== ==============


                                                                                Year Ended December 31,
Life and Annuity Segment Income:                                         ---------------------------------------
($ amounts in millions)                                                      2004          2003        2002
                                                                         ------------  ------------ -----------

Premiums...............................................................   $   990.6     $ 1,042.2    $1,082.0
Insurance and investment product fees..................................       296.9         278.4       259.5
Broker-dealer commission and distribution fee revenues.................        28.8          54.6        55.6
Net investment income..................................................       996.5         993.2       947.4
                                                                         ------------  ------------ -----------
Total segment revenues.................................................     2,312.8       2,368.4     2,344.5
                                                                         ------------  ------------ -----------
Policy benefits, including policyholder dividends......................     1,814.8       1,869.9     1,867.6
Policy acquisition cost amortization...................................       110.6          98.2        88.5
Other operating expenses...............................................       244.6         300.5       307.5
                                                                         ------------  ------------ -----------
Total segment benefits and expenses....................................     2,170.0       2,268.6     2,263.6
                                                                         ------------  ------------ -----------
Segment income before income taxes and minority interest...............       142.8          99.8        80.9
Allocated income taxes.................................................        36.4          31.1        28.0
                                                                         ------------  ------------ -----------
Segment income before minority interest................................       106.4          68.7        52.9
Minority interest in segment income of consolidated subsidiaries.......        --             0.4         0.6
                                                                         ------------  ------------ -----------
Segment income.........................................................       106.4          68.3        52.3
Net realized investment losses, net of income taxes and other offsets..        (2.5)         (4.7)      (15.0)
Restructuring charges, net of income taxes.............................        (7.3)         (1.3)       --
Deferred acquisition cost adjustment, net of income taxes..............        --            --          15.1
                                                                         ------------  ------------ -----------
Segment net income.....................................................   $    96.6     $    62.3    $   52.4
                                                                         ============  ============ ===========

                                                     F-14


Premium and fee revenue and related expenses

Revenues for annuity and universal life products consist of net investment income and mortality, administration
and surrender charges assessed against the fund values during the period. Related benefit expenses include
universal life benefit claims in excess of fund values and net investment income credited to fund values. We
recognize premiums for participating life insurance products and other long-duration life insurance products as
revenue when due from policyholders. We recognize life insurance premiums for short-duration life insurance
products as premium revenue pro rata over the related contract periods. We match benefits, losses and related
expenses with premiums over the related contract periods.

                                                                            Year Ended December 31,
Life and Annuity Segment Revenues by Product:                     ---------------------------------------------
($ amounts in millions)                                               2004            2003           2002
                                                                  --------------  -------------- --------------
Premiums
Term life insurance.............................................   $      13.8     $      12.8    $      10.2
Other life insurance............................................          14.4            15.9           17.6
                                                                  --------------  -------------- --------------
Total, non-participating life insurance.........................          28.2            28.7           27.8
Participating life insurance....................................         962.4         1,013.5        1,054.2
                                                                  --------------  -------------- --------------
Total premiums..................................................         990.6         1,042.2        1,082.0
                                                                  --------------  -------------- --------------
Insurance and investment product fees
Variable universal life insurance...............................         111.2           109.1          102.0
Universal life insurance........................................         113.0            98.7           87.4
Other life insurance............................................           3.5             6.3            6.3
                                                                  --------------  -------------- --------------
Total, life insurance...........................................         227.7           214.1          195.7
Annuities.......................................................          69.2            64.3           63.8
                                                                  --------------  -------------- --------------
Total insurance and investment product fees.....................         296.9           278.4          259.5
Broker-dealer commission and distribution fee revenues..........          28.8            54.6           55.6
Net investment income...........................................         996.5           993.2          947.4
                                                                  --------------  -------------- --------------
Segment revenues................................................   $   2,312.8     $   2,368.4    $   2,344.5
                                                                  ==============  ============== ==============

Broker-dealer commissions are related to our retail affiliated broker-dealer operations, which we sold May 31,
2004 as further described in Note 1.

Reinsurance

We use reinsurance agreements to provide for greater diversification of business, allow us to control exposure
to potential losses arising from large risks and provide additional capacity for growth.

We recognize assets and liabilities related to reinsurance ceded contracts on a gross basis. The cost of
reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured
policies using assumptions consistent with those used to account for the underlying policies.

We remain liable to the extent that reinsuring companies may not be able to meet their obligations under
reinsurance agreements in effect. Failure of the reinsurers to honor their obligations could result in losses
to us; consequently, estimates are established for amounts deemed or estimated to be uncollectible. To minimize
our exposure to significant losses from reinsurance insolvencies, we evaluate the financial condition of our
reinsurers and monitor concentration of credit risk arising from similar geographic regions, activities, or
economic characteristics of the reinsurers.

                                                     F-15


Our reinsurance program varies based on the type of risk, for example:

    •   On direct policies, the maximum of individual life insurance retained by us on any one life is $10
        million for single life and joint first-to-die policies and $12 million for joint last-to-die policies,
        with excess amounts ceded to reinsurers.
    •   We reinsure 80% of the mortality risk on the in-force block of the Confederation Life Insurance
        Company, or Confederation Life, business we acquired in December 1997.
    •   We entered into two separate reinsurance agreements in 1998 and 1999 to reinsure 80% and 60%,
        respectively, of the mortality risk on a substantial portion of our otherwise retained individual life
        insurance business.
    •   We reinsure 80% to 90% of the mortality risk on certain new issues of term life insurance.
    •   We reinsure 100% of guaranteed minimum death benefits on a block of variable deferred annuities issued
        between January 1, 1996 through December 31, 1999, including subsequent deposits. We retain the
        guaranteed minimum death benefits risks on the remaining variable deferred annuities in force that are
        not covered by this reinsurance arrangement.
    •   We assume and cede business related to the group accident and health block in run-off. While we are not
        writing any new contracts, we are contractually obligated to assume and cede premiums related to
        existing contracts.

                                                                              Year Ended December 31,
Direct Business and Reinsurance in Continuing Operations:         ---------------------------------------------
($ amounts in millions)                                               2004            2003           2002
                                                                  --------------  -------------- --------------
Direct premiums.................................................   $   1,054.3     $   1,092.1    $   1,104.2
Premiums assumed from reinsureds................................           2.8            15.5           16.9
Premiums ceded to reinsurers....................................         (66.5)          (65.4)         (39.1)
                                                                  --------------  -------------- --------------
Premiums........................................................   $     990.6     $   1,042.2    $   1,082.0
                                                                  ==============  ============== ==============
Percentage of amount assumed to net premiums....................           0.3%            1.5%           1.6%
                                                                  ==============  ============== ==============

Direct policy benefits incurred.................................   $     416.3     $     402.9    $     357.5
Policy benefits assumed from reinsureds.........................           3.9            13.5           12.6
Policy benefits ceded to reinsurers.............................         (52.9)          (56.9)         (44.8)
                                                                  --------------  -------------- --------------
Policy benefits.................................................   $     367.3     $     359.5    $     325.3
                                                                  ==============  ============== ==============

Direct life insurance in force..................................   $ 126,367.9     $ 120,931.3    $ 110,529.8
Life insurance in force assumed from reinsureds.................       1,759.5         1,837.3        1,831.2
Life insurance in force ceded to reinsurers.....................     (80,040.1)      (77,222.3)     (74,575.2)
                                                                  --------------  -------------- --------------
Life insurance in force.........................................   $  48,087.3     $  45,546.3    $  37,785.8
                                                                  ==============  ============== ==============
Percentage of amount assumed to net insurance in force..........           3.7%            4.0%           4.8%
                                                                  ==============  ============== ==============

The policy benefit amounts above exclude changes in reserves, interest credited to policyholders, withdrawals
and policyholder dividends, which total $1,447.5 million, $1,510.4 million and $1,542.3 million, net of
reinsurance, for the years ended December 31, 2004, 2003 and 2002, respectively.

Irrevocable letters of credit aggregating $48.1 million at December 31, 2004 have been arranged with commercial
banks in our favor to collateralize the ceded reserves.

                                                     F-16


Business combinations and significant reinsurance assumed transaction

In 2003, we acquired the remaining interest in PFG, the holding company for our private placement operation,
for initial consideration of $16.7 million. Under the terms of the purchase agreement, we may be obligated to
pay additional consideration of up to $86.5 million to the selling shareholders, including $10.0 million during
2005 through 2007 based on certain financial performance targets being met, and the balance in 2008 based on
the appraised value of PFG as of December 31, 2007. During the year ended December 31, 2004, we paid $3.0
million under this obligation.

In July 2002, we acquired the variable life and variable annuity business of Valley Forge Life Insurance
Company (a subsidiary of CNA Financial Corporation), effective July 1, 2002. The business acquired had a total
account value of $557.0 million at June 30, 2002. This transaction was effected through a combination of
coinsurance and modified coinsurance.

Deferred policy acquisition costs

The costs of acquiring new business, principally commissions, underwriting, distribution and policy issue
expenses, all of which vary with and are primarily related to production of new business, are deferred. In
connection with our acquisitions of PFG (2003), we recognized an asset for the present value of future profits
representing the present value of estimated net cash flows embedded in the existing contracts acquired. This
asset is included in deferred acquisition costs.

We amortize deferred acquisition costs and present value of future profits based on the related policy's
classification. For individual participating life insurance policies, we amortize deferred acquisition costs
and present value of future profits in proportion to estimated gross margins. For universal life, variable
universal life and accumulation annuities, deferred acquisition costs and present value of future profits are
amortized in proportion to estimated gross profits. Policies may be surrendered for value or exchanged for a
different one of our products (internal replacement); the deferred acquisition costs balance associated with
the replaced or surrendered policies is amortized to reflect these surrenders.

The amortization process requires the use of various assumptions, estimates and judgments about the future. Our
primary assumptions relate to anticipated expenses, investment performance, mortality and contract
cancellations (i.e., lapses, withdrawals and surrenders). These assumptions, which we review on a regular
basis, are generally based on our past experience, industry studies, regulatory requirements and judgments
about the future. Changes in estimated gross margins and gross profits based on actual experiences are
reflected as an adjustment to total amortization to date resulting in a charge or credit to earnings. Finally,
we periodically assess whether there are sufficient gross margins or gross profits to amortize our remaining
deferred acquisition cost balances.


                                                     F-17


                                                                                    Year Ended December 31,
Deferred Policy Acquisition Costs:                                        -------------------------------------
($ amounts in millions)                                                        2004        2003         2002
                                                                          ------------ ----------- ------------

Acquisition costs deferred................................................ $   164.7    $  205.5    $   217.0
Acquisition costs recognized in:
  PFG minority interest acquisition.......................................      --           9.8         --
  Valley Forge Life reinsurance assumed transaction.......................      --          --           48.5
Costs amortized to expenses:
  Recurring costs related to segment income...............................    (110.6)      (98.2)       (88.5)
  (Cost) credit related to realized investment gains or losses (Note 5)...       0.4         4.1          7.2
  Change in actuarial assumption..........................................      --          --           22.1
Offsets to net unrealized investment gains or losses
  included in other comprehensive income (Note 12)........................       7.7        12.4        (95.9)
                                                                          ------------ ----------- ------------
Change in deferred policy acquisition costs...............................      62.2       133.6        110.4
Deferred policy acquisition costs, beginning of year......................   1,367.7     1,234.1      1,123.7
                                                                          ------------ ----------- ------------
Deferred policy acquisition costs, end of year............................ $ 1,429.9    $1,367.7    $ 1,234.1
                                                                          ============ =========== ============

In 2002, we revised the mortality assumptions used in the development of estimated gross margins for the
traditional participating block of business to reflect favorable experience. This revision resulted in a
decrease in deferred policy acquisition cost amortization of $22.1 million ($14.4 million after income taxes).
Also in 2002, we revised our long-term market return assumption for the variable annuity block of business from
8% to 7%. In addition, we recorded an impairment charge related to the recoverability of our deferred
acquisition cost asset related to the variable annuity business. The revision in long-term market return
assumption and the impairment charge resulted in a $13.5 million pre-tax ($8.8 million after income taxes)
increase in our policy acquisition cost amortization expense in the third quarter of 2002.

Policy liabilities and accruals

Future policy benefits are liabilities for life and annuity products. We establish liabilities in amounts
adequate to meet the estimated future obligations of policies in force. Future policy benefits for traditional
life insurance are computed using the net level premium method on the basis of actuarial assumptions as to
contractual guaranteed rates of interest, mortality rates guaranteed in calculating the cash surrender values
described in such contracts and morbidity. Future policy benefits for variable universal life, universal life
and annuities in the accumulation phase are computed using the deposit-method, which is the sum of the account
balance, unearned revenue liability and liability for minimum policy benefits. Future policy benefits for term
and annuities in the payout phase that have significant mortality risk are computed using the net premium
method on the basis of actuarial assumptions at the issue date of these contracts for rates of interest,
contract administrative expenses, mortality and surrenders. We establish liabilities for outstanding claims,
losses and loss adjustment expenses based on individual case estimates for reported losses and estimates of
unreported losses based on past experience.

Policyholder liabilities are primarily for participating life insurance policies and universal life insurance
policies. For universal life, this includes deposits received from customers and investment earnings on their
fund balances, which range from 4.0% to 6.0% as of December 31, 2004, less administrative and mortality
charges.

Certain of our annuity products contain guaranteed minimum death benefits. The guaranteed minimum death benefit
feature provides annuity contract holders with a guarantee that the benefit received at death will be no less
than a prescribed amount. This minimum amount is based on the net deposits paid into the contract, the net
deposits accumulated at a specified rate, the highest historical account value on a contract anniversary, or
more typically, the greatest of these values. As of December 31, 2004 and 2003, the difference between the
guaranteed minimum death benefit and the current account value (net amount at risk) for all existing contracts
was $123.5 million and $183.1 million, respectively, for which we had established reserves, net of reinsurance
recoverables, of $9.1 million and $7.6 million, respectively.

                                                     F-18


Participating life insurance

Participating life insurance in force was 35.6% and 38.8% of the face value of total individual life insurance
in force at December 31, 2004 and 2003, respectively.

Fair value of investment contracts

For purposes of fair value disclosures (Note 9), we determine the fair value of guaranteed interest contracts
by assuming a discount rate equal to the appropriate United States Treasury rate plus 150 basis points to
determine the present value of projected contractual liability payments through final maturity. We value the
fair value of deferred annuities and supplementary contracts without life contingencies with an interest
guarantee of one year or less at the amount of the policy reserve. In determining the fair value of deferred
annuities and supplementary contracts without life contingencies with interest guarantees greater than one
year, we use a discount rate equal to the appropriate United States Treasury rate plus 150 basis points to
determine the present value of the projected account value of the policy at the end of the current guarantee
period.

Deposit type funds, including pension deposit administration contracts, dividend accumulations, and other funds
left on deposit not involving life contingencies, have interest guarantees of less than one year for which
interest credited is closely tied to rates earned on owned assets. For these liabilities, we assume fair value
to be equal to the stated liability balances.

Policyholder deposit funds

Policyholder deposit funds primarily consist of annuity deposits received from customers, dividend
accumulations and investment earnings on their fund balances, which range from 1.8% to 12.3% as of December 31,
2004, less administrative charges.

Demutualization and Closed Block

In 1999, we began the process of reorganizing and demutualizing our then principal operating company, Phoenix
Home Life Mutual Insurance Company. We completed the process in June 2001, when all policyholder membership
interests in this company were extinguished and eligible policyholders of the company received shares of common
stock of The Phoenix Companies, Inc., together with cash and policy credits, as compensation. To protect the
future dividends of these policyholders, we established a closed block for their existing policies.

The closed block assets, including future assets from cash flows generated by the assets and premiums and other
revenues from the policies in the closed block, will benefit only holders of the policies in the closed block.
The principal cash flow items that affect the amount of closed block assets and liabilities are premiums, net
investment income, investment purchases and sales, policyholder benefits, policyholder dividends, premium taxes
and income taxes. The principal income and expense items excluded from the closed block are management and
maintenance expenses, commissions, investment income and realized investment gains and losses on investments
held outside the closed block that support the closed block business. All of these excluded income and expense
items enter into the determination of total gross margins of closed block policies for the purpose of
amortization of deferred policy acquisition costs.

In our financial statements, we present closed block assets, liabilities, revenues and expenses together with
all other assets, liabilities, revenues and expenses. Within closed block liabilities, we have established a
policyholder dividend obligation to record an additional liability to closed block policyholders for cumulative
closed block earnings in excess of expected amounts calculated at the date of demutualization. These closed
block earnings will not inure to stockholders, but will result in additional future dividends to closed block
policyholders unless otherwise offset by future performance of the closed block that is less favorable than
expected.

                                                     F-19



Because closed block liabilities exceed closed block assets, we have a net closed block liability at each
period-end. This net liability represents the maximum future earnings contribution to be recognized from the
closed block and the change in this net liability each period is in the earnings contribution recognized from
the closed block for the period. To the extent that actual cash flows differ from amounts anticipated, we may
adjust policyholder dividends. If the closed block has excess funds, those funds will be available only to the
closed block policyholders. However, if the closed block has insufficient funds to make policy benefit payments
that are guaranteed, the payments will be made from assets outside of the closed block.

                                                                          As of December 31,
Closed Block Assets and Liabilities:                              ------------------------------
($ amounts in millions)                                               2004            2003         Inception
                                                                  --------------  -------------- --------------

Debt securities.................................................   $   6,949.6     $   6,906.4    $   4,773.1
Equity securities...............................................          90.8            82.9           --
Mortgage loans..................................................         181.9           228.5          399.0
Venture capital partnerships....................................          52.4            38.6           --
Policy loans....................................................       1,363.4         1,386.8        1,380.0
Other invested assets...........................................          60.0            46.7           --
                                                                  --------------  -------------- --------------
Total closed block investments..................................       8,698.1         8,689.9        6,552.1
Cash and cash equivalents.......................................         100.5            40.5           --
Accrued investment income.......................................         118.8           120.2          106.8
Receivables.....................................................          32.7            43.0           35.2
Deferred income taxes...........................................         359.7           377.0          389.4
Other closed block assets.......................................          24.0            62.3            6.2
                                                                  --------------  -------------- --------------
Total closed block assets.......................................       9,333.8         9,332.9        7,089.7
                                                                  --------------  -------------- --------------
Policy liabilities and accruals.................................       9,686.9         9,723.1        8,301.7
Policyholder dividends payable..................................         365.5           369.8          325.1
Policyholder dividend obligation................................         535.9           519.2           --
Other closed block liabilities..................................          41.5            63.0           12.3
                                                                  --------------  -------------- --------------
Total closed block liabilities..................................      10,629.8        10,675.1        8,639.1
                                                                  --------------  -------------- --------------
Excess of closed block liabilities over closed block assets.....   $   1,296.0     $   1,342.2    $   1,549.4
                                                                  ==============  ============== ==============



                                                     F-20


Closed Block Revenues and Expenses and Changes in                           Cumulative        Year Ended December 31,
Policyholder Dividend Obligations:                                             From        -----------------------------
($ amounts in millions)                                                      Inception         2004           2003
                                                                           --------------  -------------- --------------
Closed block revenues
Premiums.................................................................   $   5,170.8     $     932.8    $   1,000.1
Net investment income ...................................................       2,771.2           560.0          573.1
Net realized investment losses...........................................         (91.1)           (2.0)          (9.4)
                                                                           --------------  -------------- --------------
Total revenues...........................................................       7,850.9         1,490.8        1,563.8
                                                                           --------------  -------------- --------------
Policy benefits, excluding dividends.....................................       5,367.6         1,007.1        1,058.0
Other operating expenses.................................................          57.9             8.9           10.0
                                                                           --------------  -------------- --------------
Total benefits and expenses, excluding policyholder dividends............       5,425.5         1,016.0        1,068.0
                                                                           --------------  -------------- --------------
Closed block contribution to income before dividends and income taxes....       2,425.4           474.8          495.8
Policyholder dividends...................................................       2,000.2           403.9          419.4
                                                                           --------------  -------------- --------------
Closed block contribution to income before income taxes..................         425.2            70.9           76.4
Applicable income taxes..................................................         149.3            24.7           26.8
                                                                           --------------  -------------- --------------
Closed block contribution to income......................................   $     275.9     $      46.2    $      49.6
                                                                           ==============  ============== ==============

Policyholder dividend obligation
Policyholder dividends provided through earnings.........................   $   2,045.4     $     403.9    $     419.4
Policyholder dividends provided through other comprehensive income.......         436.5             3.8          (45.5)
                                                                           --------------  -------------- --------------
Additions to policyholder dividend liabilities...........................       2,481.9           407.7          373.9
Policyholder dividends paid..............................................      (1,905.6)         (395.3)        (395.6)
                                                                           --------------  -------------- --------------
Change in policyholder dividend liabilities..............................         576.3            12.4          (21.7)
Policyholder dividend liabilities, beginning of period...................         325.1           889.0          910.7
                                                                           --------------  -------------- --------------
Policyholder dividend liabilities, end of period.........................         901.4           901.4          889.0
Less:  policyholder dividends payable, end of period.....................         365.5           365.5          369.8
                                                                           --------------  -------------- --------------
Policyholder dividend obligation, end of period..........................   $     535.9     $     535.9    $     519.2
                                                                            ==============  ============== ==============

In addition to the closed block assets, we hold assets outside the closed block in support of closed block
liabilities. We recognize investment earnings on these invested assets, less deferred policy acquisition cost
amortization and allocated expenses, as an additional source of earnings to our stockholders.


4.  Asset Management Segment

We conduct activities in Asset Management with a focus on two customer groups — private client and
institutional. Through our private client group, we provide asset management services principally on a
discretionary basis, with products consisting of open-end mutual funds, closed-end funds and managed accounts.
Managed accounts include intermediary programs sponsored and distributed by non-affiliated broker-dealers and
direct managed accounts which are sold and administered by us. Our private client business also provides
transfer agency, accounting and administrative services to our open-end mutual funds.

Through our institutional group, we provide discretionary and non-discretionary asset management services
primarily to corporations, multi-employer retirement funds and foundations, as well as to endowment and special
purpose funds. In addition, we manage alternative financial products, including structured finance products.
Structured finance products include collateralized obligations backed by portfolios of public high yield bonds,
commercial mortgage-backed and asset-backed securities or bank loans. See Note 8 for additional information.

We offer asset management services through our affiliated asset managers. We provide these affiliated asset
managers with a consolidated platform of distribution and administrative support, thereby allowing each manager
to devote a high degree of focus to investment management activities. On an ongoing basis, we monitor the
quality of the affiliates' products by assessing their performance, style consistency and the discipline with
which they apply their investment processes.


                                                     F-21


                                                                                         As of December 31,
Asset Management Segment Assets:                                                  -----------------------------
($ amounts in millions)                                                               2004           2003
                                                                                  -------------- --------------

Investments....................................................................    $      12.8    $      11.8
Cash and cash equivalents......................................................           50.0           39.6
Receivables....................................................................           34.2           36.0
Intangible assets..............................................................          308.4          335.1
Goodwill.......................................................................          416.9          408.1
Other assets...................................................................           11.6           20.6
                                                                                  -------------- --------------
Total segment assets...........................................................    $     833.9    $     851.2
                                                                                  ============== ==============


                                                                              Year Ended December 31,
Asset Management Segment Income:                                  ---------------------------------------------
($ amounts in millions)                                               2004            2003           2002
                                                                  --------------  -------------- --------------

Investment product fees.........................................   $     237.9     $     225.3    $     238.6
Broker-dealer commission and distribution fee revenues..........          28.0            26.8           29.5
Net investment income...........................................           0.8             0.7            1.0
                                                                  --------------  -------------- --------------
Total segment revenues..........................................         266.7           252.8          269.1
                                                                  --------------  -------------- --------------
Intangible asset amortization...................................          33.8            33.2           32.5
Intangible asset impairments....................................          --              --             66.3
Other operating expenses........................................         232.8           228.3          240.2
                                                                  --------------  -------------- --------------
Total segment expenses..........................................         266.6           261.5          339.0
                                                                  --------------  -------------- --------------
Segment income (loss) before income taxes.......................           0.1            (8.7)         (69.9)
Allocated income taxes (benefit)................................           2.3            (3.3)          (6.0)
                                                                  --------------  -------------- --------------
Segment loss....................................................          (2.2)           (5.4)         (63.9)
Net realized investment gains (losses), net of income taxes.....           1.8            (0.3)          --
Restructuring charges, net of income taxes......................          (1.2)           (4.0)          (8.4)
Cumulative effect of accounting change, net of income taxes.....          --              --           (119.9)
                                                                  --------------  -------------- --------------
Segment net loss................................................   $      (1.6)    $      (9.7)   $    (192.2)
                                                                  ==============  ============== ==============

In 2004, 2003 and 2002, our Asset Management segment incurred restructuring charges primarily in connection
with organizational and employment-related costs of $1.9 million ($1.2 million after-tax), $6.2 million ($4.0
million after-tax) and $12.9 million ($8.4 million after-tax), respectively.

Fee Revenues

Investment management fees and mutual fund ancillary fees included in investment product fees are recorded as
income during the period in which services are performed. Investment management fees are generally computed and
earned based upon a percentage of assets under management and are paid pursuant to the terms of the respective
investment management contracts, which generally require monthly or quarterly payment. Management fees
contingent upon achieving certain levels of performance are recorded when the contingencies are resolved.

Mutual fund ancillary fees consist of distribution fees, administrative fees, shareholder service agent fees,
fund accounting fees, dealer concessions and underwriter fees. Dealer concessions and underwriting fees earned
(net of related expenses) from the distribution and sale of affiliated mutual fund shares and other securities
are recorded on a trade date basis.

Business combinations

In 2001, we acquired a 65% interest in Capital West for $5.5 million. In June 2003, we acquired the remaining
interest in Capital West not already owned by us for $1.1 million. We have accounted for our acquisition of the
remaining interest as a step-purchase. We recorded $0.7 million for definite-lived investment management
contracts and assigned the remaining acquisition price of $1.0 million to goodwill.

                                                     F-22


In 2002, we acquired a 60% interest in Kayne Anderson Rudnick for $102.4 million as further described in Note
1. In addition to the initial cost of the purchase, we made a payment of $30.1 million in the first quarter of
2004 based upon growth in management fee revenue for the purchased business through 2003. We had fully accrued
for this estimated payment as of December 31, 2003 and have allocated it entirely to goodwill. In January 2004,
one member of Kayne Anderson Rudnick accelerated his portion of the 15% noncontrolling interest acquisitions,
at which time we acquired an additional 0.3% of the company. Phoenix Investment Partners has accrued $11.4
million related to the remaining 4.9% redemption required as of December 31, 2004, has accounted for this
payment as a step-acquisition and has allocated the purchase price to goodwill and definite-lived intangible
assets, accordingly. The two remaining 4.9% noncontrolling interest redemptions will be accounted for as
step-acquisitions as the purchase price contingency resolves. Related to the initial purchase in 2001, we
allocated $0.3 million of the initial purchase price to tangible net assets acquired and $102.1 million to
intangible assets ($58.3 million to investment management contracts and $43.8 million to goodwill). Kayne
Anderson Rudnick's results of operations for the period from January 30, 2002 through December 31, 2002 are
included in our results of operations for the year 2002.

The mandatorily redeemable noncontrolling interests in each of our less than wholly-owned asset management
subsidiaries are subject to certain agreements, which were executed at the time of acquisition, that may
provide for one or all of the following: (a) a contingent purchase price payment; (b) a requirement for Phoenix
Investment Partners to redeem a predetermined percentage of the outstanding noncontrolling membership interests
at predetermined future dates; and/or (c) agreements associated with the purchase of these subsidiaries'
noncontrolling membership interests that are subject to the occurrence of certain events. The redemption price
associated with each of these agreements is contingent upon the operating results of the respective subsidiary.
As additional redemptions of noncontrolling interests occur, the related payments are accounted for in
accordance with SFAS 141 as either contingent purchase price, or as a step-acquisition whereby the purchase
price is allocated to the portion of the assets acquired and the liabilities assumed based upon their
respective fair values, goodwill, and other intangible assets. For each type of agreement, the redemption price
is calculated similarly and is equal to (1) investment advisory fees, or growth in investment advisory fees, as
applicable, for the relevant year multiplied by an agreed upon multiple, multiplied by (2) the amount of
noncontrolling membership interest being purchased. The redemption price is determined within 60 days after
year-end and the payment is made within 60 days of the finalization of the price. There is no cap or floor on
the redemption price for any of the agreements. Notwithstanding (a), (b), and (c) above, these interests are
redeemable upon death of a member and, as such, are included in other liabilities on our consolidated balance
sheet and as earnings attributable to mandatorily redeemable noncontrolling interests as a part of other
operating expenses on our consolidated statement of income in accordance with SFAS 150. Earnings attributable
to mandatorily redeemable noncontrolling interests are not material to our consolidated financial statements.
We recorded $15.2 million and $34.5 million of additional redemption or purchase price in 2004 and 2003,
respectively, related to the redemption of noncontrolling membership interests that existed at the time of
acquisition with certain of our majority-owned subsidiaries.

Goodwill and other intangible assets

Effective January 1, 2002, we adopted the new accounting standard for goodwill and other intangible assets,
including amounts reflected in our carrying value of equity method investments. Under this new standard, we
discontinued recording amortization expense on goodwill and other intangible assets with indefinite lives, but
we continue recording amortization expense for those intangible assets with definite estimated lives. For
goodwill and indefinite-lived intangible assets, we perform impairment tests at the reporting-unit level at
least annually. To test for impairments, we calculate the fair value of each reporting unit based on the sum of
a multiple of revenue and the fair value of the unit's tangible net assets. We calculate the fair value of
definite-lived intangible assets based on their discounted cash flows. We compare the calculated fair value to
the recorded values and record an impairment, if warranted. Amortization expense for definite-lived intangible
assets is calculated on a straight-line basis.

                                                     F-23


Upon adoption of the new accounting standard, we recorded a before-tax cumulative effect charge of $141.7
million to reduce the carrying value of goodwill and other intangible assets with indefinite lives to fair
value, of which $131.3 million pertained to our Asset Management segment and $10.4 million pertained to an
international equity investment in our Corporate and Other segment (Note 5). After applicable income tax
benefits, the charge reduced earnings by $130.3 million or $1.33 per share. In the third quarter of 2002, we
performed an impairment test at the Asset Management segment reporting-unit level and recorded a before-tax
charge of $66.3 million to further reduce the carrying value of goodwill and other intangible assets.

Asset management segment intangible assets and goodwill
                                                                                        As of December 31,
Carrying Amounts of Intangible Assets and Goodwill:                               -----------------------------
($ amounts in millions)                                                               2004           2003
                                                                                  -------------- --------------

Asset management contracts with definite lives.................................    $     401.2    $     396.1
Less: accumulated amortization.................................................          166.1          134.3
                                                                                  -------------- --------------
Intangible assets with definite lives..........................................          235.1          261.8
Asset management contracts with indefinite lives...............................           73.3           73.3
                                                                                  -------------- --------------
Intangible assets..............................................................    $     308.4    $     335.1
                                                                                  ============== ==============

Goodwill.......................................................................    $     416.9    $     408.1
                                                                                  ============== ==============


                                                                                      Year Ended December 31,
Activity in Intangible Assets and Goodwill:                                       -----------------------------
($ amounts in millions)                                                               2004           2003
                                                                                  -------------- --------------
Intangible assets
Asset purchases................................................................    $       7.1    $       3.3
Asset amortization.............................................................          (33.8)         (33.2)
                                                                                  -------------- --------------
Change in intangible assets....................................................          (26.7)         (29.9)
Balance, beginning of period...................................................          335.1          365.0
                                                                                  -------------- --------------
Balance, end of period.........................................................    $     308.4    $     335.1
                                                                                  ============== ==============

Goodwill
Goodwill acquired..............................................................    $       8.8    $      32.5
Balance, beginning of period...................................................          408.1          375.6
                                                                                  -------------- --------------
Balance, end of period.........................................................    $     416.9    $     408.1
                                                                                  ============== ==============

The estimated aggregate intangible asset amortization expense in future periods includes: 2005, $32.9 million;
2006, $28.7 million; 2007, $28.0 million; 2008, $27.7 million; 2009, $26.5 million and thereafter, $91.3
million. At December 31, 2004, the weighted-average amortization period for definite-lived intangible assets is
eight years.


5.  Investing Activities

Debt and equity securities

Our debt and equity securities classified as available-for-sale are reported in our balance sheet at fair
value. Trading securities are carried at fair value and changes in fair value are recorded in net income as
they occur. Fair value is based on quoted market price, where available. When quoted market prices are not
available, we estimate fair value by discounting debt security cash flows to reflect interest rates currently
being offered on similar terms to borrowers of similar credit quality (private placement debt securities), by
quoted market prices of comparable instruments (untraded public debt securities) and by independent pricing
sources or internally developed pricing models (equity securities).

                                                     F-24


For mortgage-backed and other asset-backed debt securities, we recognize income using a constant effective
yield based on anticipated prepayments and the estimated economic lives of the securities. When actual
prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect
actual payments to date and any resulting adjustment is included in net investment income. For certain
asset-backed securities, changes in estimated yield are recorded on a prospective basis and specific valuation
methods are applied to these securities to determine if there has been an other-than-temporary decline in
value.

See Note 8 for information on available-for-sale debt and equity securities pledged as collateral.

                                                                        As of December 31,
Fair Value and Cost of Debt and Equity Securities:  -----------------------------------------------------------
($ amounts in millions)                                         2004                          2003
                                                    ----------------------------- -----------------------------
                                                      Fair Value        Cost        Fair Value        Cost
                                                    -------------- -------------- -------------- --------------

United States government and agency................  $     679.1    $     625.4    $     757.0    $     714.5
State and political subdivision....................        446.5          413.7          510.3          468.4
Foreign government.................................        314.8          284.0          260.4          239.0
Corporate..........................................      7,365.4        7,040.7        6,765.8        6,412.4
Mortgage-backed....................................      3,253.4        3,122.9        3,097.5        2,963.4
Other asset-backed.................................      1,417.1        1,405.0        1,882.0        1,863.6
                                                    -------------- -------------- -------------- --------------
Debt securities....................................  $  13,476.3    $  12,891.7    $  13,273.0    $  12,661.3
                                                    ============== ============== ============== ==============

Amounts applicable to the closed block.............  $   6,949.6    $   6,515.2    $   6,906.4    $   6,471.1
                                                    ============== ============== ============== ==============

Hilb Rogal and Hobbs, or HRH, common stock.........  $     131.3    $      42.1    $     116.2    $      42.2
Lombard International Assurance, S.A...............         43.3           43.3           41.1           41.1
Other equity securities............................        129.7          113.9          154.7          139.1
                                                    -------------- -------------- -------------- --------------
Equity securities..................................  $     304.3    $     199.3    $     312.0    $     222.4
                                                    ============== ============== ============== ==============

Amounts applicable to the closed block.............  $      90.8    $      78.3    $      82.9    $      75.0
                                                    ============== ============== ============== ==============

Our holdings in HRH common stock as of December 31, 2004 are pledged for use in November 2005 to settle certain
stock purchase contracts issued by us. Upon settlement of such stock purchase contracts, we will recognize a
gross investment gain of $91.8 million ($32.4 million net of offsets for applicable deferred acquisition costs
and deferred income taxes). See Note 6 for additional information.

In January 1005, we sold our equity investment in Lombard as further described in Note 1.

In 2003, we sold our 3.0% and 3.1% equity interests in two life insurance subsidiaries of General Electric
Company for $72.0 million and realized a gain of $21.6 million ($14.0 million after income taxes). Also in
2003, we sold our 9.3% equity interest in PXRE Group Ltd., a property catastrophe reinsurer, for $23.1 million
and realized a gain of $13.7 million ($8.9 million after income taxes).

                                                     F-25


                                                                        As of December 31,
Unrealized Gains and Losses from                   ------------------------------------------------------------
General Account Securities:                                    2004                           2003
($ amounts in millions)                            -----------------------------  -----------------------------
                                                        Gains         Losses           Gains         Losses
                                                   -------------- --------------  -------------- --------------

United States government and agency.............    $      55.4    $      (1.7)    $      44.0    $      (1.5)
State and political subdivision.................           34.4           (1.6)           43.5           (1.6)
Foreign government..............................           31.1           (0.3)           23.2           (1.8)
Corporate.......................................          364.2          (39.5)          400.4          (47.0)
Mortgage-backed.................................          137.0           (6.5)          143.4           (9.3)
Other asset-backed..............................           32.4          (20.3)           55.6          (37.2)
                                                   -------------- --------------  -------------- --------------
Debt securities gains and losses................    $     654.5    $     (69.9)    $     710.1    $     (98.4)
                                                   ============== ==============  ============== ==============
Debt securities net gains.......................    $     584.6                    $     611.7
                                                   ==============                 ==============

Hilb Rogal and Hobbs, or HRH, common stock......    $      89.2    $      --       $      74.0    $      --
Other equity securities.........................           19.1           (3.3)           17.4           (1.8)
                                                   -------------- --------------  -------------- --------------
Equity securities gains and losses..............    $     108.3    $      (3.3)    $      91.4    $      (1.8)
                                                   ============== ==============  ============== ==============
Equity securities net gains.....................    $     105.0                    $      89.6
                                                   ==============                 ==============


                                                                 As of December 31, 2004
Aging of Temporarily Impaired            ----------------------------------------------------------------------
Debt and Equity Securities:                 Less than 12 months   Greater than 12 months         Total
($ amounts in millions)                  ------------------------ ---------------------- ----------------------
                                            Fair       Unrealized    Fair     Unrealized     Fair    Unrealized
                                            Value        Losses      Value      Losses       Value     Losses
                                         ------------ ----------- ---------- ----------- ----------- ----------
Debt Securities
United States government and agency.....  $    85.6    $   (1.4)   $    4.9   $   (0.3)   $    90.5   $  (1.7)
State and political subdivision.........       41.6        (1.2)        9.0       (0.4)        50.6      (1.6)
Foreign government......................       --          --          10.6       (0.3)        10.6      (0.3)
Corporate...............................    1,212.6       (16.1)      418.8      (23.4)     1,631.4     (39.5)
Mortgage-backed.........................      589.4        (4.8)      113.6       (1.7)       703.0      (6.5)
Other asset-backed......................      444.6        (5.3)       96.8      (15.0)       541.4     (20.3)
                                         ------------ ----------- ---------- ----------- ----------- ----------
Debt securities.........................  $ 2,373.8    $  (28.8)   $  653.7   $  (41.1)   $ 3,027.5   $ (69.9)
Common stock............................       15.3        (2.4)        5.4       (0.9)        20.7      (3.3)
                                         ------------ ----------- ---------- ----------- ----------- ----------
Total temporarily impaired securities...  $ 2,389.1    $  (31.2)   $  659.1   $  (42.0)   $ 3,048.2   $ (73.2)
                                         ============ =========== ========== =========== =========== ==========

Amounts inside the closed block.........  $   702.0    $  (10.7)   $  347.9   $  (16.2)   $ 1,049.9   $ (26.9)
                                         ============ =========== ========== =========== =========== ==========

Amounts outside the closed block........  $ 1,687.1    $  (20.5)   $  311.2   $  (25.8)   $ 1,998.3   $ (46.3)
                                         ============ =========== ========== =========== =========== ==========

Amounts outside the closed block
  that are below investment grade.......  $    66.8    $   (2.2)   $   68.3   $  (12.2)   $   135.1   $ (14.4)
                                         ============ =========== ========== =========== =========== ==========
After offsets for deferred acquisition                 $   (0.8)              $   (4.5)               $  (5.3)
  cost adjustment and taxes.............               ==========            ===========             ==========

The securities with gross unrealized losses are considered to be temporarily impaired at December 31, 2004 as
each of these securities has performed, and is expected to continue to perform, in accordance with their
original contractual terms.

Mortgage loans

We report mortgage loans at unpaid principal balances, net of valuation reserves on impaired mortgages. We
consider a mortgage loan to be impaired if we believe it is probable that we will be unable to collect all
amounts of contractual interest and principal as scheduled in the loan agreement. We do not accrue interest
income on impaired mortgage loans when the likelihood of collection is doubtful.

                                                     F-26


For purpose of fair value disclosures (Note 9), we estimate the fair value of mortgage loans by discounting the
present value of scheduled loan payments. We base the discount rate on the comparable United States Treasury
rates for loan durations plus spreads of 130 to 800 basis points, depending on our internal quality ratings of
the loans. For in-process-of-foreclosure or defaulted loans, we estimate fair value as the lower of the
underlying collateral value or the loan balance.

Mortgage loans are collateralized by the related properties and are generally no greater than 75% of the
properties' value at the time the loans are originated.

                                                                          As of December 31,
Carrying Values of  Investments in Mortgage Loans: ------------------------------------------------------------
($ amounts in millions)                                        2004                           2003
                                                   -----------------------------  -----------------------------
                                                     Carrying                       Carrying
                                                       Value       Fair Value         Value       Fair Value
                                                   -------------- --------------  -------------- --------------
Property type
Apartment buildings...............................  $      81.8    $      82.8     $     105.1    $     106.7
Office buildings..................................         18.0           18.2            49.0           49.7
Retail stores.....................................         92.5           93.6           109.0          110.7
Industrial buildings..............................         25.4           25.7            33.7           34.2
Other.............................................          0.1            0.1             0.1            0.1
                                                   -------------- --------------  -------------- --------------
Subtotal..........................................        217.8          220.4           296.9          301.4
Less: valuation allowances........................          9.9           --              12.8           --
                                                   -------------- --------------  -------------- --------------
Mortgage loans....................................  $     207.9    $     220.4     $     284.1    $     301.4
                                                   ============== ==============  ============== ==============

Amounts applicable to the closed block............  $     181.9    $     184.1     $     228.5    $     242.4
                                                   ============== ==============  ============== ==============

We had no delinquent or in-process-of-foreclosure mortgage loans as of both December 31, 2004 and 2003. The
carrying values of mortgage loans on which the payment terms have been restructured or modified were $12.9
million and $25.8 million as of December 31, 2004 and 2003, respectively. We have provided valuation allowances
for restructured or modified mortgage loans.

                                                                             Year Ended December 31,
Mortgage Loan Valuation Allowance Activity:                       ---------------------------------------------
($ amounts in millions)                                                2004            2003           2002
                                                                  --------------  -------------- --------------

Valuation allowance, beginning of year..........................   $      12.8     $      15.5    $      15.0
Additions charged to income.....................................          --               0.8            0.6
Deductions for write-offs and disposals.........................          (2.9)           (3.5)          (0.1)
                                                                  --------------  -------------- --------------
Valuation allowance, end of year................................   $       9.9     $      12.8    $      15.5
                                                                  ==============  ============== ==============

During the three years ended December 31, 2004, the amount of interest that was foregone due to the
restructuring of mortgage loans and to non-income producing loans is not material to our consolidated financial
statements. Refinancing of mortgage loans was not material in any of the three years ended December 31, 2004.

Venture capital partnerships

We invest as a limited partner in venture capital limited partnerships. Generally, these partnerships focus on
early-stage ventures, primarily in the information technology and life science industries and leveraged buyout
funds. We also have direct equity investments in leveraged buyouts and corporate acquisitions.

We record our equity in the earnings of venture capital partnerships in net investment income using the most
recent financial information received from the partnerships and estimating the change in our share of
partnership earnings for the quarter to eliminate any lag in reporting.

                                                     F-27


To estimate the net equity in earnings of the venture capital partnerships for each quarter, we developed a
methodology to estimate the change in value of the underlying investee companies in the venture capital
partnerships. For public investee companies, we used quoted market prices at the end of each quarter, applying
liquidity discounts to these prices in instances where such discounts were applied in the underlying
partnerships' financial statements. For private investee companies, we applied a public industry sector index
to estimate changes in valuations each quarter. We apply this methodology consistently each quarter with
subsequent adjustments to reflect market events reported by the partnerships (e.g., new rounds of financing,
initial public offerings and writedowns by the general partners). Our methodology recognizes both downward and
upward adjustments in estimated values based on the indices, but when the general partner reduces the value of
a private investee company, we do not adjust the fair value upward (by applying the public sector index) in
excess of the most recent value reported by the general partner. Finally, we revise the valuations we have
assigned to the investee companies annually to reflect the valuations in the audited financial statements
received from the venture capital partnerships.

                                                                                  Year Ended December 31,
Components of Net Investment Income Related to                              -----------------------------------
Venture Capital Partnerships:                                                  2004         2003        2002
($ amounts in millions)                                                     ----------  ----------- -----------
Net realized gains (losses) on partnership cash and stock distributions..    $  13.7     $   17.4    $   (4.7)
Net unrealized gains (losses) on partnership investments.................       14.4         38.2       (47.2)
Partnership operating expenses...........................................       (2.6)        (6.6)       (7.4)
                                                                            ----------  ----------- -----------
Net investment income (loss).............................................    $  25.5     $   49.0    $  (59.3)
                                                                            ==========  =========== ===========

Amounts applicable to the closed block...................................    $   6.2     $   12.8    $   --
                                                                            ==========  =========== ===========
Amounts applicable to the venture capital segment........................    $  19.3     $   36.2    $  (59.3)
                                                                            ==========  =========== ===========

As indicated above, we record our equity in earnings of venture capital partnerships based on the most recent
financial information and by estimating the earnings for any lag in partnership reporting. As a result, the
effect of our adjusting our estimates to actual results reflected in partnership financial statements was to
increase net investment income as follows:

                                                                             Year Ended December 31,
Adjustment of Venture Capital Investment Income Related to        ---------------------------------------------
Receipt of Financial Statements                                       2004            2003           2002
($ amounts in millions)                                           --------------  -------------- --------------
Closed block....................................................   $       1.0     $      --      $      --
Venture capital segment.........................................           6.8            33.4           12.8
                                                                  --------------  -------------- --------------
Total...........................................................   $       7.8     $      33.4    $      12.8
                                                                  ==============  ============== ==============


                                                                            Year Ended December 31,
Investment Activity in Venture Capital Partnerships:              ---------------------------------------------
($ amounts in millions)                                               2004            2003           2002
                                                                  --------------  -------------- --------------

Contributions...................................................   $      59.2     $      41.3    $      43.0
Equity in earnings (losses) of partnerships.....................          25.5            49.0          (59.3)
Distributions...................................................         (64.3)          (43.6)         (41.7)
Proceeds from sale of partnership interests.....................          --             (26.1)          --
Realized loss on sale of partnership interests..................          --             (14.3)          (5.1)
                                                                  --------------  -------------- --------------
Change in venture capital partnerships..........................          20.4             6.3          (63.1)
Venture capital partnership investments, beginning of period....         234.9           228.6          291.7
                                                                  --------------  -------------- --------------
Venture capital partnership investments, end of period..........   $     255.3     $     234.9    $     228.6
                                                                  ==============  ============== ==============

                                                     F-28


                                                                                        As of December 31,
Unfunded Commitments and Investments in Venture Capital Partnerships:             -----------------------------
($ amounts in millions)                                                                2004           2003
                                                                                  -------------- --------------
Unfunded commitments
Closed block..................................................................     $      83.0    $      48.3
Venture capital segment.......................................................            53.5           76.7
                                                                                  -------------- --------------
Total unfunded commitments....................................................     $     136.5    $     125.0
                                                                                  ============== ==============

Venture capital partnerships
Closed block..................................................................     $      52.4    $      38.6
Venture capital segment.......................................................           202.9          196.3
                                                                                  -------------- --------------
Total venture capital partnerships............................................     $     255.3    $     234.9
                                                                                  ============== ==============

In February 2003, we sold a 50% interest in certain of our venture capital partnerships to an outside party and
transferred the remaining 50% interest to our closed block. The carrying value of the partnerships sold and
transferred totaled $52.2 million after realizing a loss of $5.1 million in 2002 and $14.3 million in 2003 to
reflect the proceeds received.

Affiliate equity securities

Our investments in affiliate equity securities represent investments in operating entities in which we own less
than a majority of the outstanding common stock and where we exercise significant influence over the operating
and financial policies of the companies. We use the equity method of accounting for our investments in common
stock of these affiliates. We evaluate our equity method investments for an other-than-temporary impairment at
each balance sheet date considering quantitative and qualitative factors including quoted market price of
underlying equity securities, the duration the carrying value is in excess of fair value and historical and
projected earnings and cash flow capacity.

                                                                                        As of December 31,
Carrying Value and Cost of Affiliate Securities:                                  -----------------------------
($ amounts in millions)                                                                       2003
                                                                                  -----------------------------
                                                                                    Carrying
                                                                                      Value          Cost
                                                                                  -------------- --------------

Aberdeen common stock..........................................................    $      38.3    $      20.0
Other..........................................................................            9.2           18.9
                                                                                  -------------- --------------
Affiliate equity securities....................................................    $      47.5    $      38.9
                                                                                  ============== ==============

The cost basis of Aberdeen common stock is adjusted to reflect an other-than-temporary impairment of $89.1
million, which we recognized as a realized investment loss in 2003.

                                                                        For the Years Ended December 31,
Sources of Earnings from Affiliate Securities:                    ---------------------------------------------
($ amounts in millions)                                               2004            2003           2002
                                                                  --------------  -------------- --------------

Aberdeen common stock dividends.................................   $       3.0     $       2.7    $       3.8
Equity in Aberdeen undistributed income (loss)..................         (21.9)           (2.0)           2.3
HRH common stock dividends......................................          --              --              0.5
Equity in HRH undistributed income..............................          --              --              2.5
Other...........................................................           1.7            (2.7)          (3.2)
                                                                  --------------  -------------- --------------
Affiliate equity securities investment income (loss)............   $     (17.2)    $      (2.0)   $       5.9
                                                                  ==============  ============== ==============

Aberdeen convertible notes and bonds............................   $       2.0     $       2.5    $       3.8
Aberdeen 5.875% convertible notes...............................          --               0.1            1.3
                                                                  --------------  -------------- --------------
Affiliate debt securities investment income.....................   $       2.0     $       2.6    $       5.1
                                                                  ==============  ============== ==============

                                                     F-29


Aberdeen. As of December 31, 2004 and 2003, we owned 38.1 million shares of Aberdeen common stock, which
represented 16.5% of its outstanding common shares. We acquired these shares between 1996 and 2001 at a total
cost of $109.1 million, which, through November 18, 2004, we accounted for under the equity method of
accounting based on our ability to significantly influence Aberdeen's operations.

During the second quarter of 2003, we recorded a non-cash realized investment loss of $89.1 million ($55.0
million after income taxes) related to an other-than-temporary impairment of our equity investment in Aberdeen.
In addition, as of December 31, 2003 we owned $27.5 million in Aberdeen convertible subordinated notes which
were repaid in full to us on November 19, 2004. Concurrent with this paydown, we relinquished our contractual
right to one of two Aberdeen board seats held related to our 16.5% equity interest in Aberdeen at which point
we concluded that in our judgment, we no longer had the ability to significantly influence Aberdeen's
operations. Accordingly, effective November 19, 2004, we changed our method of accounting for our equity
holdings in Aberdeen from the equity method of accounting to the fair value method of accounting under SFAS No.
115, Accounting for Certain Investments in Debt and Equity Securities. Based on our intent to sell our equity
holdings in Aberdeen in the near-term, we designated our equity holdings as trading securities under the fair
value method of accounting. Under the fair value method, the changes in fair value, based on the underlying
value of Aberdeen's shares as traded on the London Stock Exchange, as compared to our carrying under the equity
method are presented as an after-tax realized investment gain of $55.1 million in our consolidated statement of
operations for the year ended December 31, 2004. In addition, our fourth quarter and full year 2004
consolidated statement of operations includes a $14.7 million after-tax, non-cash charge related to the
accounting for our proportionate share of Aberdeen's December 2004 settlement of alleged misselling activities
with the United Kingdom's Financial Services Authority. This charge has been accounted for by us under the
equity method of accounting as it pre-dates our November 19, 2004 change in accounting for Aberdeen from the
equity method to the fair value method.

                                                                              Year Ended December 31,
After-tax Effect of Equity Interest in Aberdeen:                  ---------------------------------------------
($ amounts in millions)                                               2004            2003           2002
                                                                  --------------  -------------- --------------

Equity in undistributed earnings (losses) of affiliates.........   $     (12.3)    $       0.5    $       3.7
Unrealized gain on trading securities...........................          55.1            --             --
Realized investment gain (loss).................................          --             (55.0)          --
                                                                  --------------  -------------- --------------
Net income (loss)...............................................   $      42.8     $     (54.5)   $       3.7
                                                                  ==============  ============== ==============

The carrying value of our equity investment in Aberdeen is $87.3 million at December 31, 2004 and is presented
as a trading equity security on our consolidated balance sheet.

On January 14, 2005, we closed on the sale to third parties of our equity holdings in Aberdeen for net proceeds
of $70.4 million, resulting in an after-tax realized investment loss of $7.0 million, which will be recognized
as a realized investment loss in our first quarter 2005 consolidated statement of operations. The January 2005
sale of our equity holdings in Aberdeen completed our disposition of our direct financial interests in
Aberdeen. We continue to participate in sub-advisory arrangements related to several of our asset management
product offerings with Aberdeen, the financial effects of which are not material to our consolidated financial
statements.

HRH. HRH is a Virginia-based property and casualty insurance and employee benefit products distributor traded
on the New York Stock Exchange. We owned 6.4% of its common shares, as well as convertible debt securities
which, if converted, would have represented 16.8% of HRH's common stock outstanding. Prior to November 2002, we
had a contractual right to designate two nominees for election to its board of directors.

In November 2002, we converted our HRH note into additional shares of HRH common stock, resulting in total HRH
holdings with a fair value of $167.1 million. On the day following the conversion, we sold shares of HRH common
stock in a secondary public offering for $23.5 million and issued stock purchase contracts for $133.9 million,
which contracts require us to deliver shares of HRH common stock on November 13, 2005 (Note 6).

                                                     F-30


As a result of these transactions, we recorded a gross realized investment gain of $15.3 million in 2002 and a
gross deferred investment gain of $91.8 million. Net of offsets for applicable deferred policy acquisition
costs and deferred income taxes, our realized gain was $6.4 million and our deferred gain was $32.4 million. We
calculated our gains using the specific identification of the securities sold. The deferred gain will be
realized on settlement of the stock purchase contracts in the fourth quarter of 2005. In addition, in 2003 we
sold shares of HRH common stock in the open market for $9.4 million and recorded a gross realized investment
gain of $6.9 million ($4.5 million after income taxes). As a result of the transactions we completed in
November 2002, it was no longer appropriate to consider HRH as an affiliate for accounting and reporting
purposes.

Policy loans and other invested assets

Policy loans are carried at their unpaid principal balances and are collateralized by the cash values of the
related policies. For purposes of fair value disclosures (Note 9), we estimate the fair value of fixed rate
policy loans by discounting loan interest and loan repayments. We base the discount rate on the 10-year United
States Treasury rate. We assume that loan interest payments are made at the fixed rate less 17.5 basis points
and that loan repayments only occur as a result of anticipated policy lapses. For variable rate policy loans,
we consider the unpaid loan balance as fair value, as interest rates on these loans are reset annually based on
market rates.

Other investments primarily include leveraged lease investments and other partnership and joint venture
interests. Leveraged lease investments represent the net amount of the estimated residual value of the lease
assets, rental receivables and unearned and deferred income to be allocated over the lease term. Investment
income is calculated using the interest method and is recognized only in periods in which the net investment is
positive. Other partnership and joint venture interests in which we do not have control or a majority ownership
interest are recorded using the equity method of accounting. These investments include affordable housing,
mezzanine and other partnership interests.

Our derivative instruments primarily include interest rate swap agreements. We report these contracts at fair
values, which are based on current settlement values. These values are determined by brokerage quotes that
utilize pricing models or formulas based on current assumptions for the respective agreements.

                                                                                        As of December 31,
Other Invested Assets:                                                            -----------------------------
($ amounts in millions)                                                               2004           2003
                                                                                  -------------- --------------

Transportation and other equipment leases......................................    $      67.8    $      68.7
Separate account equity investments............................................           40.0           49.2
Mezzanine partnerships.........................................................           61.7           50.9
Affordable housing partnerships................................................           23.4           24.8
Derivative instruments (Note 9)................................................           27.4           40.3
Other affiliate investments....................................................            8.8           15.5
Real estate....................................................................           70.1           64.0
Other partnership interests....................................................           72.6           88.6
                                                                                  -------------- --------------
Other invested assets..........................................................    $     371.8    $     402.0
                                                                                  ============== ==============

Amounts applicable to the closed block.........................................    $      60.0    $      46.7
                                                                                  ============== ==============

Net investment income and net realized investment gains (losses)

We recognize realized investment gains and losses on asset dispositions on a first-in, first-out basis and when
declines in fair value of debt and equity securities are considered to be other-than-temporarily impaired. We
adjust the cost basis of these written down investments to fair value at the date the determination of
impairment is made and do not change the new cost basis for subsequent recoveries in value. The closed block
policyholder dividend obligation, applicable deferred policy acquisition costs and applicable income taxes,
which offset realized investment gains and losses, are each reported separately as components of net income.

                                                     F-31


                                                                            Year Ended December 31,
Sources of Net Investment Income:                                 ---------------------------------------------
($ amounts in millions)                                               2004            2003           2002
                                                                  --------------  -------------- --------------

Debt securities.................................................   $     772.1     $     765.3    $     730.8
Equity securities...............................................           4.5             4.6            4.2
Mortgage loans..................................................          22.5            32.6           40.4
Venture capital partnerships....................................          25.5            49.0          (59.3)
Policy loans....................................................         167.1           171.7          171.8
Other investments...............................................          48.8            35.0           18.9
Cash and cash equivalents.......................................           4.9             7.0           11.9
                                                                  --------------  -------------- --------------
Total investment income.........................................       1,045.4         1,065.2          918.7
Less:  investment expenses......................................           9.8            10.0            9.2
                                                                  --------------  -------------- --------------
Net investment income, general account investments..............       1,035.6         1,055.2          909.5
Debt and equity securities pledged as collateral (Note 8).......          40.1            52.2           31.0
                                                                  --------------  -------------- --------------
Net investment income...........................................   $   1,075.7     $   1,107.4    $     940.5
                                                                  ==============  ============== ==============

Amounts applicable to the closed block..........................   $     560.0     $     573.1    $     562.0
                                                                  ==============  ============== ==============

For 2004, 2003 and 2002, net investment income was lower by $9.5 million, $10.4 million and $6.2 million,
respectively, due to non-income producing debt securities. Of these amounts, $5.8 million, $5.5 million and
$5.2 million, respectively, related to the closed block.

                                                                                 Year Ended December 31,
Sources of Realized Investment Gains (Losses):                          ---------------------------------------
($ amounts in millions)                                                     2004            2003           2002
                                                                        ------------  ------------ ------------

Debt security impairments.............................................   $   (15.5)    $   (76.1)   $  (114.3)
Equity security impairments...........................................        (1.5)         (4.3)        (9.8)
Mortgage loan impairments.............................................        --            (4.1)        (0.6)
Venture capital partnership impairments...............................        --            (4.6)        (5.1)
Affiliate equity security impairments.................................       (12.6)        (96.9)        --
Other invested asset impairments......................................        (3.3)        (16.5)       (22.0)
Debt and equity securities pledged as collateral impairments..........       (16.6)         (8.3)       (34.9)
                                                                        ------------  ------------ ------------
Impairment losses.....................................................       (49.5)       (210.8)      (186.7)
                                                                        ------------  ------------ ------------
Debt security transaction gains.......................................        39.0          93.7         94.3
Debt security transaction losses......................................       (10.6)        (29.0)       (45.9)
Equity security transaction gains.....................................        17.7          58.8         24.5
Equity security transaction losses....................................        (3.1)         (9.6)       (22.4)
Mortgage loan transaction gains (losses)..............................         0.2          (1.3)         0.2
Venture capital partnership transaction losses........................        --            (9.7)        --
Other invested asset transaction gains................................         5.5           9.4          2.1
                                                                        ------------  ------------ ------------
Net transaction gains.................................................        48.7         112.3         52.8
                                                                        ------------  ------------ ------------
Net realized investment losses........................................   $    (0.8)    $   (98.5)   $  (133.9)
                                                                        ------------  ------------ ------------

Net realized investment gains (losses)................................   $    (0.8)    $   (98.5)   $  (133.9)
                                                                        ------------  ------------ ------------
Applicable closed block policyholder dividend obligation (reduction)..         3.7          (5.9)       (40.3)
Applicable deferred policy acquisition costs (benefit)................        (0.4)         (4.1)        (7.2)
Applicable deferred income tax expense (benefit)......................         3.1         (35.6)       (20.8)
                                                                        ------------  ------------ ------------
Offsets to realized investment income (losses)........................         6.4         (45.6)       (68.3)
                                                                        ------------  ------------ ------------
Net realized investment losses included in net income.................   $    (7.2)    $   (52.9)   $   (65.6)
                                                                        ============  ============ ============

Included in realized impairment losses on debt and equity securities pledged as collateral above, are
impairments relating to our direct investments in the consolidated collateralized obligation trusts of $3.7
million, $5.9 million and $8.6 million for 2004, 2003 and 2002, respectively.

                                                     F-32


On May 25, 2004, we sold our Enfield, Connecticut office facility for a loss of $1.0 million ($0.7 million
after-tax). In anticipation of that sale, we had recorded a $6.2 million ($4.0 million after-tax) realized
impairment loss in 2003.

Unrealized investment gains (losses)

We recognize unrealized investment gains and losses on investments in debt and equity securities that we
classify as available-for-sale. We report these gains and losses as a component of other comprehensive income,
net of the closed block policyholder dividend obligation, applicable deferred policy acquisition costs and
applicable deferred income taxes.

                                                                             Year Ended December 31,
Sources of Changes in Net Unrealized Investment Gains (Losses):   ---------------------------------------------
($ amounts in millions)                                               2004            2003           2002
                                                                  --------------  -------------- --------------

Debt securities.................................................   $     (27.1)    $     (66.1)   $     404.2
Equity securities...............................................          15.4           (39.4)         108.5
Debt and equity securities pledged as collateral................           7.8           116.4           42.6
Other investments...............................................           0.1             7.0           (2.4)
                                                                  --------------  -------------- --------------
Net unrealized investment gains (losses)........................   $      (3.8)    $      17.9    $     552.9
                                                                  ==============  ============== ==============

Net unrealized investment gains (losses)........................   $      (3.8)    $      17.9    $     552.9
                                                                  --------------  -------------- --------------
Applicable policyholder dividend obligation.....................           3.6           (45.5)         369.4
Applicable deferred policy acquisition costs....................          (7.7)          (12.4)          95.9
Applicable deferred income taxes (benefit)......................          (4.0)           (9.8)          15.8
                                                                  --------------  -------------- --------------
Offsets to net unrealized investment gains (losses).............          (8.1)          (67.7)         481.1
                                                                  --------------  -------------- --------------
Net unrealized investment gains included in
  other comprehensive income (Note 12)..........................   $       4.3     $      85.6    $      71.8
                                                                  ==============  ============== ==============

Investing cash flows
                                                                            Year Ended December 31,
Investment Purchases, Sales, Repayments and Maturities:          ---------------------------------------------
($ amounts in millions)                                               2004            2003           2002
                                                                 --------------  -------------- --------------

Debt security purchases.........................................   $  (4,056.8)    $  (5,394.9)   $  (4,742.4)
Equity security purchases.......................................         (66.3)         (129.9)         (59.8)
Venture capital partnership investments.........................         (59.3)          (41.6)         (43.0)
Affiliate equity and debt security purchases....................          --              --            (28.0)
Other invested asset purchases..................................         (26.2)          (27.2)         (73.0)
Policy loan advances, net.......................................          44.7           (36.4)         (31.1)
                                                                  --------------  -------------- --------------
Investment purchases............................................   $  (4,163.9)    $  (5,630.0)   $  (4,977.3)
                                                                  ==============  ============== ==============

Debt securities sales...........................................   $   2,405.2     $   2,124.7    $   1,807.6
Debt securities maturities and repayments.......................       1,483.0         1,792.0        1,305.6
Equity security sales...........................................         111.2           235.7          139.3
Mortgage loan maturities and principal repayments...............          77.2           180.3           67.7
Venture capital partnership capital distributions...............          59.4            54.2           28.5
Affiliate securities sales......................................           1.0            --             --
Real estate and other invested assets sales.....................          83.7            30.3           69.9
                                                                  --------------  -------------- --------------
Investment sales, repayments and maturities.....................   $   4,220.7     $   4,417.2    $   3,418.6
                                                                  ==============  ============== ==============

                                                     F-33


The maturities of general account debt securities and mortgage loans, by contractual sinking fund payment and
maturity, as of December 31, 2004 are summarized in the following table. Actual maturities will differ from
contractual maturities as certain borrowers have the right to call or prepay obligations with or without call
or prepayment penalties, we have the right to put or sell certain obligations back to the issuers and we may
refinance mortgage loans. Refinancing of mortgage loans was not significant during the three years ended
December 31, 2004.

Maturities of General Account Debt Securities                          Debt          Mortgage
and Mortgage Loans at Cost:                                         Securities         Loans          Total
($ amounts in millions)                                           --------------  -------------- --------------

  Due in one year or less.......................................   $     167.4     $      25.1    $     192.5
  Due after one year through five years.........................       2,356.0            89.3        2,445.3
  Due after five years through ten years........................       3,642.4            59.8        3,702.2
  Due after ten years...........................................       6,725.9            33.7        6,759.6
                                                                  --------------  -------------- --------------
  Total.........................................................   $  12,891.7     $     207.9    $  13,099.6
                                                                  ==============  ============== ==============


6.  Financing Activities

Stock purchase contracts and indebtedness

We have recorded our stock purchase contract obligation as a liability on our balance sheet at estimated
settlement amount. This liability includes a premium representing the fair value of a net purchased option
contained in the purchase contract. We amortize the premium over the life of the purchase contract. Contract
adjustment payments and premium amortization on the purchase contracts are recorded in other expenses in our
statement of income.

We have recorded indebtedness at unpaid principal balances of each instrument net of issue discount. In
connection with our senior unsecured bond offering, we entered into an interest rate swap agreement on half of
the offering amount to reduce market risks from changes in interest rates. We have recorded the interest rate
swap at fair value based on the settlement value of the swap. For purposes of fair value disclosures (Note 9),
we have determined the fair value of indebtedness based on contractual cash flows discounted at market rates
for surplus notes and on quoted market prices for bonds and equity units.

                                                                       As of December 31,
Stock Purchase Contracts:                          ------------------------------------------------------------
($ amounts in millions)                                        2004                           2003
                                                   -----------------------------  -----------------------------
                                                      Carrying         Fair          Carrying         Fair
                                                        Value          Value           Value          Value
                                                   -------------- --------------  -------------- --------------

Stock purchase contracts stated amount..........    $     141.1    $     131.9     $     144.2    $     128.8
Settlement amount adjustment....................           (9.2)          --             (15.4)          --
                                                   -------------- --------------  -------------- --------------
Stock purchase contracts........................    $     131.9    $     131.9     $     128.8    $     128.8
                                                   ============== ==============  ============== ==============

In November 2002, we issued 3,622,500 stock purchase contracts in a public offering at $38.10 per contract
($138.0 million aggregate) and raised net proceeds of $133.9 million. The stock purchase contracts are prepaid
forward contracts issued by us that we will settle in shares of HRH common stock. Under each purchase contract,
we will make quarterly contract adjustment payments at the annual rate of 7.00% of the stated contract amount.

                                                     F-34


We are obligated to deliver shares of HRH common stock to holders of the stock purchase contracts in November
2005. The number of HRH common shares that we are obligated to deliver is based on the volume weighted-average
daily trading price of HRH common stock over the 20-trading day period ending on the third trading day prior to
November 13, 2005. The maximum number of HRH common shares that we are obligated to deliver, subject to
anti-dilution adjustments, is 3,622,500, or one share of HRH common stock per purchase contract. The minimum
number is 2,969,363 shares, or 0.8197 share of HRH common stock per purchase contract. We have pledged
3,622,500 shares of HRH common stock as collateral for our obligations under the purchase contracts (Note 5).
Upon issuance of the stock purchase contracts, we designated the embedded derivative instrument as a hedge of
the forecasted sale of our investment in HRH, whose shares underlie the stock purchase contracts. All changes
in the fair value of the embedded derivative instrument are recorded in other comprehensive income.

                                                                        As of December 31,
Indebtedness:                                     ------------------------------------------------------------
($ amounts in millions)                                        2004                           2003
                                                   -----------------------------  -----------------------------
                                                      Carrying         Fair          Carrying         Fair
                                                        Value          Value           Value          Value
                                                   -------------- --------------  -------------- --------------

6.95% surplus notes.............................    $      30.2    $      34.4     $     175.0    $     188.8
7.15% surplus notes.............................          173.9          174.8            --             --
Equity units....................................          153.7          227.8           153.7          232.1
Senior unsecured bonds..........................          300.0          306.7           300.0          311.2
Revolving credit facility.......................           25.0           25.0            --             --
Interest rate swap..............................            8.0            8.0            10.3           10.3
                                                   -------------- --------------  -------------- --------------
Total indebtedness..............................    $     690.8    $     776.7     $     639.0    $     742.4
                                                   ============== ==============  ============== ==============

Our 6.95% and 7.15% surplus notes are an obligation of Phoenix Life and are due December 1, 2006 and December
15, 2034, respectively. The carrying value of the 2034 notes is net of $1.1 million of unamortized original
issue discount. Interest payments are at an annual rate of 6.95% and 7.15%, respectively, require the prior
approval of the Superintendent of Insurance of the State of New York and may be made only out of surplus funds
which the Superintendent determines to be available for such payments under New York Insurance Law. The 6.95%
surplus notes have no early redemption provisions. The 7.15% surplus notes may be redeemed at the option of
Phoenix Life at any time at the "make-whole" redemption price set forth in the offering circular. New York
Insurance Law provides that the notes are not part of the legal liabilities of Phoenix Life. On December 15,
2004, Phoenix Life repurchased $144.8 million of the previously issued $175.0 million outstanding principal on
its 6.95% surplus notes and recognized a non-recurring after-tax charge of $6.4 million for costs incurred,
including the tender premium. Concurrent with the closing of the tender, Phoenix Life issued $175.0 million,
7.15% surplus notes.

In December 2002, we issued 6,147,500 of 7.25% equity units in a public offering at $25 per unit for gross
proceeds of $153.7 million (net proceeds of $149.1 million). Each equity unit is composed of an unsecured,
subordinated note and a purchase contract (equity forward on our common stock collateralized by the note). The
notes bear interest at an annual rate of 6.6% and $25 principal amount per note is initially due in February
2008. On or after November 2005 the notes will be remarketed as senior unsecured obligations and the interest
rate will be reset at that time. The holders of the purchase contracts will be paid a contract adjustment
payment at a rate of 0.65% per year and have agreed to purchase a minimum 2.8343 shares (17,423,859 shares
aggregate) and a maximum of 3.4578 shares (21,256,826 shares aggregate) of our common stock, depending on its
quoted market price, in February 2006. The present value of the future contract adjustment payments of $2.8
million was recorded as a charge to paid-in capital at inception.

Our senior unsecured bonds were issued in December 2001 for gross proceeds of $300.0 million (net proceeds of
$290.6 million) and mature in January 2032. We pay interest at an annual rate of 7.45%. We may redeem any or
all of the bonds from January 2007 at a redemption price equal to 100% of principal plus accrued and unpaid
interest to the redemption date. We also have the right to redeem the bonds in whole in certain circumstances
if we are unable to deduct interest paid on the bonds.

                                                     F-35


On November 22, 2004, we entered into a new $150.0 million three-year, unsecured senior revolving credit
facility to replace our prior $150.0 million credit facility that was to expire on December 20, 2004. The prior
facility consisted of two tranches: a $112.5 million, 364-day revolving credit facility and a $37.5 million
three-year revolving credit facility. Potential borrowers on the new credit line are The Phoenix Companies,
Inc., Phoenix Investment Partners and Phoenix Life. We unconditionally guarantee any loans under this new
facility to Phoenix Life and Phoenix Investment Partners. Base rate loans will bear interest at the greater of
Wachovia Bank, National Association's prime commercial rate or the federal funds rate plus 0.50%. Eurodollar
rate loans will bear interest at LIBOR plus an applicable percentage based on our Standard & Poor's and Moody's
ratings. The $25 million drawn by Phoenix Investment Partners on the prior facility was refinanced using this
new facility at the Eurodollar rate.

The new credit facility contains covenants that require us at all times to maintain consolidated stockholders'
equity, in accordance with GAAP, excluding the accounting effects of FIN 46(R), of $1,648.4 million, plus 50%
of positive quarterly net income and 100% of equity issuances and a maximum consolidated debt-to-capital ratio
of 30% and limits consolidated indebtedness, subject to certain exceptions, to $750.0 million. In addition,
Phoenix Life must maintain a minimum RBC ratio of 250% and a minimum A.M. Best financial strength rating of
"A-". The new facility no longer has a fixed charge coverage covenant. Borrowings under the facility are not
conditioned on the absence of a material adverse change.

Future minimum annual principal payments on indebtedness as of December 31, 2004 are: 2006, $30.2 million;
2007, $25.0 million; 2008, $153.7 million; 2032, $300.0 million and 2034, $175.0 million.

                                                                             Year Ended December 31,
Interest Expense on Indebtedness, including                       ---------------------------------------------
Amortization of Debt Issuance Costs:                                  2004            2003           2002
($ amounts in millions)                                           --------------  -------------- --------------

Stock purchase contract adjustment expense......................   $       7.8     $       8.2    $       1.0
                                                                  ==============  ============== ==============

Surplus notes...................................................   $      12.8     $      12.2    $      12.2
Equity units....................................................          12.1            12.1            0.3
Senior unsecured bonds..........................................          14.8            14.9           15.5
Bank credit facility and other..................................           1.1             0.4            3.4
                                                                  --------------  -------------- --------------
Interest expense on indebtedness................................   $      40.8     $      39.6    $      31.4
                                                                  ==============  ============== ==============

Stock purchase contract adjustment payments are included in other operating expenses.

Common stock and stock repurchase program

We have authorization for the issuance of 1,000,000,000 shares of our common stock. In connection with our
demutualization and initial public offering, we issued 106,376,417 common shares (56,180,517 shares to our
policyholders in exchange for their interests in the mutual company and 50,195,900 shares in sales to the
public). As of December 31, 2004, we had 94,877,572 shares outstanding, net of 11,517,387 common shares of
treasury stock. We also had 28,975,127 common shares reserved for issuance at that date under the purchase
contracts included with our equity units (21,256,826 shares), our stock option plans (6,281,458 shares) and our
restricted stock units (1,436,843 shares), or RSUs.

We have authorization from our board of directors to repurchase an additional 670,000 shares of our common
stock. As of December 31, 2004, we had repurchased 12,330,000 shares of our common stock at an average price of
$15.87 per share, including zero, zero and 7,781,500 shares in 2004, 2003 and 2002, respectively. During 2004,
we contributed 412,239 treasury shares to fund the employer match for our saving and investment benefit plans.
These shares had a cost basis of $6.5 million (weighted-average cost of $15.87 per share) and an aggregate
market value of $4.9 million.

                                                     F-36


State Farm Mutual Automobile Insurance Company, or State Farm, currently owns of record more than five percent
of our outstanding common stock. In 2004 and 2003, our subsidiaries incurred $32.4 million and $25.8 million,
respectively, as compensation costs for the sale of our insurance and annuity products by entities that were
either subsidiaries of State Farm or owned by State Farm employees.


7.  Separate Account Assets and Liabilities

Separate account products are those for which a separate investment and liability account is maintained on
behalf of the policyholder. Investment objectives for these separate accounts vary by fund account type, as
outlined in the applicable fund prospectus or separate account plan of operations. Our separate account
products include variable annuities and variable life insurance contracts.

Separate account assets and liabilities related to policyholder funds are carried at market value. Deposits,
net investment income and realized investment gains and losses for these accounts are excluded from revenues,
and the related liability increases are excluded from benefits and expenses. Fees assessed to the
contractholders for management services are included in revenues when services are rendered.

                                                                                       As of December 31,
Separate Account Assets and Liabilities:                                          -----------------------------
($ amounts in millions)                                                               2004           2003
                                                                                  -------------- --------------

Life and annuity segment separate accounts.....................................    $   6,807.2    $   5,910.3
Corporate and other segment separate accounts..................................          143.1          172.9
                                                                                  -------------- --------------
Total separate account assets and liabilities..................................    $   6,950.3    $   6,083.2
                                                                                  ============== ==============


8.  Investments Pledged as Collateral and Non-Recourse Collateralized Obligations

We are involved with various entities in the normal course of business that may be deemed to be variable
interest entities and, as a result, we may be deemed to hold interests in those entities. In particular, we
serve as the investment advisor to eight collateralized obligation trusts that were organized to take advantage
of bond market arbitrage opportunities, including the three in the table below. These eight collateralized
obligation trusts are investment trusts with aggregate assets of $3.0 billion that are primarily invested in a
variety of fixed income securities acquired from third parties. These collateralized obligation trusts, in
turn, issued tranched collateralized obligations and residual equity securities to third parties, as well as to
our principal life insurance subsidiary's general account. Our asset management affiliates earned advisory fees
of $8.0 million, $10.4 million and $7.9 million during the years ended December 31, 2004, 2003 and 2002,
respectively. These advisory fees are either recorded as investment product fees for unconsolidated trusts or
reflected as investment income on debt and equity securities pledged as collateral, net of interest expense on
collateralized obligations and applicable minority interest related to third-party equity investments for
consolidated trusts on our consolidated statement of income. The collateralized obligation trusts reside in
bankruptcy remote SPEs for which we provide neither recourse nor guarantees. Accordingly, our financial
exposure to these collateralized obligation trusts stems from our life insurance subsidiary's general account
direct investment in certain debt or equity securities issued by these collateralized obligation trusts. Our
maximum exposure to loss with respect to our life insurance subsidiary's direct investment in the eight
collateralized obligation trusts is $79.9 million at December 31, 2004 ($30.9 million of which relates to
trusts that are consolidated). Of that exposure, $54.7 million ($20.0 million of which relates to trust that
are consolidated) relates to investment grade debt securities and loss of management fees.

We consolidated three collateralized obligation trusts as of December 31, 2004, 2003 and 2002. As of December
31, 2004, our direct investment in the three consolidated collateralized obligation trusts is $30.9 million
($20.0 million of which is an investment grade debt security). We recognized investment income on debt and
equity securities pledged as collateral, net of interest expense on collateralized obligations and applicable
minority

                                                     F-37


interest, of $3.4 million, $3.6 million and $2.6 million for the years ended December 31, 2004, 2003 and 2002,
respectively, related to these three consolidated obligation trusts.

Five variable interest entities not consolidated by us under FIN 46(R) represent collateralized obligation
trusts with approximately $1.6 billion of investment assets pledged as collateral. Our general account's direct
investment in these unconsolidated variable interest entities is $49.0 million ($34.7 million of which are
investment grade debt securities at December 31, 2004). We recognized investment advisory fee revenues related
to the unconsolidated variable interest entities of $4.6 million, $6.8 million and $5.3 million for the years
ended December 31, 2004, 2003 and 2002, respectively.

                                                                                       As of December 31,
Consolidated Variable Interest Entities:                                          -----------------------------
($ amounts in millions)                                                                2004           2003
                                                                                  -------------- --------------
Assets Pledged as Collateral, at Fair Value
Phoenix CDO I..................................................................    $      94.4    $     148.8
Phoenix CDO II.................................................................          294.5          332.6
Phoenix-Mistic 2002-1 CDO......................................................          967.0          963.4
                                                                                  -------------- --------------
Total..........................................................................    $   1,355.9    $   1,444.8
                                                                                  ============== ==============

Non-recourse Collateralized Obligations
Phoenix CDO I (March 2011 maturity)............................................    $     127.3    $     183.2
Phoenix CDO II (December 2012 mandatorily redeemable)..........................          329.4          375.6
Phoenix-Mistic 2002-1 CDO (September 2014 maturity)............................          898.5          913.2
                                                                                  -------------- --------------
Total..........................................................................    $   1,355.2    $   1,472.0
                                                                                  ============== ==============

Assets pledged as collateral consist of available-for-sale debt and equity securities at fair value of $1,278.8
million and $1,350.0 million at December 31, 2004 and 2003, respectively. In addition, cash and accrued
investment income of $77.1 million and $94.8 million are included in these amounts at December 31, 2004 and
2003, respectively.

Non-recourse collateralized obligations are comprised of callable collateralized obligations of $1,253.4
million and $1,344.2 million at December 31, 2004 and 2003, respectively, and non-recourse derivative cash flow
hedge liabilities of $101.8 million (notional amount of $1,118.2 million with maturities of 2005-2013) and
$127.7 million (notional amount of $1,211.3 million with maturities of 2005-2013) at December 31, 2004 and
2003, respectively. Minority interest liabilities related to third-party equity investments in the consolidated
variable interest entities is $37.7 million and $22.3 million at December 31, 2004 and 2003, respectively.

Collateralized obligations for which Phoenix Investment Partners is the sponsor and actively manages the
assets, where we are deemed to be a primary beneficiary as a result of our variable interests, and where there
is not a significant amount of outside third-party equity investment in the trust, are consolidated in our
financial statements. Our financial exposure is limited to our share of equity and bond investments in these
vehicles held in our general account as available-for-sale debt and equity securities, as applicable, and there
are no financial guarantees from, or recourse, to us, for these collateralized obligation trusts.

Debt and equity securities pledged as collateral are recorded at fair value with any applicable unrealized
investment gains or losses reflected as a component of accumulated other comprehensive income, net of
applicable minority interest. We recognize realized investment losses on debt and equity securities in these
collateralized obligations when declines in fair values, in our judgment, are considered to be
other-than-temporarily impaired. Non-recourse obligations issued by the consolidated collateralized obligation
trusts at face value and are recorded at unpaid principal balance. Non-recourse derivative cash flow hedges are
carried on our consolidated balance sheet at fair value with an offsetting amount recorded in accumulated other
comprehensive income.

                                                     F-38


Effect of Consolidation of Collateralized Obligation Trusts:                            As of and for the
($ amounts in millions)                                                              Year Ended December 31,
                                                                           ---------------------------------------------
                                                                                2004            2003           2002
                                                                           --------------  -------------- --------------

Decrease in net income or increase in net loss...........................   $     (12.9)    $      (2.4)   $     (26.3)
                                                                           ==============  ============== ==============
Reduction to stockholders' equity........................................   $     (67.5)    $     (77.3)   $    (204.9)
                                                                           ==============  ============== ==============

The above non-cash charges to earnings and stockholders' equity primarily relate to realized and unrealized
investment losses within the collateralized obligation trusts. Upon maturity or other liquidation of the
trusts, the fair value of the investments pledged as collateral will be used to settle the non-recourse
collateralized obligations with any shortfall in such investments inuring to the third-party note and equity
holders. To the extent there remains a recorded liability for non-recourse obligations after all the assets
pledged as collateral are exhausted, such amount will be reduced to zero with a corresponding benefit to
earnings. Accordingly, these investment losses and any future investment losses under this method of
consolidation will ultimately reverse upon the maturity or other liquidation of the non-recourse collateralized
obligations. These non-recourse obligations mature between 2011 through 2014 but contain call provisions. The
call provisions may be triggered at the discretion of the equity investors based on market conditions and are
subject to certain contractual limitations.

GAAP requires us to consolidate all the assets and liabilities of these collateralized obligation trusts which
results in the recognition of realized and unrealized losses even though we have no legal obligation to fund
such losses in the settlement of the collateralized obligations. The FASB continues to evaluate, through the
issuance of FASB staff positions, the various technical implementation issues related to consolidation
accounting. We will continue to assess the impact of any new implementation guidance issued by the FASB as well
as evolving interpretations among accounting professionals. Additional guidance and interpretations may affect
our application of consolidation accounting in future periods.

                                                                            As of December 31,
Fair Value and Cost of  Debt and Equity Securities       ------------------------------------------------------
Pledged as Collateral:                                             2004                        2003
($ amounts in millions)                                  -------------------------  ---------------------------
                                                          Fair Value      Cost       Fair Value        Cost
                                                         ------------ ------------  ------------- -------------

Debt securities pledged as collateral...................  $ 1,276.9    $ 1,159.9     $  1,348.8    $  1,238.6
Equity securities pledged as collateral.................        1.9          0.4            1.2           0.7
                                                         ------------ ------------  ------------- -------------
Total debt and equity securities pledged as collateral..  $ 1,278.8    $ 1,160.3     $  1,350.0    $  1,239.3
                                                         ============ ============  ============= =============


                                                                             As of December 31,
Gross and Net Unrealized Gains and Losses from          -----------------------------------------------------
Debt and Equity Securities Pledged as Collateral:                  2004                        2003
($ amounts in millions)                                  -------------------------  ---------------------------
                                                             Gains       Losses         Gains         Losses
                                                         ------------ ------------  ------------- -------------

Debt securities pledged as collateral...................  $   131.3    $   (14.3)    $    138.5    $    (28.3)
Equity securities pledged as collateral.................        1.6         (0.1)           0.7          (0.2)
                                                         ------------ ------------  ------------- -------------
Total...................................................  $   132.9    $   (14.4)    $    139.2    $    (28.5)
                                                         ============ ============  ============= =============
Net unrealized gains....................................  $   118.5                  $    110.7
                                                         ============               =============


                                                     F-39





Aging of Temporarily Impaired                                      As of December 31, 2004
Debt and Equity Securities Pledged           -------------------------------------------------------------------
as Collateral:                                 Less than 12 months     Greater than 12 months       Total
($ amounts in millions)                      ------------------------- ---------------------- ------------------
                                                Fair       Unrealized    Fair    Unrealized   Fair    Unrealized
                                                Value        Losses      Value     Losses     Value     Losses
                                             ----------- ------------- -------- ------------- ------- -----------

Corporate..................................   $   16.2    $   (0.2)    $   25.2  $   (4.0)    $  41.4  $   (4.2)
Mortgage-backed............................       --          --           23.9      (8.3)       23.9      (8.3)
Other asset-backed.........................       --          --           21.0      (1.8)       21.0      (1.8)
                                             ----------- ------------- -------- ------------- ------- ----------
Debt securities............................   $   16.2    $   (0.2)    $   70.1  $  (14.1)    $  86.3  $  (14.3)
Equity securities pledged as collateral....       --          --           --        (0.1)       --        (0.1)
                                             ----------- ------------- -------- ------------- ------- ----------
Total temporarily impaired securities
  pledged as collateral....................   $   16.2    $   (0.2)    $   70.1  $  (14.2)    $  86.3  $  (14.4)
                                             =========== ============= ======== ============= ======= ==========

Gross unrealized losses related to debt securities pledged as collateral whose fair value is less than the
security’s amortized cost totals $14.3 million at December 31, 2004. Gross unrealized losses on debt securities
with a fair value less than 80% of the security’s amortized cost totaled $7.8 million at December 31, 2004. The
majority of these debt securities are investment grade issues that continue to perform to their original
contractual terms at December 31, 2004.

Maturity of Debt Securities Pledged as Collateral:                                       2004
($ amounts in millions)                                                                  Cost
                                                                                     --------------

Due in one year or less............................................................   $      20.7
Due after one year through five years..............................................         294.3
Due after five years through ten years.............................................         689.8
Due after ten years................................................................         155.1
                                                                                     --------------
Total debt securities..............................................................   $   1,159.9
                                                                                     ==============

The amount of CDO-related derivative cash flow hedge ineffectiveness recognized through earnings for the years
ended December 31, 2004 and 2003 is ($0.7) million and $0.0 million, respectively. See Note 5 to our
consolidated financial statements for information on realized investment losses related to these CDOs.

9. Derivative Instruments and Fair Value of Financial Instruments

Derivative instruments

We maintain an overall interest rate risk-management strategy that primarily incorporates the use of interest
rate swaps as hedges of our exposure to changes in interest rates. Our exposure to changes in interest rates
primarily results from our commitments to fund interest-sensitive insurance liabilities, as well as from our
significant holdings of fixed rate financial instruments.

We recognize all derivative instruments on the balance sheet at fair value. Generally, we designate each
derivative according to the associated exposure as either a fair value or cash flow hedge at its inception as
we do not enter into derivative contracts for trading or speculative purposes.

Except for the foreign currency swaps discussed below, all fair value hedges are accounted for with changes in
the fair value of related interest rate swaps recorded on the balance sheet with an offsetting amount recorded
to the hedged item’s balance sheet carrying amount. Changes in the fair value of foreign currency swaps used as
hedges of the fair value of foreign currency denominated assets are reported in current period earnings with
the change in value of the hedged asset attributable to the hedged risk.


                                                     F-40


Cash flow hedges are generally accounted for with changes in the fair value of related interest rate swaps
recorded on the balance sheet with an offsetting amount recorded in accumulated other comprehensive income. The
effective portion of changes in fair values of derivatives hedging the variability of cash flows related to
forecasted transactions are reported in accumulated other comprehensive income and reclassified into earnings
in the periods during which earnings are affected by the variability of the cash flows of the hedged item.

Changes in the fair value of derivative instruments not designated as hedging instruments and ineffective
portions of hedges are recognized in net investment income in the period incurred.

Derivative Instruments Held in                                                  As of December 31,
General Account:                                                  ----------------------------------------------
($ amounts in millions)                                                    2004                    2003
                                                                  ----------------------- ----------------------
                                            Notional
                                             Amount    Maturity     Asset      Liability    Asset      Liability
                                           ---------- ----------- ----------- ----------- ----------- ----------
Interest rate swaps
    Fair value hedges.....................  $   150      2032      $     8.0   $    --     $    10.3   $   --
    Cash flow hedges......................       30      2007            2.8        --           4.5       --
    Non-hedging derivative instruments....      360      2007           16.5        14.0        25.1       21.7
Other.....................................       50    2004-2008         0.1        --           0.4       --
                                           -----------            ----------- ----------- ----------- ----------
Total general account
  derivative instrument positions.........  $   590                $    27.4   $    14.0   $    40.3   $   21.7
                                           ===========            =========== =========== =========== ==========

Fair value hedges. We currently hold interest rate swaps that convert a portion of our fixed rate debt
portfolio to variable rate debt. We account these hedges for under the shortcut method and, therefore, record
no hedge ineffectiveness in current period earnings associated with these interest rate swaps.

Cash flow hedges. We currently hold interest rate swaps that effectively convert variable rate bond cash flows
to fixed cash flows in order to better match the cash flows of associated liabilities. We account for these
hedges under the shortcut method and, therefore, recorded no hedge ineffectiveness in earnings for 2004, 2003
and 2002. We do not expect to reclassify any amounts reported in accumulated other comprehensive income into
earnings over the next twelve months with respect to these hedges.

Total Return Swaps. The Company uses total return swaps to hedge against market risks from declining equity
prices and changes in foreign currency exchange rates. Under total return swaps, the Company agrees with
another party (referred to as the counterparty) to exchange the appreciation or depreciation of an equity
holding in return for a floating rate payment. The appreciation or depreciation of the equity holding includes
both changes from the underlying price of the security in its home currency and changes in the foreign currency
exchange rate between its home currency and United States dollar. Counterparties to such financial instruments
expose the Company to credit-related losses in the event of nonperformance, but we do not expect any
counterparties to fail to meet their obligations given their high credit ratings. The credit exposure of total
return swaps is the fair value (market value) of contracts with a positive fair value (market value) at the
reporting date. The Company had one total return swap with an expiration of April 1, 2005 at the end of the
statement period.

Non-hedging derivative instruments. We also hold interest rate swaps that were initially entered into as hedges
of an anticipated purchase of assets associated with an acquisition of a block of insurance liabilities.
Subsequently, we took offsetting swap positions to lock in a stream of income to supplement the income on the
assets purchased.

We are exposed to credit risk in the event of non-performance by counterparties to these derivative
instruments. We do not expect that counterparties will fail to meet their financial obligation as we only enter
into derivative contracts with a number of highly rated financial institutions. The credit exposure of these
instruments is the positive fair value at the reporting date, or $27.4 million as of December 31, 2004. We
consider the likelihood of any material loss on these instruments to be remote.


                                                     F-41



Fair value of financial instruments

Carrying Amounts and Estimated Fair Values                                    As of December 31,
of Financial Instruments:                                     --------------------------------------------------
($ amounts in millions)                                                 2004                     2003
                                                              ------------------------- ------------------------
                                                                Carrying       Fair        Carrying      Fair
                                                                 Value         Value        Value        Value
                                                              ------------ ------------ ------------- ----------

Cash and cash equivalents...................................   $   435.0    $    435.0   $    447.9   $    447.9
Available-for-sale debt securities (Note 5).................    13,476.3      13,476.3     13,273.0     13,273.0
Available-for-sale equity securities (Note 5)...............       304.3         304.3        312.0        312.0
Trading equity securities...................................        87.3          87.3         --           --
Mortgage loans (Note 5).....................................       207.9         220.4        284.1        301.4
Debt and equity securities pledged as collateral (Note 8)...     1,278.8       1,278.8      1,350.0      1,350.0
Derivative financial instruments............................        27.4          27.4         40.3         40.3
Policy loans (Note 5).......................................     2,196.7       2,318.0      2,241.4      2,370.0
                                                              ------------ ------------ ------------ ------------
Financial assets............................................   $18,013.7    $ 18,147.5   $ 17,948.7   $ 18,094.6
                                                              ============ ============ ============ ============

Investment contracts (Note 3)...............................   $ 3,492.4    $  3,510.8   $  3,642.7   $  3,680.8
Non-recourse collateralized obligations (Note 8)............     1,355.2       1,355.9      1,472.0      1,444.8
Stock purchase contracts (Note 6)...........................       131.9         131.9        128.8        128.8
Indebtedness (Note 6).......................................       690.8         776.7        639.0        742.4
Derivative financial instruments............................        14.0          14.0         21.7         21.7
                                                              ------------ ------------ ------------ ------------
Financial liabilities.......................................   $ 5,684.3    $  5,789.3   $  5,904.2   $  6,018.5
                                                              ============ ============ ============ ============


10. Income Taxes

We recognize income tax expense or benefit based upon amounts reported in the financial statements and the
provisions of currently enacted tax laws. We allocate income taxes to income, other comprehensive income and
additional paid-in capital, as applicable.

We recognize current income tax assets and liabilities for estimated income taxes refundable or payable based
on the current year’s income tax returns. We recognize deferred income tax assets and liabilities for the
estimated future income tax effects of temporary differences and carryforwards. Temporary differences are the
differences between the financial statement carrying amounts of assets and liabilities and their tax bases, as
well as the timing of income or expense recognized for financial reporting and tax purposes of items not
related to assets or liabilities. If necessary, we establish valuation allowances to reduce the carrying amount
of deferred income tax assets to amounts that are more likely than not to be realized. We periodically review
the adequacy of these valuation allowances and record any reduction in allowances through earnings.

Allocation of Income Taxes:                                                Year Ended December 31,
($ amounts in millions)                                          ----------------------------------------------
                                                                      2004            2003           2002
                                                                 --------------  -------------- ---------------

Income taxes (benefit) applicable to
  Current......................................................   $     (15.2)    $      (5.4)   $     (14.2)
  Deferred.....................................................          55.7           (12.9)         (44.6)
                                                                 --------------  -------------- ---------------
  Continuing operations........................................          40.5           (18.3)         (58.8)
  Equity in earnings of affiliates.............................          (6.8)           (0.2)           2.6
  Discontinued operations......................................          (1.2)           (1.2)          (0.6)
  Cumulative effect of accounting changes......................          --              --            (11.4)
                                                                 --------------  -------------- ---------------
Net income (loss)..............................................          32.5           (19.7)         (68.2)
Other comprehensive income (loss)..............................         (20.5)           (4.2)          14.2
                                                                 --------------  -------------- ---------------
Comprehensive income (loss)....................................   $      12.0     $     (23.9)   $     (54.0)
                                                                 ==============  ============== ===============


                                                     F-42


Effective Income Tax Rate:                                                      Year Ended December 31,
($ amounts in millions)                                                  ---------------------------------------
                                                                              2004         2003         2002
                                                                         ------------- ------------ ------------

Income tax expense (benefit) at statutory rate of 35%...................  $    48.0     $    (7.1)   $   (71.2)
Tax-advantaged investment income........................................      (10.8)         (6.8)       (12.6)
Intangible asset amortization and impairments...........................       --            --           19.5
Realized losses on available-for-sale securities pledged as collateral..        4.5           0.9          9.2
State income taxes......................................................        0.1          (4.3)        (1.2)
Tax interest recoveries.................................................       --            (1.1)        --
Other, net..............................................................       (1.3)          0.1         (2.5)
                                                                         ------------- ------------ ------------
Income tax expense (benefit) applicable to continuing operations........  $    40.5     $   (18.3)   $   (58.8)
                                                                         ============= ============ ============
Effective income tax rates..............................................       29.5%        (90.6)%      (28.9)%
                                                                         ============= ============ ============


Deferred Income Tax Balances Attributable to Temporary Differences:                      As of December 31,
($ amounts in millions)                                                              -----------------------------
                                                                                         2004           2003
                                                                                     -------------- --------------
Deferred income tax assets
Future policyholder benefits.......................................................   $     214.1    $    215.2
Unearned premiums / deferred revenues..............................................         118.1         125.1
Employee benefits..................................................................          98.3          91.1
Intangible assets..................................................................          19.2          18.0
Investments........................................................................          76.8         114.1
Net operating loss carryover benefits..............................................          59.5          54.3
Foreign tax credits carryover benefits.............................................           0.1           0.1
Low income housing tax credits.....................................................          12.3          12.3
Other..............................................................................          11.6           9.1
Valuation allowance................................................................          (7.9)         (4.6)
                                                                                     -------------- --------------
Gross deferred income tax assets...................................................         602.1         634.7
                                                                                     -------------- --------------

Deferred tax liabilities
Deferred policy acquisition costs..................................................        (339.0)       (316.1)
Investments........................................................................        (137.0)       (160.5)
Investment management contracts....................................................         (86.6)        (94.2)
Other..............................................................................          (8.8)         (5.2)
                                                                                     -------------- --------------
Gross deferred income tax liabilities..............................................        (571.4)       (576.0)
                                                                                     -------------- --------------
Deferred income tax asset..........................................................   $      30.7    $     58.7
                                                                                     ============== ==============

We have elected to file a consolidated federal income tax return for 2004 and prior years. Within the
consolidated tax return, we are required by regulations of the Internal Revenue Service, or IRS, to segregate
the entities into two groups: life insurance companies and non-life insurance companies. We are limited as to
the amount of any operating losses from one group that can be offset against taxable income of the other group.
These limitations affect the amount of any operating loss carryforwards that we have now or in the future.

As of December 31, 2004, we had deferred tax assets of $51.6 million related to net operating losses for
federal income tax purposes and $7.9 million for state income tax purposes. The related federal net operating
losses are scheduled to expire as follows: $61.2 million in 2017, $12.5 million in 2018, $1.1 million in 2019,
$1.8 million in 2022, $33.5 in 2023 and $44.8 in 2024. The state net operating losses relate to the non-life
subgroup and are scheduled to expire as follows: $29.8 million in 2012 and 2013 and $72.0 million in 2019
through 2023. Due to the inability to combine the life insurance and non-life insurance subgroups for state
income tax purposes, we established a $7.9 million and a $4.6 million valuation allowance at the end of 2004
and 2003, respectively, relative to the state net operating loss carryforwards.

As of December 31, 2004, our deferred income tax asset of $0.1 million related to foreign tax credit carryovers
was expected to expire between the 2006 and 2008 tax years.


                                                     F-43


As of December 31, 2004, our deferred income tax assets of $12.3 million related to low income housing tax
credits are expected to expire as follows: $4.1 million in 2022, $4.1 million in 2023 and $4.1 million in 2024.

We have determined, based on our earnings and future income, that it is more likely than not that the deferred
income tax assets after valuation allowance already recorded as of December 31, 2004 and 2003 will be realized.
In determining the adequacy of future income, we have considered projected future income, reversal of existing
temporary differences and available tax planning strategies that could be implemented, if necessary.

Our federal income tax returns are routinely audited by the IRS, and estimated provisions are routinely
provided in the financial statements in anticipation of the results of these audits. While it is often
difficult to predict the outcome of these audits, including the timing of any resolution of any particular tax
matter, we believe that our reserves, as reported on our consolidated balance sheet, are adequate for all open
tax years. Unfavorable resolution of any particular issue could result in additional use of cash to pay
liabilities that would be deemed owed to the IRS. Additionally, any unfavorable or favorable resolution of any
particular issue could result in an increase or decrease, respectively, to our effective income tax rate to the
extent that our estimates differ from the ultimate resolution. Tax-advantaged investment income for 2004
includes a $5.7 million benefit related to the favorable resolution of certain tax matters with the IRS.


11. Employee Benefit Plans and Employment Agreements

Pension and other postemployment benefits

We provide our employees with postemployment benefits that include retirement benefits, through pension and
savings plans, and other benefits, including health care and life insurance. The components of pension and
postretirement benefit costs follow:

Components of Pension and Other Postemployment Benefit Cost:                     Year Ended December 31,
($ amounts in millions)                                                -----------------------------------------
                                                                           2004          2003          2002
                                                                       ------------  ------------  -------------
Cost components
Recurring pension benefit expense.....................................  $    16.0     $    22.8     $    15.2
Recurring other postretirement benefit expense........................        3.8           3.6           4.2
Savings plans expense.................................................        5.1           5.4           4.9
                                                                       ------------  ------------  -------------
Total continuing operations recurring expense.........................       24.9          31.8          24.3
Total non-recurring and discontinued operations expense (benefit).....       (8.4)          1.3           0.6
                                                                       ------------  ------------  -------------
Total pension and other postemployment benefit cost...................  $    16.5     $    33.1     $    24.9
                                                                       ============  ============  =============


Principal Rates and Assumptions:                                               Year Ended December 31,
                                                                       --------------------------------------
                                                                           2004         2003         2002
                                                                       ------------ ------------ ------------
Assumptions Used to Determine Benefit Obligations
Projected benefit obligation discount rate............................     5.75%        6.0%         6.5%
Future compensation increase rate.....................................     4.0%         3.5%         3.5%
Pension plan assets long-term rate of return..........................     8.5%         8.5%         8.5%
Deferred investment gain/loss amortization corridor...................     5.0%         5.0%         5.0%
Future health care cost increase rate, age 64 and younger.............     8.5%         9.25%       10.0%
Future health care cost increase rate, age 65 and older...............    10.5%        11.25%       12.0%

Assumptions Used to Determine Benefit Expense
Projected benefit obligation discount rate............................     6.0%         6.5%         7.0%
Future compensation increase rate.....................................     3.5%         3.5%         4.0%
Pension plan assets long-term rate of return..........................     8.5%         8.5%         9.0%
Deferred investment gain/loss amortization corridor...................     5.0%         5.0%         5.0%
Future health care cost increase rate, age 64 and younger.............     9.25%       10.0%         5.5%
Future health care cost increase rate, age 65 and older...............    11.25%       12.0%         5.5%


                                                     F-44


Our investment policy and strategy employs a total return approach combining equities, fixed income, real
estate and other assets to maximize the long-term return of the plan assets for a prudent level of risk. Risk
tolerance is determined based on consideration of plan liabilities and plan-funded status. The investment
portfolio contains a diversified blend of equity, fixed income, real estate and alternative investments. The
equity investments are diversified across domestic and foreign markets, across market capitalizations (large,
mid and small cap), as well as growth, value and blend. Derivative instruments are not typically used for
implementing asset allocation decisions and are never used in conjunction with leverage. Investment performance
is measured and monitored on an on-going basis through quarterly investment portfolio reviews, annual liability
measurement, and periodic presentations by asset managers included in the plan.

We use a building block approach in estimating the long-term rate of return for plan assets. Historical returns
are determined by asset class. The historical relationships between equities, fixed income and other asset
classes are reviewed. We apply long-term asset return estimates to the plan’s target asset allocation to
determine the weighted-average long-term return. Our long-term asset allocation was determined through modeling
long-term returns and asset return volatilities. The allocation reflects proper diversification and was
reviewed against other corporate pension plans for reasonability and appropriateness.

Employee Pension Plan Asset Allocation:                                             As of December 31,
                                                                               -----------------------------
                                                                                    2004           2003
                                                                               -------------- --------------
Asset Category
Equity securities...........................................................         67%            63%
Debt securities.............................................................         24%            28%
Real estate.................................................................          6%             6%
Other.......................................................................          3%             3%
                                                                               -------------- --------------
Total.......................................................................        100%           100%
                                                                               ============== ==============

We recognize pension and other postretirement benefit costs and obligations over the employees’ expected
service periods by discounting an estimate of aggregate benefits. We estimate aggregate benefits by using
assumptions for employee turnover, future compensation increases, rates of return on pension plan assets and
future health care costs. We recognize an expense for differences between actual experience and estimates over
the average future service period of participants. We recognize an expense for our contributions to employee
and agent savings plans at the time employees and agents make contributions to the plans. We also recognize the
costs and obligations of severance, disability and related life insurance and health care benefits to be paid
to inactive or former employees after employment but before retirement.

We use a December 31 measurement date for our pension and postemployment benefits.

In 2004 and 2003, as a result of the sale of our retail affiliated distribution operations and staff reduction
initiatives, there was a curtailment credit for the employee pension plan and postretirement plan in the
aggregate amount of $8.4 million and $0.8 million, respectively.

Pension plans

We have two defined benefit pension plans covering our employees. The employee pension plan, covering
substantially all of our employees, provides benefits up to the amount allowed under the Internal Revenue Code.
The supplemental plan provides benefits in excess of the primary plan. Retirement benefits under both plans are
a function of years of service and compensation.


                                                     F-45


Components of Pension Benefit Expense:                                       Year Ended December 31,
($ amounts in millions)                                            ---------------------------------------------
                                                                        2004            2003           2002
                                                                   --------------  -------------- --------------

Service cost.....................................................   $      10.4     $      12.4    $      14.0
Interest cost....................................................          32.8            33.0           34.5
Plan assets expected return......................................         (30.6)          (27.4)         (34.5)
Net gain amortization............................................           4.9             6.2            1.7
Prior service cost amortization..................................           0.9             1.1            2.0
Net transition asset amortization................................          (2.4)           (2.5)          (2.5)
                                                                   --------------  -------------- --------------
Recurring pension benefit cost...................................          16.0            22.8           15.2
                                                                   --------------  -------------- --------------
Special retirement programs cost.................................          --               3.3            0.6
Curtailment......................................................           1.3            --             --
                                                                   --------------  -------------- --------------
Non-recurring and discontinued operations cost...................           1.3             3.3            0.6
                                                                   --------------  -------------- --------------
Pension benefit cost.............................................   $      17.3     $      26.1    $      15.8
                                                                   ==============  ============== ==============

The employee pension plan is funded with assets held in a trust. The assets within the plan include corporate
and government debt securities, equity securities, real estate and venture capital partnerships. The
supplemental plan is unfunded. Upon a change in control (as defined in the plan) of The Phoenix Companies,
Inc., we are required to make an irrevocable contribution to a trust to fund the benefits payable under the
supplemental plan.

Changes in Plan Assets and Benefit Obligations:           Employee Plan                Supplemental Plan
($ amounts in millions)                            -----------------------------  -----------------------------
                                                                     Year Ended December 31,
                                                   ------------------------------------------------------------
                                                        2004           2003            2004           2003
                                                   -------------- --------------  -------------- --------------
Plans’ Assets
Plan assets’ actual gain.........................   $      44.3    $      66.4     $      --      $      --
Employer contributions...........................           8.9           --               5.7            5.1
Participant benefit payments.....................         (25.7)         (25.2)           (5.7)          (5.1)
                                                   -------------- --------------  -------------- --------------
Change in plan assets............................          27.5           41.2            --             --
Plan assets, beginning of year...................         368.9          327.7            --             --
                                                   -------------- --------------  -------------- --------------
Plans’ assets, end of year.......................   $     396.4    $     368.9     $      --      $      --
                                                   ============== ==============  ============== ==============

Plans’ Projected Benefit Obligation
Service and interest cost accrual................   $     (36.1)   $     (37.1)    $      (7.0)   $      (8.4)
Actuarial gain (loss)............................         (35.5)         (39.9)          (11.2)           7.6
Curtailment gain (loss)..........................           7.5            1.3             2.7           (2.2)
Participant benefit payments.....................          25.7           25.2             5.7            5.1
                                                   -------------- --------------  -------------- --------------
Change in projected benefit obligation...........         (38.4)         (50.5)           (9.8)           2.1
Projected benefit obligation, beginning of year..        (460.6)        (410.1)         (124.8)        (126.9)
                                                   -------------- --------------  -------------- --------------
Projected benefit obligation, end of year........   $    (499.0)   $    (460.6)    $    (134.6)   $    (124.8)
                                                   ============== ==============  ============== ==============

Accumulated benefit obligation...................   $     474.5    $     434.6     $     126.6    $     112.9
                                                   ============== ==============  ============== ==============

In addition to the liability for the excess of accrued pension cost of each plan over the amount contributed to
the plan, we recognize a liability for any excess of the accumulated benefit obligation of each plan over the
fair value of plan assets. The offset to this additional liability is first recognized as an intangible asset,
which is limited to unrecognized prior service, including any unrecognized net transition obligation. Any
additional offsets are then recognized as an adjustment to accumulated other comprehensive income.


                                                     F-46



Funded Status of Pension Plans:                                      Employee Plan          Supplemental Plan
($ amounts in millions)                                         -----------------------  -----------------------
                                                                             Year Ended December 31,
                                                                ------------------------------------------------
                                                                    2004        2003         2004        2003
                                                                ----------- -----------  ----------- -----------

Excess of accrued pension benefit cost over amount
  contributed to plan........................................    $  (37.0)   $  (38.3)    $  (86.0)   $  (82.0)
Excess of accumulated benefit  obligation over plan assets...       (41.2)      (27.4)       (40.6)      (30.9)
                                                                ----------- -----------  ----------- -----------
Accrued benefit obligation in other liabilities..............       (78.2)      (65.7)      (126.6)     (112.9)
Intangible asset.............................................         8.0        11.0         --          --
Minimum pension liability adjustment in accumulated
  other comprehensive income.................................        33.2        16.4         40.6        30.9
                                                                ----------- -----------  ----------- -----------
Funding status recognized in balance sheet...................       (37.0)      (38.3)       (86.0)      (82.0)
                                                                ----------- -----------  ----------- -----------
Net unamortized loss.........................................       (57.6)      (44.8)       (52.6)      (47.6)
Unamortized prior service (cost) credit......................        (8.0)      (11.0)         4.0         4.8
Net unamortized transition asset.............................        --           2.4         --          --
                                                                ----------- -----------  ----------- -----------
Funding status unrecognized in balance sheet.................       (65.6)      (53.4)       (48.6)      (42.8)
                                                                ----------- -----------  ----------- -----------
Plan assets less than projected benefit obligations,
  end of year................................................    $ (102.6)   $  (91.7)    $ (134.6)   $ (124.8)
                                                                =========== ===========  =========== ===========

We expect to contribute $43.3 million to the employee pension plan through 2009, including $6.5 million during
2005. For the estimated 2004 contribution, quarterly payments of $2.5 million each were made to the pension
plan in April, July and October 2004. In September 2004, we made a payment of $1.6 million, related to the 2003
minimum contribution.

Other postemployment benefits

Components of Postretirement Benefit Cost:                                  Year Ended December 31,
($ amounts in millions)                                           ---------------------------------------------
                                                                      2004            2003           2002
                                                                  --------------  -------------- --------------

Service cost....................................................   $       1.8     $       1.7    $       2.0
Interest cost...................................................           4.3             4.8            4.9
Net gain amortization...........................................          (0.3)           (0.1)          (2.5)
Prior service cost amortization.................................          (2.0)           (2.8)          (0.2)
                                                                  --------------  -------------- --------------
Recurring other postretirement benefit cost.....................           3.8             3.6            4.2
Curtailments....................................................          (9.7)           (2.0)          --
                                                                  --------------  -------------- --------------
Other postretirement benefit cost (benefit).....................   $      (5.9)    $       1.6    $       4.2
                                                                  ==============  ============== ==============


Changes in Plan Projected Benefit Obligation:                                       Year Ended December 31,
($ amounts in millions)                                                           -----------------------------
                                                                                      2004           2003
                                                                                  -------------- --------------

Service and interest cost accrued..............................................    $      (6.1)   $      (6.5)
Actuarial gain (loss)..........................................................            4.4           (5.9)
Curtailments...................................................................            3.6            0.5
Participant benefit payments...................................................            6.5            7.4
                                                                                  -------------- --------------
Change in projected benefit obligation.........................................            8.4           (4.5)
Projected benefit obligations, beginning of year...............................          (78.7)         (74.2)
                                                                                  -------------- --------------
Projected benefit obligations, end of year.....................................    $     (70.3)   $     (78.7)
                                                                                  ============== ==============


                                                     F-47



Funded Status of Other Postretirement Benefit Plans:                                   As of December 31,
($ amounts in millions)                                                           -----------------------------
                                                                                       2004           2003
                                                                                  -------------- --------------

Accrued benefit obligation included in other liabilities.......................    $     (88.0)   $    (100.5)
                                                                                  -------------- --------------
Net unamortized gain...........................................................           10.3            6.3
Unamortized prior service credits..............................................            7.4           15.5
                                                                                  -------------- --------------
Funding status unrecognized in balance sheet...................................           17.7           21.8
                                                                                  -------------- --------------
Plan assets less than projected benefit obligations, end of year...............    $     (70.3)   $     (78.7)
                                                                                  ============== ==============

The health care cost trend rate has a significant effect on the amounts reported. For example, increasing the
assumed health care cost trend rates by one percentage point in each year would increase the accumulated
postretirement benefit obligation by $1.0 million and the annual service and interest cost by $0.1 million.
Decreasing the assumed health care cost trend rates by one percentage point in each year would decrease the
accumulated postretirement benefit obligation by $1.0 million and the annual service and interest cost by $0.1
million.

Savings plans

During 2004, 2003 and 2002, we incurred costs of $5.1 million, $5.4 million and $4.9 million, respectively, for
contributions to our employer-sponsored savings plans.

During 2004 and 2003, we contributed 412,239 and 399,353 treasury shares, respectively, to fund the employer
match for our saving and investment benefit plans. These shares had a cost basis of $6.5 million and $6.3
million (weighted-average cost of $15.87 per share for both periods) and an aggregate market value of $4.9
million and $3.8 million.

In connection with the sale of our retail affiliated broker-dealer operations, we have begun the process of
terminating our employer-sponsored savings plan for affected employees. The effect of this termination is not
expected to be material to our financial statements.

Stock options

We have stock option plans under which we grant options for a fixed number of common shares to employees and
non-employee directors. Our options have an exercise price equal to the market value of the shares at the date
of grant. A new standard was issued which amends an existing standard on accounting for stock-based
compensation. Our adoption of the new standard results in expense recognition for stock options awarded after
December 31, 2002 over the service period of the options equal to their fair value at issuance. We calculate
the fair value of options using the Black-Scholes option valuation model. During 2002, a previous standard
allowed for us to account for stock-based compensation using the intrinsic value method which did not result in
expense recognition because at issuance date, the market price of our common stock was equal to the exercise
price of the options.

During the three years ended December 31, 2004, we granted options to employees and non-employee directors.
Each option, once vested, entitles the holder to purchase one share of our common stock. The employees’ options
vest over a three-year period while the directors’ options vested immediately. No options were exercisable
until June 25, 2003, the second anniversary of our initial public offering. All options terminate ten years
from the date of grant. The Stock Incentive Plan authorizes the issuance to officers and employees of up to
that number of options equal to 5% of the total number of common stock shares outstanding immediately after the
initial public offering in June 2001, or approximately 5,250,000 shares, plus an additional 1%, or
approximately 1,050,000 shares, for Phoenix Investment Partners officers and employees, less the number of
share options issuable under the Directors’ Stock Plan. The Directors’ Stock Plan authorizes the issuance to
non-employee directors of up to that number of options equal to 0.5%, or approximately 525,000 shares, of the
total number of common stock


                                                     F-48



shares outstanding immediately after the initial public offering in June 2001,plus 500,000 shares, bringing the
total to approximately 1,025,000 shares.

Stock Option Activity:                                                Year Ended December 31,
($ amounts in millions, except per share data)      ------------------------------------------------------------
                                                                2004                           2003
                                                    -----------------------------  -----------------------------
                                                                     Weighted-                      Weighted-
                                                      Number of       Average        Number of       Average
                                                        Common       Exercise          Common       Exercise
                                                        Shares         Price           Shares         Price
                                                    -------------- --------------  -------------- --------------

Outstanding, beginning of year....................     4,627,856    $     15.45       4,409,558    $     16.20
Granted...........................................       566,070          11.24         572,504           9.00
Exercised.........................................       (18,542)          9.07              --          15.63
Canceled..........................................      (845,401)         14.68        (354,206)         14.13
                                                    --------------                 --------------
Outstanding, end of year..........................     4,329,983    $     15.05       4,627,856    $     15.45
                                                    ==============                 ==============

At December 31, 2004, 2,793,742 of outstanding stock options were exercisable, with a weighted-average exercise
price of $15.89. The exercise prices of exercisable stock options ranged from $7.93 to $16.20 per share. At
December 31, 2004 the weighted-average remaining contractual life for all options outstanding was 7.8 years.

Key Assumptions Used in Option Valuation:                                           Year Ended December 31,
                                                                                  -----------------------------
                                                                                       2004           2003
                                                                                  -------------- --------------

Weighted-average expected volatility...........................................        30.8%          43.7%
Weighted-average interest rate.................................................         4.2%           3.5%
Weighted-average common share dividend yield...................................         1.5%           1.8%

Restricted stock units and restricted stock

We record deferred compensation for the fair value of restricted stock unit awards and present deferred
compensation as a separate, offsetting component of stockholders’ equity. We recognized compensation expense
over the vesting period of the RSUs.

Generally, shares underlying those awards which are or become vested will be issued on the later of June 26,
2006 or each employee’s and each director’s respective termination or retirement.

RSU Activity at Weighted-Average Issue Price:                         Year Ended December 31,
                                                    ------------------------------------------------------------
                                                                2004                           2003
                                                    -----------------------------  -----------------------------
                                                                       Issue                          Issue
                                                         RSUs          Price            RSUs          Price
                                                    -------------- --------------  -------------- --------------

Outstanding, beginning of year....................     1,436,843    $     10.47         573,477    $     13.95
Awarded to officers and directors.................       213,045          11.59         701,598           7.95
Issued to officers in satisfaction of
  deferred compensation liabilities...............            --          --            161,768           9.07
                                                    --------------                 --------------
Outstanding, end of year..........................     1,649,888    $     10.61       1,436,843    $     10.47
                                                    ==============                 ==============

In addition to the RSU activity above, 1,818,560 RSUs are subject to future issuance based on the achievement
of performance criteria established under certain of our incentive plans.

Management restructuring expense and employment agreements

We have entered into agreements with certain key executives of the Company that will, in certain circumstances,
provide separation benefits upon the termination of the executive’s employment by the company for reasons other
than death, disability, cause or retirement, or by the executive for “good reason,” as defined in the
agreements.


                                                     F-49




For most of these executives, the agreements provide this protection only if the termination occurs following
(or is effectively connected with) the occurrence of a change of control, as defined in the agreements. Upon a
change in control, as defined, we are required to make an irrevocable contribution to a trust as soon as
possible following such change in control in an amount equal to pay such benefits payable under such
agreements.

We recorded a non-recurring expense of $33.7 million ($21.9 million after income taxes), $11.4 million ($7.2
million after income taxes) and $43.4 million ($28.5 million after income taxes) in 2004, 2003 and 2002,
respectively, primarily in connection with organizational and employment-related costs. The 2004 charges relate
mainly to the sale of our retail affiliated broker-dealer operations and the outsourcing of our information
technology infrastructure services. Reserves for management restructuring agreements are not material to our
consolidated financial statements at December 31, 2004 and 2003.

12.  Other Comprehensive Income

We record unrealized gains and losses on available-for-sale securities, minimum pension liability adjustments
in excess of unrecognized prior service cost, foreign currency translation gains and losses and effective
portions of the gains or losses on derivative instruments designated as cash flow hedges in accumulated other
comprehensive income. Unrealized gains and losses on available-for-sale securities are recorded in other
comprehensive income until the related securities are sold, reclassified or deemed to be impaired. Minimum
pension liability adjustments in excess of unrecognized prior service cost are adjusted or eliminated in
subsequent periods to the extent that plan assets exceed accumulated benefits. Foreign currency translation
gains and losses are recorded in accumulated other comprehensive income. We also consider unrealized foreign
currency losses when evaluating investments for impairment. The effective portions of the gains or losses on
derivative instruments designated as cash flow hedges are reclassified into earnings in the same period in
which the hedged transaction affects earnings. If it is probable that a hedged forecasted transaction will no
longer occur, the effective portions of the gains or losses on derivative instruments designated as cash flow
hedges are reclassified into earnings immediately.

                                                                 Year Ended December 31,
Sources of Other Comprehensive Income:       ------------------------------------------------------------------
($ amounts in millions)                             2004                   2003                 2002
                                             -------------------- ---------------------- ----------------------
                                               Gross       Net       Gross       Net       Gross        Net
                                             --------- ---------- ----------- ---------- --------- ------------

Unrealized gains (losses) on  investments..   $  39.2   $  26.7    $  131.8   $  159.6   $  603.4   $   104.6
Net realized investment losses on
  available-for-sale securities
  included in net income...................     (43.0)    (22.4)     (113.9)     (74.0)     (50.5)      (32.8)
                                             --------- ---------- ----------- ---------- --------- ------------
Net unrealized investment gains............      (3.8)      4.3        17.9       85.6      552.9        71.8
Minimum pension liability adjustment.......     (26.5)    (17.2)        1.7        1.1      (26.8)      (17.4)
Net unrealized foreign currency
  translation adjustment ..................      (4.6)     (0.6)       11.9        8.2        7.1         1.2
Net unrealized derivative instruments
  and other gains (losses).................       4.6       7.8        41.6       40.3     (128.0)     (129.9)
                                             --------- ---------- ----------- ---------- --------- ------------
Other comprehensive income (loss)..........     (30.3)  $  (5.7)       73.1   $  135.2      405.2   $   (74.3)
                                             --------- ========== ----------- ========== --------- ============
Applicable policyholder
  dividend obligation......................       3.6                 (45.5)                369.4
Applicable deferred policy acquisition
  cost amortization........................      (7.7)                (12.4)                 95.9
Applicable deferred income taxes (benefit).     (20.5)                 (4.2)                 14.2
                                             -----------          -----------           -----------
Offsets to other comprehensive income......     (24.6)                (62.1)                479.5
                                             -----------          -----------           -----------
Other comprehensive income (loss)..........   $  (5.7)             $  135.2              $  (74.3)
                                             ===========          ===========           ===========

                                                     F-50


                                                                            As of December 31,
Components of Accumulated Other Comprehensive Income:      ----------------------------------------------------
($ amounts in millions)                                              2004                      2003
                                                           -------------------------- -------------------------
                                                               Gross         Net         Gross         Net
                                                           ------------ ------------- ------------ ------------

Unrealized gains on investments.........................    $    808.1   $    211.6    $   812.0    $   207.3
Minimum pension liability adjustment (Note 11)..........         (73.8)       (47.9)       (47.3)       (30.7)
Unrealized foreign currency translation adjustment......           5.7          3.5         10.3          4.1
Unrealized losses on derivative instruments and other...        (125.0)      (109.2)      (129.7)      (117.0)
                                                           ------------ ------------- ------------ ------------
Accumulated other comprehensive income..................         615.0   $     58.0        645.3    $    63.7
                                                           ------------ ============= ------------ ============
Applicable policyholder dividend obligation.............         436.3                     432.7
Applicable deferred policy acquisition costs............          86.4                      94.1
Applicable deferred income taxes........................          34.3                      54.8
                                                           ------------               ------------
Offsets to accumulated other comprehensive income.......         557.0                     581.6
                                                           ------------               ------------
Accumulated other comprehensive income..................    $     58.0                 $    63.7
                                                           ============               ============


13.  Earnings Per Share

We calculate earnings per share, EPS, on two bases: basic and diluted. We calculate basic EPS by dividing
earnings available to common stockholders by the weighted-average number of common shares outstanding during
the period. We calculate diluted EPS similarly except that, if applicable, we adjust earnings to reflect
earnings had the dilutive potential common shares been issued during the period, and we increase the
weighted-average number of shares to include the issuance of the dilutive potential common shares.

                                                                             Year Ended December 31,
Shares Used in Calculation of Earnings Per Share:                 ---------------------------------------------
(shares in thousands)                                                  2004            2003           2002
                                                                  --------------  -------------- --------------

Weighted-average common shares outstanding......................        94,676          94,218         97,854
                                                                  --------------  -------------- --------------
Weighted-average effect of dilutive potential common shares:
    Restricted stock units awarded and outstanding..............         1,510           1,236            143
    Employee stock options assumed issued.......................           101              12             --
    Equity units assumed issued.................................         4,488           1,096             --
                                                                  --------------  -------------- --------------
Potential common shares.........................................         6,099           2,344            143
Less:  Potential common shares excluded from calculation
  due to operating losses.......................................            --           2,344            143
                                                                  --------------  -------------- --------------
Dilutive potential common shares................................         6,099              --             --
                                                                  --------------  -------------- --------------
Weighted-average common shares outstanding, including
  dilutive potential common shares..............................       100,775          94,218         97,854
                                                                  ==============  ============== ==============

Employee stock options and equity units excluded from
  calculation due to anti-dilutive exercise prices
  (i.e., in excess of average common share market prices)
    Stock options...............................................         3,632           4,187          4,410
    Equity units................................................            --              --         17,424

There are no adjustments to net income (loss) for the years 2004, 2003 and 2002 for purposes of calculating
earnings per share.

14.  Discontinued Operations

During the first quarter of 2004, we sold 100% of the common stock held by us in Phoenix National Trust
Company. The financial statement effect of this transaction is not material to our consolidated financial
statements. The net after-tax income (loss) included in discontinued operations for the years ended 2004, 2003
and 2002 was $0.1 million, $(2.1) million and $(1.3) million, respectively.

                                                     F-51



During 1999, we discontinued our reinsurance operations as further described in Note 17.

We have excluded assets and liabilities of the discontinued operations from the assets and liabilities of
continuing operations and on a net basis included them in other assets on our consolidated balance sheet.

15.  Phoenix Life Statutory Financial Information and Regulatory Matters

Our insurance subsidiaries are required to file, with state regulatory authorities, annual statements prepared
on an accounting basis prescribed or permitted by such authorities.

As of January 1, 2001 the New York State Insurance Department adopted the NAIC, Codification of Statutory
Accounting Principles guidance, with the exception for accounting for deferred income taxes. Codification
guidance replaced the accounting practices and procedures manual as the NAIC's primary guidance on statutory
accounting; it also provides guidance for areas where statutory accounting has been silent and changed current
statutory accounting in other areas. The effect of adoption decreased the statutory surplus of our insurance
subsidiaries by $66.4 million, primarily as a result of non-admitting certain assets and recording increased
investment reserves. As of December 31, 2002, the New York State Insurance Department adopted the NAIC
codification guidance for accounting for deferred income taxes.

As of December 31, 2004, statutory surplus differs from equity reported in accordance with GAAP for life
insurance companies primarily as follows:

    •   policy acquisition costs are expensed when incurred;
    •   investment reserves are based on different assumptions;
    •   surplus notes are included in surplus rather than debt;
    •   postretirement benefit expense allocated to Phoenix Life relate only to vested participants and expense
        is based on different assumptions and reflect a different method of adoption;
    •   life insurance reserves are based on different assumptions; and
    •   net deferred income tax assets in excess of 10% of previously filed statutory capital and surplus are
        not recorded.

                                                                     As of or for the Year Ended December 31,
Statutory Financial Data for Phoenix Life:                        ---------------------------------------------
($ amounts in millions)                                               2004            2003           2002
                                                                  --------------  -------------- --------------

Statutory capital, surplus, and surplus notes...................   $     814.6     $     762.9    $     861.0
Asset valuation reserve, or AVR.................................         213.6           198.6          147.0
                                                                  --------------  -------------- --------------
Statutory capital, surplus, surplus notes and AVR...............   $   1,028.2     $     961.5    $   1,008.0
                                                                  ==============  ============== ==============
Statutory gain from operations..................................   $      35.1     $      69.7    $      44.5
                                                                  ==============  ============== ==============
Statutory net income............................................   $      47.1     $      21.5    $       7.5
                                                                  ==============  ============== ==============

New York Insurance Law requires that New York life insurers report their RBC. RBC is based on a formula
calculated by applying factors to various assets, premium and statutory reserve items. The formula takes into
account the risk characteristics of the insurer, including asset risk, insurance risk, interest rate risk and
business risk. New York Insurance Law gives the New York Superintendent of Insurance explicit regulatory
authority to require various actions by, or take various actions against, insurers whose total adjusted capital
does not exceed certain RBC levels. Each of the United States insurance subsidiaries of Phoenix Life is also
subject to these same RBC requirements. Phoenix Life and each of its insurance subsidiaries' RBC was in excess
of 300% of Company Action Level (the level where a life insurance enterprise must submit a comprehensive plan
to state insurance regulators) as of December 31, 2004 and 2003.

                                                     F-52


Under New York Insurance Law, Phoenix Life can pay stockholder dividends to us in any calendar year without
prior approval from the New York State Insurance Department in the amount of the lesser of 10% of Phoenix
Life's surplus to policyholders as of the immediately preceding calendar year or Phoenix Life's statutory net
gain from operations for the immediately preceding calendar year, not including realized capital gains. Phoenix
Life paid dividends of $69.7 million in 2004 and is able to pay $35.1 million in dividends in 2005 without
prior approval from the New York State Insurance Department. Any additional dividend payments, in excess of
$35.1 million in 2005, would be subject to the discretion of the New York Superintendent of Insurance.

16.  Premises and Equipment

Premises and equipment, consisting primarily of office buildings occupied by us, are stated at cost less
accumulated depreciation and amortization. We depreciate buildings on the straight-line method over 10 to 45
years and equipment primarily on a modified accelerated method over 3 to 10 years. We amortize leasehold
improvements over the terms of the related leases.

                                                                        As of December 31,
Cost and Carrying Value of Premises and Equipment:  -----------------------------------------------------------
($ amounts in millions)                                         2004                          2003
                                                    ----------------------------- -----------------------------
                                                                      Carrying                      Carrying
                                                         Cost           Value          Cost           Value
                                                    -------------- -------------- -------------- --------------

Real estate........................................  $     116.0    $      45.7    $     148.8    $      63.5
Equipment..........................................        178.0           26.0          188.3           31.8
Leasehold improvements.............................          8.5            3.3           10.5            6.8
                                                    -------------- -------------- -------------- --------------
Premises and equipment cost and carrying value.....        302.5    $      75.0          347.6    $     102.1
                                                                   ==============                ==============
Accumulated depreciation and amortization..........       (227.5)                       (245.5)
                                                    --------------                --------------
Premises and equipment.............................  $      75.0                   $     102.1
                                                    ==============                ==============

Depreciation and amortization expense for premises and equipment for 2004, 2003 and 2002 totaled $13.5 million,
$19.3 million and $21.4 million, respectively.

On May 25, 2004, we sold our Enfield, Connecticut office facility for a loss of $1.0 million ($0.7 million
after-tax). In anticipation of that sale, we had recorded a $6.2 million ($4.0 million after-tax) realized
impairment loss in 2003.

Rental expenses for operating leases for continuing operations, principally with respect to buildings, amounted
to $10.5 million, $11.4 million and $12.1 million in 2004, 2003 and 2002, respectively. Future minimum rental
payments under non-cancelable operating leases for continuing operations were $31.0 million as of December 31,
2004, payable as follows: 2005, $8.8 million; 2006, $7.8 million; 2007, $6.5 million; 2008, $4.2 million; 2009,
$1.9 million and thereafter, $1.8 million.

17.  Contingent Liabilities

In addition to the matters discussed below, we are, in the normal cause of business, involved in litigation
both as a defendant and as a plaintiff. The litigation naming us as a defendant ordinarily involves our
activities as an insurer, employer, investment advisor, investor or taxpayer. In addition, various regulatory
bodies regularly make inquiries of us and, from time to time, conduct examinations or investigations concerning
our compliance with, among other things, insurance laws, securities laws and laws governing the activities of
broker-dealers. While it is not feasible to predict or determine the ultimate outcome of all pending
investigations and legal proceedings or to provide reasonable ranges of potential losses, we believe that their
outcomes are not likely, either individually or in the aggregate, to have a material adverse effect on our
consolidated financial condition. However, given the large or indeterminate amounts sought in certain of these
matters and litigation's inherent unpredictability, it is

                                                     F-53


possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on
our results of operations or cash flows.

Recently, there has been a significant increase in federal and state regulatory activity relating to financial
services companies, particularly mutual fund companies. These regulatory inquiries have focused on a number of
mutual fund issues, including late-trading and valuation issues. Our mutual funds, which we offer directly to
retail investors and qualified retirement plans as well as through the separate accounts associated with
certain of our variable life insurance policies and variable annuity products, entitle us to impose
restrictions on frequent exchanges and trades in the mutual funds and on transfers between sub-accounts and
variable products. We, like many others in the financial services industry, have received requests for
information from the SEC and state authorities, in each case requesting documentation and other information
regarding various mutual fund regulatory issues. We continue to cooperate fully with these regulatory agencies
in responding to these requests. In addition, representatives from the SEC's Office of Compliance, Inspections
and Examinations are conducting compliance examinations of our mutual fund, variable annuity and mutual fund
transfer agent operations.

A number of companies have announced settlements of enforcement actions with various regulatory agencies,
primarily the SEC and the New York Attorney General's Office. While no such action has been initiated against
us, it is possible that one or more regulatory agencies may pursue an action against us in the future.

These types of lawsuits and regulatory actions may be difficult to assess or quantify, may seek recovery of
indeterminate amounts, including punitive and treble damages, and the nature and magnitude of their outcomes
may remain unknown for substantial periods of time. While it is not feasible to predict or determine the
ultimate outcome of all pending investigations and legal proceedings or to provide reasonable ranges of
potential losses, we believe that their outcomes are not likely, either individually or in the aggregate, to
have a material adverse effect on our consolidated financial condition.

Discontinued Reinsurance Operations

In 1999, we discontinued our reinsurance operations through a combination of sale, reinsurance and placement of
certain retained group accident and health reinsurance business into run-off. We adopted a formal plan to stop
writing new contracts covering these risks and to end the existing contracts as soon as those contracts would
permit. However, we remain liable for claims under those contracts. We also purchased aggregate excess-of-loss
reinsurance to further protect us from unfavorable results from this discontinued business. On February 7, 2005
we notified the aggregate excess-of-loss reinsurer that we were exercising our option to commute this contract.
The commutation will be effective during the second quarter of 2005. The effect of the commutation will not be
material to our consolidated financial statements.

We have established reserves for claims and related expenses that we expect to pay on our discontinued group
accident and health reinsurance business. These reserves are based on currently known facts and estimates
about, among other things, the amount of insured losses and expenses that we believe we will pay, the period
over which they will be paid, the amount of reinsurance we believe we will collect under our aggregate
excess-of-loss reinsurance, the amounts we believe we will collect from our retrocessionaires and the likely
legal and administrative costs of winding down the business.

Our total reserves, including coverage available from our aggregate excess-of-loss reinsurance and reserves for
amounts recoverable from retrocessionaires, were $110.0 million as of December 31, 2004. Our total amounts
recoverable from retrocessionaires related to paid losses were $60.0 million as of December 31, 2004. We did
not recognize any gains or losses related to our discontinued group accident and health reinsurance business
during the years ended December 31, 2004, 2003 and 2002, respectively.

We expect our reserves and reinsurance to cover the run-off of the business; however, the nature of the
underlying risks is such that the claims may take years to reach the reinsurers involved. Therefore, we expect
to pay claims out of existing estimated reserves for up to ten years as the level of business diminishes. In
addition, unfavorable

                                                     F-54


or favorable claims and/or reinsurance recovery experience is reasonably possible and could result in our
recognition of additional losses or gains, respectively, in future years. Given the uncertainty associated with
litigation and other dispute resolution proceedings, as described below, as well as the lack of sufficient
claims information (which has resulted from disputes among ceding reinsurers leading to delayed processing,
reporting blockages and standstill agreements among reinsurers), the range of any reasonably possible
additional future losses or gains is not currently estimable. However, it is our opinion, based on current
information and after consideration of the provisions made in these financial statements, as described above,
that any future adverse or favorable development of recorded reserves and/or reinsurance recoverables will not
have a material effect on our financial position.

Additional information with respect to our group accident and health reinsurance run-off exposures follows:

Unicover Managers, Inc.

A significant portion of the claims arising from our discontinued group accident and health reinsurance
business arises from the activities of Unicover Managers, Inc., or Unicover. Unicover organized and managed a
group, or pool, of insurance companies, or Unicover pool, and two other facilities, or Unicover facilities,
which reinsured the life and health insurance components of workers' compensation insurance policies issued by
various property and casualty insurance companies. We were a member of the Unicover pool but terminated our
participation in the pool effective March 1, 1999.

We are involved in disputes relating to the activities of Unicover. Under Unicover's underwriting authority,
the Unicover pool and Unicover facilities wrote a dollar amount of reinsurance coverage that was many times
greater than originally estimated. As a member of the Unicover pool, we were involved in several proceedings in
which the pool members asserted that they could deny coverage to certain insurers that claimed that they
purchased reinsurance coverage from the pool. Those matters were settled. Also, the pool members were involved
in proceedings arising from business ceded to the London market. Those proceedings were settled.

Further, we were, along with Sun Life Assurance of Canada, or Sun Life, and Cologne Life Reinsurance Company,
or Cologne Life, a retrocessionaire (meaning a reinsurer of other reinsurers) of the Unicover pool and two
other Unicover facilities, providing the pool and facility members with reinsurance of the risks that the pool
and facility members had assumed. In September 1999, we joined an arbitration proceeding that Sun Life had
begun against the members of the Unicover pool and the Unicover facilities. In this arbitration, we and Sun
Life sought to cancel our retrocession agreements on the grounds that material misstatements and nondisclosures
were made to us about, among other things, the amount of risks we would be reinsuring. The arbitration
proceeded only with respect to the Unicover pool because we, Sun Life and Cologne Life reached settlement with
the two Unicover facilities in the first quarter of 2000. In October 2002, the arbitration panel issued its
decision that the agreement by which we provided retrocessional reinsurance to the pool was valid only to the
extent of business bound or renewed to that agreement on or before August 31, 1998. This decision had the
effect of granting us a substantial discount on our potential liabilities, because most of the business was
bound or renewed to the agreement after August 31, 1998. In a clarification dated January 4, 2003, the
arbitration panel confirmed its decision. Subsequently, billing disputes have arisen between certain pool
members and the retrocessionaires, including us, concerning certain losses ceded to the retrocession
agreements. A significant portion of our remaining potential liabilities as a retrocessionaire of the Unicover
pool has been recovered from certain of our retrocessionaires, and additional amounts may be recovered from one
other retrocessionaire, as discussed below under "Related Proceedings."

In one of the Unicover facilities' settlements, the Reliance facility settlement of January 2000, we paid a
settlement amount of $97.9 million and were released from all of our obligations as a retrocessionaire of the
facility. Subsequently, we were reimbursed by one of our retrocessionaires for $38.8 million of the amount we
paid under the settlement. A significant portion of the remainder of the settlement payment may be recovered
from one other retrocessionaire, as discussed below under "Related Proceedings."

                                                     F-55


In the other Unicover facilities' settlement, the Lincoln facility settlement of March 2000, we paid a
settlement amount of $11.6 million and were released from all of our obligations as a retrocessionaire of the
facility. Subsequently, we were reimbursed by one of our retrocessionaires for $6.0 million of the amount we
paid under the settlement.

The amounts paid and the results achieved in the above settlements and arbitration decision were consistent
with the amounts previously reflected in our consolidated financial statements.

Related Proceedings

In our capacity as a retrocessionaire of the Unicover business, we had an extensive program of our own
reinsurance in place to protect us from financial exposure to the risks we had assumed. We have been involved
in disputes with certain of our own retrocessionaires who had sought on various grounds to avoid paying any
amounts to us. Most of those disputes, as described below, have been resolved.

Currently, we remain involved in a London arbitration proceeding with one of those retrocessionaires. The
arbitration concerns an agreement under which the retrocessionaire reinsures us for up to $45 thousand per loss
in excess of a $5 thousand retention. In June 2003, the arbitration panel issued its decision, which upheld in
all material respects the retrocessional obligations to us. The retrocessionaire appealed the arbitration
decision only with respect to the Unicover business. We received a favorable decision from the Court of Appeal
in December 2004. The retrocessionaire submitted a request to the House of Lords to review the decision. Two
other disputes with this retrocessionaire were settled in March 2004 and did not have a material effect on our
reinsurance recoverable balances. As of December 31, 2004, the reinsurance recoverable balance from this
retrocessionaire related to paid losses was $45.0 million, subject to further development.

A dispute with another retrocessionaire was the subject of arbitration proceedings that we initiated in
December 2003. The purpose of the arbitration proceedings was to confirm the validity and enforce the terms of
the retrocessional contracts. In December 2004, we settled the dispute and discontinued the arbitration
proceedings. The amount received and the results achieved in the settlement were consistent with the amounts
previously reflected in our consolidated financial statements. As of December 31, 2004, the reinsurance
recoverable balance from this retrocessionaire was $0.0 million.

A dispute with a third retrocessionaire, which sought to avoid an excess-of-loss retrocession agreement, a
surplus share retrocession agreement and a quota share retrocession agreement, was the subject of an
arbitration in November 2003. In December 2003, the arbitration panel issued its interim decision, which is
confidential. The financial implications of the interim decision are consistent with our current financial
provisions. Since then, this retrocessionaire has paid $8.0 million to bring the account current. As of
December 31, 2004, the reinsurance recoverable balance from this retrocessionaire related to paid losses was
$0.0 million, subject to further development. In June 2004 the arbitration panel relinquished its jurisdiction.

Because the same retrocession program that covers our Unicover business covers a significant portion of our
other remaining group accident and health reinsurance business, we could have additional material losses if one
or more of our remaining retrocessionaires disputes and successfully avoids its obligations. At this stage, we
cannot estimate the amount at risk related to these potential disputes with a reliable degree of certainty.
This is due in part to our lack of sufficient claims information (which has resulted from disputes among ceding
reinsurers that have led to delayed processing, reporting blockages, and standstill agreements among
reinsurers). This applies with regard both to business related to Unicover and business not related to
Unicover.

Other Proceedings

Another set of disputes involves personal accident business that was reinsured in the London reinsurance market
in which we participated from 1994 to 1997. These disputes involve multiple layers of reinsurance and
allegations that the reinsurance programs created by the brokers involved in placing those layers were
interrelated

                                                     F-56


and devised to disproportionately pass losses to a top layer of reinsurers. Many companies who participated in
this business are involved in litigation or arbitration in attempts to avoid their obligations on the basis of
misrepresentation. Because of the complexity of the disputes and the reinsurance arrangements, we and many of
these companies have participated in negotiations that have resulted in settlements of disputes relating to the
1994 and 1995 contract years. The amounts paid and the results achieved in the 1994 and 1995 contract year
settlements are consistent with the amounts previously reflected in our consolidated financial statements.
Although we are vigorously defending our contractual rights in respect of the 1996 and 1997 contract year
disputes, we remain actively involved in attempts to reach negotiated business solutions. At this stage, we
cannot predict the outcome, nor can we estimate the remaining amount at risk with a reliable degree of
certainty. This is due in part to our lack of sufficient claims information (which has resulted from disputes
among ceding reinsurers that have led to delayed processing, reporting blockages, and standstill agreements
among reinsurers). However, it is our opinion based on current information that amounts included in our
reserves as of December 31, 2004 are adequate with respect to the 1996 and 1997 contract year disputes.

18.  Other Commitments

During the third quarter of 2004, we entered into a seven-year information technology infrastructure services
agreement with Electronic Data Systems, or EDS, under which we expect to make aggregate payments of
approximately $120.0 million.

During the normal course of business, the Company enters into agreements to fund venture capital partnerships
and to purchase private placement investments. As of December 31, 2004, the Company had committed $182.6
million under such investments, of which $50.8 million is expected to be disbursed by December 31, 2005.

19.  Condensed Financial Information of The Phoenix Companies, Inc.

A summary of The Phoenix Companies, Inc. (parent company only) financial information follows:

                                                                                        As of December 31,
Parent Company Financial Position:                                                -----------------------------
($ amounts in millions)                                                                2004           2003
                                                                                  -------------- --------------
Assets
Cash and cash equivalents......................................................    $      61.0    $      22.8
Investment in Phoenix Life.....................................................        1,700.9        1,637.6
Investment in Phoenix Investment Partners......................................          226.3          231.0
Investments in other subsidiaries..............................................          105.7          123.5
Loans to Phoenix Investment Partners...........................................          366.0          377.0
Advances to subsidiaries.......................................................          208.9          234.2
Hilb Rogal and Hobbs, or HRH, common stock, at fair value (Note 5).............          131.3          116.2
Intangible assets (Note 11)....................................................            8.0           11.0
Deferred income taxes..........................................................           39.0           21.6
Other assets...................................................................          111.2          103.2
                                                                                  -------------- --------------
Total assets...................................................................    $   2,958.3    $   2,878.1
                                                                                  ============== ==============
Liabilities and Stockholders' Equity
Stock purchase contracts (Note 6)..............................................    $     131.9    $     128.8
Indebtedness (Note 6)..........................................................          461.7          464.0
Accrued pension and postemployment benefits (Note 11)..........................          275.1          281.1
Other liabilities..............................................................           67.2           56.4
                                                                                  -------------- --------------
Total liabilities..............................................................          935.9          930.3
Total stockholders' equity.....................................................        2,022.4        1,947.8
                                                                                  -------------- --------------
Total liabilities and stockholders' equity.....................................    $   2,958.3    $   2,878.1
                                                                                  ============== ==============

                                                     F-57


                                                                              Year Ended December 31,
Parent Company Results of Operations:                            ----------------------------------------------
($ amounts in millions)                                               2004            2003            2002
                                                                 --------------  --------------  --------------
Revenues
Dividends received from subsidiary, Phoenix Life................  $      69.7     $      44.5     $     113.8
Investment income, principally from subsidiary,
  Phoenix Investment Partners...................................         22.5            23.0            15.2
Net realized investment gains...................................         --              (0.1)            1.7
                                                                 --------------  --------------  --------------
Total revenues..................................................         92.2            67.4           130.7
                                                                 --------------  --------------  --------------
Interest expense................................................         27.4            26.9            15.8
Demutualization expense.........................................         --              --               1.8
Other operating expenses........................................         25.9            18.8             7.2
                                                                 --------------  --------------  --------------
Total expenses..................................................         53.3            45.7            24.8
                                                                 --------------  --------------  --------------
Income before income taxes and equity in undistributed losses
  of subsidiaries...............................................         38.9            21.7           105.9
Income tax benefit..............................................        (12.3)           (8.5)           (2.2)
                                                                 --------------  --------------  --------------
Income before equity in undistributed earnings of subsidiaries..         51.2            30.2           108.1
Equity in undistributed earnings (losses) of subsidiaries.......         35.2           (36.4)         (380.4)
                                                                 --------------  --------------  --------------
Net income (loss)...............................................  $      86.4     $      (6.2)    $    (272.3)
                                                                 ==============  ==============  ==============


                                                                               Year Ended December 31,
Parent Company Cash Flows:                                       ----------------------------------------------
($ amounts in millions)                                                2004            2003           2002
                                                                 ---------------  -------------- --------------
Operating Activities
Cash dividends received from subsidiary.........................  $      69.7     $      44.5     $     67.0
Investment income received......................................         10.6             9.7           11.7
Interest, income taxes and other expenses paid, net.............        (19.1)          (21.0)         (17.4)
                                                                 ---------------  -------------- --------------
Cash from operating activities..................................         61.2            33.2           61.3
                                                                 ---------------  -------------- --------------
Advances to subsidiaries and capital contributed to subsidiaries         (4.0)           (7.8)        (287.4)
Purchase of subsidiaries........................................         (4.0)          (17.9)          --
Equity security purchases.......................................         --              --           (157.4)
Debt and equity security sales..................................         --              --             72.8
                                                                 ---------------  -------------- --------------
Cash for investing activities...................................         (8.0)          (25.7)        (372.0)
                                                                 ---------------  -------------- --------------
Stock purchase contract and indebtedness proceeds...............         --              --            133.9
Equity units proceeds...........................................         --              --            149.1
Common stock issuance...........................................          0.1            --             --
Common stock repurchase.........................................         --              --           (131.1)
Common stock dividend paid......................................        (15.1)          (15.1)         (15.8)
Payments to subsidiary to reimburse policyholder
  credits and payments in lieu of stock.........................         --              --             --
                                                                 ---------------  -------------- --------------
Cash (for) from financing activities............................        (15.0)          (15.1)         136.1
                                                                 ---------------  -------------- --------------
Change in cash and cash equivalents.............................         38.2            (7.6)        (174.6)
Cash and cash equivalents, beginning of year....................         22.8            30.4          205.0
                                                                 ---------------  -------------- --------------
Cash and cash equivalents, end of year..........................  $      61.0     $      22.8     $     30.4
                                                                 ===============  ============== ==============


20.  Additional Operating Cash Flow Information

Cash and cash equivalents

Cash and cash equivalents consist of cash and short-term investments with original maturities of 90 days or
less.

                                                     F-58


                                                                            Years Ended December 31,
Operating Cash Flows on Indirect Basis:                          ----------------------------------------------
($ amounts in millions)                                               2004            2003            2002
                                                                 --------------  --------------  --------------
OPERATING ACTIVITIES
Income (loss) from continuing operations........................  $      86.3     $      (4.1)    $    (140.7)
Net realized investment losses..................................          0.8            98.5           133.9
Unrealized gain on trading equity securities....................        (85.9)           --              --
Amortization and depreciation...................................         49.1            52.5           122.4
Investment (gains) loss.........................................        (73.6)           78.5            74.4
Equity in (earnings) losses of affiliates.......................         17.2             2.0            (7.2)
Deferred income tax (benefit) expense...........................         48.5           (11.9)          (42.4)
Decrease (increase) in receivables..............................         38.3            (7.7)           (8.3)
Deferred policy acquisition costs increase......................        (54.5)         (111.4)         (206.4)
Increase in policy liabilities and accruals.....................         60.1           454.1           473.4
Other assets and other liabilities net change...................        (27.2)         (152.9)          (75.6)
                                                                 --------------  --------------  --------------
Cash from continuing operations.................................         59.1           397.6           323.5
Discontinued operations, net....................................         14.9           (36.5)          (59.1)
                                                                 --------------  --------------  --------------
Cash from operating activities..................................  $      74.0     $     361.1     $     264.4
                                                                 ==============  ==============  ==============


21.  Supplemental Unaudited Financial Information

                                                                          Quarter Ended
Summarized Selected Quarterly Financial Data:        ----------------------------------------------------------
($ amounts in millions, except per share amounts)       Mar 31,       June 30,       Sept 30,        Dec 31,
                                                     -------------- -------------- -------------  -------------
                                                                               2004
                                                     ----------------------------------------------------------

Revenues...........................................   $    671.0     $    666.9     $    661.9     $    743.4

Income from  continuing operations.................   $     16.3     $     14.6     $      7.1     $     48.3

Net income.........................................   $     16.6     $     14.4     $      7.1     $     48.3

Earnings per share:
  Basic............................................   $     0.18     $     0.14     $     0.07     $     0.51
  Diluted..........................................   $     0.16     $     0.14     $     0.07     $     0.48


                                                                          Quarter Ended
 Summarized Selected Quarterly Financial Data:       ----------------------------------------------------------
($ amounts in millions, except per share amounts)        Mar 31,       June 30,       Sept 30,        Dec 31,
                                                     -------------- -------------- -------------  -------------
                                                                               2003
                                                     ----------------------------------------------------------

Revenues...........................................   $    661.3     $    557.7     $    698.6     $    715.9

Income (loss) from continuing operations...........   $      1.7     $    (49.2)    $     13.6     $     29.8

Net income (loss)..................................   $      1.3     $    (49.6)    $     13.2     $     28.9

Earnings (loss) per share:
  Basic............................................   $     0.01     $    (0.53)    $     0.14     $     0.31
  Diluted..........................................   $     0.01     $    (0.53)    $     0.13     $     0.29

                                                     F-59


Revenues as reported above differ from amounts previously reported in our respective Quarterly Reports on Form
10-Q due to our equity in earnings of affiliates, which was reclassified from revenue to "equity in
undistributed earnings of affiliates" on our consolidated statement of income and comprehensive income. The
2004 amounts reclassified were $(2.8) million, $0.0 million and $1.0 million for the first, second and third
quarter, respectively. The 2003 amounts reclassified were $2.1 million, $(0.8) million and $0.0 million for the
first, second and third quarter, respectively.


                                                     F-60


                                                 EXHIBIT INDEX

  Exhibit
- ------------

      3.1      Form of Amended and Restated Certificate of Incorporation of The Phoenix Companies, Inc.
               (incorporated herein by reference to Exhibit 3.1 to The Phoenix Companies, Inc. Registration
               Statement on Form S-l (Registration No. 333-73896), filed on November 21, 2001, as amended)

      3.2      Form of By-Laws of The Phoenix Companies, Inc., as amended June 5, 2003*

     10.1      Phoenix Home Life Mutual Insurance Company Long-term Incentive Plan (incorporated herein by
               reference to Exhibit 10.1 to The Phoenix Companies, Inc. Registration Statement on Form S-l
               (Registration No. 333- 55268), filed on February 9, 2001, as amended)

     10.2      The Phoenix Companies, Inc. Stock Incentive Plan (incorporated herein by reference to Exhibit
               10.2 to The Phoenix Companies, Inc. Registration Statement on Form S-l (Registration No.
               333-55268), filed on February 9, 2001, as amended)

     10.3      Form of Incentive Stock Option Agreement under The Phoenix Companies, Inc. Stock Incentive Plan*

     10.4      Form of Non-Qualified Stock Option Agreement under The Phoenix Companies, Inc. Stock Incentive
               Plan*

     10.5      The Phoenix Companies, Inc. Performance Incentive Plan (incorporated herein by reference to
               Exhibit 10.3 to The Phoenix Companies, Inc. Registration Statement on Form S-1 (Registration No.
               333-55268), filed on February 9, 2001, as amended)

     10.6      The Phoenix Companies, Inc. Directors Stock Plan (incorporated herein by reference to Exhibit
               10.4 to The Phoenix Companies, Inc. Registration Statement on Form S-l (Registration No.
               333-55268), filed on February 9, 2001, as amended)

     10.7      The Phoenix Companies, Inc. Excess Benefit Plan (as amended and restated effective January 1,
               2003)*

     10.8      The Phoenix Companies, Inc. Non-Qualified Deferred Compensation and Excess Investment Plan as
               amended and restated effective as of January 1, 2004*

     10.9      The Phoenix Companies, Inc. Nonqualified Supplemental Executive Retirement Plan, as amended and
               restated effective as of January 1, 2004 (incorporated herein by reference to Exhibit 10.10 to
               The Phoenix Companies, Inc. Quarterly Report on Form 10-Q filed on November 9, 2004)

    10.10      The Phoenix Companies, Inc. Nonqualified Supplemental Executive Retirement Plan B effective as
               of August 1, 2004 (incorporated herein by reference to Exhibit 10.11 to The Phoenix Companies,
               Inc. Quarterly Report on Form 10-Q filed on November 9, 2004)

    10.11      Phoenix Investment Partners 2001 Phantom Option Plan (incorporated herein by reference to
               Exhibit 10.15 to The Phoenix Companies, Inc. Annual Report on Form 10-K filed March 21, 2003)

    10.12      Phoenix Investment Partners 2002 Phantom Option Plan (incorporated herein by reference to
               Exhibit 10.16 to The Phoenix Companies, Inc. Annual Report on Form 10-K filed March 21, 2003)

    10.13      The Phoenix Companies, Inc. 2003 Restricted Stock, Restricted Stock Unit and Long-Term Incentive
               Plan (incorporated herein by reference to Exhibit B to The Phoenix Companies, Inc. 2003 Proxy
               Statement, filed on March 21, 2003)

    10.14      Form of Notice to Participates under The Phoenix Companies, Inc. 2003 Restricted Stock,
               Restricted Stock Unit and Long-Term Incentive Plan*

    10.15      The Phoenix Companies, Inc. Executive Severance Allowance Plan effective as of January 1, 2005*

    10.16      Stockholder Rights Agreement dated as of June 19, 2001 (incorporated herein by reference to
               Exhibit 10.24

                                                      E-1


               to The Phoenix Companies, Inc. Registration Statement on Form S-l (Registration No. 333-73896),
               filed on November 21, 2001, as amended)

    10.17      Binder of Reinsurance dated as of September 30, 1999, between Phoenix Home Life Mutual Insurance
               Company, American Phoenix Life & Reassurance Company and European Reinsurance Company of
               Zurich (Bermuda Branch) (+) (incorporated herein by reference to Exhibit 10.36 to The Phoenix
               Companies, Inc. Registration Statement on Form S-1 (Registration No. 333-55268), filed on
               February 9, 2001, as amended)

    10.18      Amendment No. 1 dated as of February 1, 2000, to the Binder of Reinsurance, dated as of
               September 30, 1999, between Phoenix Home Life Mutual Insurance Company, American Phoenix Life &
               Reassurance Company and European Reinsurance Company of Zurich (Bermuda Branch) (+)
               (incorporated herein by reference to Exhibit 10.37 to The Phoenix Companies, Inc. Registration
               Statement on Form S-l (Registration No. 333-55268), filed on February 9, 2001, as amended)

    10.19      Acquisition Agreement dated as November 10, 1999, between Selling Management Shareholders,
               Aberdeen Asset Management PLC, The Standard Life Assurance Co., The Non-Selling Management
               Shareholders, Lombard International Assurance SA and PM Holdings, Inc. (incorporated herein by
               reference to Exhibit 10.43 to The Phoenix Companies, Inc. Registration Statement on Form S-l
               (Registration No. 333-55268), filed on February 9, 2001, as amended)

    10.20      Subordination Agreement dated as of June 11, 2001 between Phoenix Home Life Mutual Insurance
               Company and Phoenix Investment Partners, Ltd. (incorporated herein by reference to Exhibit 10.64
               to The Phoenix Companies, Inc. Registration Statement on Form S-l (Registration No. 333-55268),
               filed on February 9, 2001, as amended)

    10.21      Standstill Agreement dated May 18, 2001, between The Phoenix Companies, Inc. and State Farm
               Mutual Insurance Company (incorporated herein by reference to Exhibit 4.2 to The Phoenix
               Companies, Inc. Registration Statement on Form S-1 (Registration No. 333-55268), filed on
               February 9, 2001, as amended)

    10.22      Shareholder's Agreement dated as of June 19, 2001, between The Phoenix Companies, Inc. and State
               Farm Mutual Insurance Company (incorporated herein by reference to Exhibit 10.56 to The Phoenix
               Companies, Inc. Registration Statement on Form S-1 (Registration No. 333-73896), filed on
               November 21, 2001, as amended)

    10.23      Acquisition Agreement, dated as of November 12, 2001, by and among Kayne Anderson Rudnick
               Investment Management, LLC, the equity holders named therein and Phoenix Investment Partners,
               Ltd. (incorporated herein by reference to Exhibit 10.57 to The Phoenix Companies, Inc.
               Registration Statement on Form S-1 (Registration No. 333-73896), filed on November 21, 2001, as
               amended)

    10.24      Subordination Agreement dated as of December 27, 2001 between The Phoenix Companies, Inc. and
               Phoenix Investment Partners, Ltd. (incorporated herein by reference to Exhibit 10.64 to The
               Phoenix Companies, Inc. Annual Report on Form 10-K filed March 27, 2002)

    10.25      Subordination Agreement dated as of January 29, 2002 between The Phoenix Companies, Inc. and
               Phoenix Investment Partners, Ltd. (incorporated herein by reference to Exhibit 10.65 to The
               Phoenix Companies, Inc. Annual Report on Form 10-K filed March 27, 2002)

    10.26      Credit Agreement dated as of November 22, 2004 between The Phoenix Companies, Inc., Phoenix Life
               Insurance Company, Phoenix Investment Partners, Ltd. and various financial institutions*

    10.27      Executive Employment Agreement dated as of January 1, 2003, between The Phoenix Companies, Inc.
               and Dona D. Young (incorporated herein by reference to Exhibit 99.1 to The Phoenix Companies,
               Inc. current report on Form 8-K dated January 1, 2003)

    10.28      Employment Continuation Agreement dated January 1, 2003, between The Phoenix Companies, Inc. and
               Dona D. Young (incorporated herein by reference to Exhibit 99.2 to The Phoenix Companies, Inc.
               current report on Form 8-K dated January 1, 2003)

                                                      E-2


    10.29      Restricted Stock Units Agreement dated as of January 25, 2003, between The Phoenix Companies,
               Inc. and Dona D. Young (incorporated herein by reference to Exhibit 10.1 to The Phoenix
               Companies, Inc. Quarterly Report on Form 10-Q filed August 14, 2003)

    10.30      Change in Control Agreement dated as of January 1, 2003, between The Phoenix Companies, Inc. and
               Michael E. Haylon (incorporated herein by reference to Exhibit 10.56 to The Phoenix Companies,
               Inc. Annual Report on Form 10-K filed March 21, 2003)

    10.31      Individual Long-Term Incentive Plan between The Phoenix Companies, Inc. and Michael E. Haylon*

    10.32      Offer Letter dated April 14, 2003 by The Phoenix Companies, Inc. to Daniel T. Geraci
               (incorporated herein by reference to Exhibit 10.2 to The Phoenix Companies, Inc. Quarterly
               Report on Form 10-Q filed August 14, 2003)

    10.33      Change in Control Agreement dated as of May 12, 2003, between The Phoenix Companies, Inc. and
               Daniel T. Geraci (incorporated herein by reference to Exhibit 10.3 to The Phoenix Companies,
               Inc. Quarterly Report on Form 10-Q filed August 14, 2003)

    10.34      Restricted Stock Units Agreement dated as of May 12, 2003 between The Phoenix Companies, Inc.
               and Daniel T. Geraci (incorporated herein by reference to Exhibit 10.4 to The Phoenix Companies,
               Inc. Quarterly Report on Form 10-Q filed August 14, 2003)

    10.35      Change in Control Agreement dated as of January 1, 2003 between The Phoenix Companies, Inc. and
               John F. Sharry*

    10.36      Change in Control Agreement dated as of January 1, 2003 between The Phoenix Companies, Inc. and
               James Wehr*

    10.37      Technology Services Agreement effective as of July 29, 2004 by and among Phoenix Life Insurance
               Company, Electronic Data Systems Corporation and EDS Information Services, L.L.C. (incorporated
               herein by reference to Exhibit 10.49 to The Phoenix Companies, Inc. Quarterly Report on Form
               10-Q dated August 9, 2004)

    10.38      Fiscal Agency Agreement dated as of December 15, 2004 between Phoenix Life Insurance Company and
               The Bank of New York*

       12      Ratio of Earnings to Fixed Charges*

       23      Consent of PricewaterhouseCoopers LLP*

     31.1      Certification of Dona D. Young, Chief Executive Officer, pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002*

     31.2      Certification of Michael E. Haylon, Chief Financial Officer, pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002*

       32      Certification by Dona D. Young, Chief Executive Officer and Michael E. Haylon, Chief Financial
               Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

- ------------------------

          *      Filed herewith

        (+)      Portions subject to confidential treatment request

We will furnish any exhibit upon the payment of a reasonable fee, which fee shall be limited to our reasonable
expenses in furnishing such exhibit.

                                                      E-3

EX-99.3.2

                                                                                                   EXHIBIT 3.2

===============================================================================================================




                                                     BYLAWS

                                                       OF

                                           THE PHOENIX COMPANIES, INC.










                                        As Adopted on November 13, 2000
                                         and As Amended on June 5, 2003








===============================================================================================================




                                                     BYLAWS
                                                       OF
                                           THE PHOENIX COMPANIES, INC.




                                           ARTICLE I - STOCKHOLDERS

Section 1.01   Annual Meeting.............................................................................1
Section 1.02   Special Meetings...........................................................................1
Section 1.03   Notice of Meetings; Waiver.................................................................1
Section 1.04   Quorum.....................................................................................2
Section 1.05   Voting.....................................................................................2
Section 1.06   Voting by Ballot...........................................................................3
Section 1.07   Adjournment................................................................................3
Section 1.08   Proxies....................................................................................3
Section 1.09   Organization; Procedure....................................................................4
Section 1.10   Notice of Stockholder Business and Nominations.............................................4
Section 1.11   Inspectors of Elections....................................................................6
Section 1.12   Opening and Closing of Polls...............................................................7
Section 1.13   No Stockholder Action by Written Consent...................................................7

                                        ARTICLE II - BOARD OF DIRECTORS

Section 2.01   General Powers.............................................................................8
Section 2.02   Number of Directors........................................................................8
Section 2.03   Classified Board of Directors; Election of Directors.......................................8
Section 2.04   Annual and Regular Meetings................................................................8
Section 2.05   Special Meetings; Notice...................................................................9
Section 2.06   Quorum; Voting.............................................................................9
Section 2.07   Adjournment................................................................................9
Section 2.08   Action Without a Meeting...................................................................9
Section 2.09   Regulations; Manner of Acting..............................................................9
Section 2.10   Action by Telephonic Communications.......................................................10
Section 2.11   Resignations..............................................................................10
Section 2.12   Removal of Directors......................................................................10
Section 2.13   Vacancies and Newly Created Directorships.................................................10
Section 2.14   Compensation..............................................................................10
Section 2.15   Reliance on Accounts and Reports, etc.....................................................10

                                            ARTICLE III - COMMITTEES

Section 3.01   Standing Committees.......................................................................11
Section 3.02   Designation of Members and Chairpersons of Committees.....................................11
Section 3.03   Notices of Times of Meetings of Committees and Presiding Officers.........................11
Section 3.04   Executive Committee.......................................................................12
Section 3.05   Compensation Committee....................................................................12
Section 3.06   Audit Committee...........................................................................12
Section 3.07   Other Committees..........................................................................12



                                                       i


Section 3.08   Powers....................................................................................12
Section 3.09   Proceedings...............................................................................13
Section 3.10   Quorum and Manner of Acting...............................................................13
Section 3.11   Actions by Telephone Communications.......................................................13
Section 3.12   Absent or Disqualified Members............................................................13
Section 3.13   Resignations..............................................................................13
Section 3.14   Removal...................................................................................13
Section 3.15   Vacancies.................................................................................13

                                             ARTICLE IV - OFFICERS

Section 4.01   Number....................................................................................14
Section 4.02   Election..................................................................................14
Section 4.03   Salaries..................................................................................14
Section 4.04   Removal and Resignation; Vacancies........................................................14
Section 4.05   Authority and Duties of Officers..........................................................14
Section 4.06   The Chairperson...........................................................................14
Section 4.07   The Vice Chairperson......................................................................14
Section 4.08   The Chief Executive Officer...............................................................15
Section 4.09   The President.............................................................................15
Section 4.10   The Vice Presidents.......................................................................15
Section 4.11   The Secretary.............................................................................16
Section 4.12   The Chief Financial Officer...............................................................16
Section 4.13   The Treasurer.............................................................................17
Section 4.14   Additional Officers.......................................................................17

                                           ARTICLE V - CAPITAL STOCK

Section 5.01   Certificates of Stock; Uncertified Shares.................................................18
Section 5.02   Signatures; Facsimile.....................................................................18
Section 5.03   Lost, Stolen or Destroyed Certificates....................................................18
Section 5.04   Transfer of Stock.........................................................................18
Section 5.05   Record Date...............................................................................19
Section 5.06   Registered Stockholders...................................................................19
Section 5.07   Transfer Agent and Registrar..............................................................19

                                          ARTICLE VI - INDEMNIFICATION

Section 6.01   Nature of Indemnity.......................................................................20
Section 6.02   Successful Defense........................................................................20
Section 6.03   Determination that Indemnification is Proper..............................................21
Section 6.04   Advance Payment of Expenses...............................................................21
Section 6.05   Procedure for Indemnification of Directors and Officers...................................21
Section 6.06   Survival; Preservation of Other Rights....................................................22
Section 6.07   Insurance.................................................................................22
Section 6.08   Severability..............................................................................22



                                                      ii




                                             ARTICLE VII - OFFICES

Section 7.01   Initial Registered Office.................................................................23
Section 7.02   Other Offices.............................................................................23

                                       ARTICLE VIII - GENERAL PROVISIONS
Section 8.01   Dividends.................................................................................23
Section 8.02   Execution of Instruments..................................................................23
Section 8.03   Corporate Indebtedness....................................................................23
Section 8.04   Deposits..................................................................................24
Section 8.05   Checks, Drafts, etc.......................................................................24
Section 8.06   Sale, Transfer, etc. of Securities........................................................24
Section 8.07   Voting as Stockholder.....................................................................24
Section 8.08   Fiscal Year...............................................................................24
Section 8.09   Seal......................................................................................24
Section 8.10   Books and Records; Inspection.............................................................25

                                        ARTICLE IX - AMENDMENT OF BYLAWS

Section 9.01   Amendment.................................................................................25

                                          ARTICLE X - CONSTRUCTION

Section 10.01  Construction..............................................................................25



                                                      iii


                                                     BYLAWS

                                                       OF

                                           THE PHOENIX COMPANIES, INC.



                                        As adopted on November 13, 2000

                                    ______________________________________


                                                   ARTICLE I

                                                  STOCKHOLDERS

         Section 1.01. Annual Meeting. The annual meeting of the stockholders of the Corporation for the
election of Directors and for the transaction of such other business as properly may come before such meeting
shall be held at such place, either within or without the State of Delaware, or, within the sole discretion of
the Board of Directors, by remote electronic communication technologies and at such date and at such time, as
may be fixed from time to time by resolution of the Board of Directors and set forth in the notice or waiver of
notice of the meeting.

         Section 1.02. Special Meetings. Special meetings of the stockholders may be called at any time by the
Chief Executive Officer (or, in the event of his or her absence or disability, by the President or, in the
event of his or her absence or disability, the Executive or Senior Vice Presidents in order designated by the
Board of Directors, but if not so designated, then in the order of their rank), or by the Board of Directors.
Such special meetings of the stockholders shall be held at such places, within or without the State of
Delaware, or, within the sole discretion of the Board of Directors, by remote electronic communication
technologies, as shall be specified in the respective notices or waivers of notice thereof. Any power of
stockholders of the Corporation to call a special meeting is specifically denied.

         Section 1.03.  Notice of Meetings; Waiver.

                 (a) The Secretary or any Assistant Secretary shall cause written notice of the place, if any,
         date and hour of each meeting of the stockholders, and, in the case of a special meeting, the purpose
         or purposes for which such meeting is called, and the means of remote communications, if any, by which
         stockholders and proxy holders may be deemed to be present in person and vote at such meeting, to be
         given personally, by mail or by electronic transmission, not fewer than ten (10) nor more than sixty
         (60) days prior to the meeting, to each stockholder of record entitled to vote at such meeting. If
         such notice is mailed, it shall be deemed to have been given to a stockholder when deposited in the
         United States mail, postage prepaid, directed to the stockholder at his or her address as it appears
         on the record of stockholders of the Corporation, or, if a stockholder shall have filed with the
         Secretary of the Corporation a written request that notices to


         such stockholder be mailed to some other address, then directed to such stockholder at such other
         address. Such further notice shall be given as may be required by law.

                 (b) A written waiver of any notice of any annual or special meeting signed by the person
         entitled thereto, or a waiver by electronic transmission by the person entitled to notice, shall be
         deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any regular
         or special meeting of the stockholders need be specified in a written waiver of notice. Attendance of
         a stockholder at a meeting of stockholders shall constitute a waiver of notice of such meeting, except
         when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the
         meeting, to the transaction of any business on the ground that the meeting is not lawfully called or
         convened.

                 (c) For notice given by electronic transmission to a stockholder to be effective, such
         stockholder must consent to the Corporation's giving notice by that particular form of electronic
         transmission. A stockholder may revoke consent to receive notice by electronic transmission by written
         notice to the Corporation. A stockholder's consent to notice by electronic transmission is
         automatically revoked if the Corporation is unable to deliver two consecutive electronic transmission
         notices and such inability becomes known to the Secretary, Assistant Secretary, the transfer agent or
         other person responsible for giving notice.

                 (d) Notices are deemed given (i) if by facsimile, when faxed to a number where the stockholder
         has consented to receive notice; (ii) if by electronic mail, when mailed electronically to an
         electronic mail address at which the stockholder has consented to receive such notice; (iii) if by
         posting on an electronic network (such as a website or chatroom) together with a separate notice to
         the stockholder of such specific posting, upon the later to occur of (A) such posting or (B) the
         giving of the separate notice of such posting; or (iv) if by any other form of electronic
         communication, when directed to the stockholders in the manner consented to by the stockholder.

                 (e) If a stockholder meeting is to be held via electronic communications and stockholders will
         take action at such meeting, the notice of such meeting must: (i) specify the means of remote
         communications, if any, by which stockholders and proxy holders may be deemed to be present and vote
         at such meeting; and (ii) provide the information required to access the stockholder list. A waiver of
         notice may be given by electronic transmission.

         Section 1.04. Quorum. Except as otherwise required by law or by the Certificate of Incorporation, the
presence in person or by proxy of the holders of record of one-third of the shares entitled to vote at a
meeting of stockholders shall constitute a quorum for the transaction of business as such meeting.

         Section 1.05. Voting. If, pursuant to Section 5.05 of these Bylaws, a record date has been
fixed, every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one
(1) vote for each share outstanding in his or her name on the books of the


                                                       2

Corporation at the close of business on such record date. If no record date has been fixed, then every holder
of record of shares entitled to vote at a meeting of stockholders shall be entitled to one (1) vote for each
share of stock standing in his or her name on the books of the Corporation at the close of business on the day
next preceding the day on which notice of the meeting is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. Except as otherwise required by law,
the Certificate of Incorporation or these Bylaws, the vote of a majority of the shares represented in person or
by proxy at any meeting at which a quorum is present shall be sufficient for the transaction of any business at
such meeting.

         Section 1.06. Voting by Ballot. No vote of the stockholders on an election of Directors need be taken
by written ballot or by electronic transmission unless otherwise required by law. Any vote not required to be
taken by ballot or by electronic transmission may be conducted in any manner approved by the Board of Directors
prior to the meeting at which such vote is taken.

         Section 1.07. Adjournment. If a quorum is not present at any meeting of the stockholders, the
stockholders present in person or by proxy shall have the power to adjourn any such meeting from time to time
until a quorum is present. Notice of any adjourned meeting of the stockholders of the Corporation need not be
given if the place, if any, date and hour thereof are announced at the meeting at which the adjournment is
taken, provided, however, that if the adjournment is for more than thirty (30) days, or if after the
adjournment a new record date for the adjourned meeting is fixed pursuant to Section 5.05 of these Bylaws, a
notice of the adjourned meeting, conforming to the requirements of Section 1.03 hereof, shall be given to each
stockholder of record entitled to vote at such meeting. At any adjourned meeting at which a quorum is present,
any business may be transacted that might have been transacted on the original date of the meeting.

         Section 1.08. Proxies. Any stockholder entitled to vote at any meeting of the stockholders may
authorize another person or persons to vote at any such meeting and express such consent or dissent for him or
her by proxy. A stockholder may authorize a valid proxy by executing a written instrument signed by such
stockholder, or by causing his or her signature to be affixed to such writing by any reasonable means
including, but not limited to, by facsimile signature, or by transmitting or authorizing the transmission if a
telegram, cablegram or other means of electronic transmission to the person designated as the holder of the
proxy, a proxy solicitation firm or a like authorized agent. No such proxy shall be voted or acted upon after
the expiration of one (1) year from the date of such proxy, unless such proxy provides for a longer period.
Every proxy shall be revocable at the pleasure of the stockholder executing it, except in those cases where
applicable law provides that a proxy shall be irrevocable. A stockholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or by filing with the Secretary either an instrument
in writing revoking the proxy or another duly executed proxy bearing a later date. Proxies by telegram,
cablegram or other electronic transmission must either set forth or be submitted with information from which it
can be determined that the telegram, cablegram or other electronic transmission was authorized by the
stockholder. Any copy, facsimile telecommunication or other reliable reproduction of a writing or transmission


                                                       3


created pursuant to this section may be substituted or used in lieu of the original writing or transmission for
any and all purposes for which the original writing or transmission could be used, provided that such copy,
facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original
writing or transmission.

         Section 1.09  Organization; Procedure. At every meeting of stockholders the presiding officer shall be
the Chairperson or, in the event of his or her absence or disability, the Vice Chairperson, or in the event of
his or her absence or disability, the Chief Executive Officer or the President or in the event of their absence
or disability, the Executive or Senior Vice Presidents in order designated by the Board of Directors, but if
not so designated, then in the order of their rank. The Secretary, or in the event of his or her absence or
disability, an Assistant Secretary, if any, or if there be no Assistant Secretary, in the absence of the
Secretary, an appointee of the presiding officer shall act as Secretary of the meeting. The order of business
and all other matters of procedure at every meeting of the stockholders may be determined by such presiding
officer.

         Section 1.10.  Notice of Stockholder Business and Nominations.

                 (a)    Annual Meetings of Stockholders.

                        (i) Nomination of persons for election to the Board of Directors of the Corporation and
                 the proposal of business to be considered by the stockholders may be made at an annual meeting
                 of stockholders (A) by or at the direction of the Board of Directors or the Chairperson of the
                 Board of Directors or, in the event of his or her absence or disability, the Vice Chairperson,
                 or, in the event of his or her absence or disability, the Chief Executive Officer or the
                 President, or, in the event of their absence or disability, the Executive or Senior Vice
                 Presidents in the order designated by the Board of Directors, but if not so designated, then
                 in order of their rank, or (B) by any stockholder of the Corporation who is entitled to vote
                 at the meeting, who complies with the notice procedures set forth in clauses (ii) and (iii) of
                 this paragraph and who was a stockholder of record at the time such notice is delivered to the
                 Secretary of the Corporation.

                        (ii) For nominations or other business to be properly brought before an annual meeting
                 by a stockholder, pursuant to clause (B) of paragraph (a)(i) of this Section 1.10, the
                 stockholder must have given timely notice thereof in writing or by electronic transmission to
                 the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to
                 the Secretary at the principal executive offices of the Corporation not fewer than ninety (90)
                 days nor more than one hundred twenty (120) days prior to the first anniversary of the
                 preceding year's annual meeting and in any event at least forty-five (45) days prior to the
                 first anniversary of the date on which the registrant first mailed its proxy materials for the
                 prior year's annual meeting of shareholders; provided that if the date of the annual meeting
                 is advanced by more than thirty (30) days or delayed by more than seventy (70) days from such
                 anniversary date, notice by the stockholder to be timely must be so delivered not earlier than
                 one hundred twenty (120) days prior to such annual meeting and not later than the close of
                 business on the later of the ninetieth day prior to such annual meeting or the tenth day
                 following the date on


                                                       4


                 which public announcement of the date of such meeting is first made. In no event shall the
                 adjournment of an annual meeting commence a new time period for the giving of a stockholder's
                 notice as described above. Such stockholder's notice shall set forth (A) as to each person
                 whom the stockholder proposes to nominate for election or reelection as a Director, all
                 information relating to such person that is required to be disclosed in solicitations of
                 proxies for election of Directors, or is otherwise required, in each case pursuant to
                 Regulation 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
                 Rule 14a-11 thereunder, or any successor provisions, including such person's written consent
                 to being named in the proxy statement as a nominee and to serving as a Director if elected;
                 (B) as to any other business that the stockholder proposes to bring before the meeting, a
                 brief description of the business desired to be brought before the meeting, the reasons for
                 conducting such business at the meeting and any material interest in such business of such
                 stockholder and of any beneficial owner on whose behalf the proposal is made; and (C) as to
                 the stockholder giving the notice and any beneficial owner on whose behalf the nomination or
                 proposal is made (1) the name and address of such stockholder, as they appear on the
                 Corporation's books, and of such beneficial owner and (2) the class and number of shares of
                 the Corporation which are owned beneficially and of record by such stockholder and such
                 beneficial owner.

                        (iii) Notwithstanding anything in the second sentence of paragraph (a)(ii) of this
                 Section 1.10 to the contrary, in the event that the number of Directors to be elected to the
                 Board of Directors of the Corporation is increased and there is no public announcement naming
                 all of the nominees for Director or specifying the size of the increased Board of Directors
                 made by the Corporation at least one hundred (100) days prior to the first anniversary of the
                 preceding year's annual meeting, a stockholder's notice under this paragraph shall also be
                 considered timely, but only with respect to nominees for any new positions created by such
                 increase, if it shall be delivered to the Secretary at the principal executive offices of the
                 Corporation not later than the close of business on the tenth day following the day on which
                 such public announcement is first made by the Corporation.

                 (b) Special Meetings of Stockholders. Only such business as shall have been brought before the
         special meeting of the stockholders pursuant to the Corporation's notice of meeting pursuant to
         Section 1.03 of these Bylaws shall be conducted at such meeting. Nominations of persons for election
         to the Board of Directors may be made at a special meeting of stockholders at which Directors are to
         be elected pursuant to the Corporation's notice of meeting (1) by or at the direction of the Board of
         Directors or (2) by any stockholder of the Corporation who is entitled to vote at the meeting, who
         complies with the notice procedures set forth in this Section 1.10 and who is a stockholder of record
         at the time such notice is delivered to the Secretary of the Corporation. Nominations by stockholders
         of persons for election to the Board of Directors may be made at such special meeting of stockholders
         if the stockholder's notice as required by paragraph (a)(ii) of this Section 1.10 shall be delivered
         to the Secretary at


                                                       5


         the principal executive offices of the Corporation not earlier than the one hundred twentieth day
         prior to such special meeting or the tenth day following the date on which public announcement is
         first made of the date of the special meeting and of the nominees proposed by the Board of Directors
         to be elected as such meeting. In no event shall the adjournment of a special meeting commence a new
         time period for the giving of a stockholder's notice as described above.

                 (c)    General.

                        (i) Only persons who are nominated in accordance with the procedures set forth in this
                 Section 1.10 shall be eligible to serve as Directors and only such business shall be conducted
                 at a meeting of stockholders as shall have been brought before the meeting in accordance with
                 the procedures set forth in this Section 1.10. Except as otherwise provided by law, the
                 Certificate of Incorporation or these Bylaws, the Chairperson of the meeting shall have the
                 power and duty to determine whether a nomination or any business proposed to be brought before
                 the meeting was made in accordance with the procedures set forth in this Section 1.10 and, if
                 any proposed nomination or business is not in compliance with this Section 1.10, to declare
                 that such defective proposal or nomination shall be disregarded.

                        (ii) For purposes of this Section 1.10, "public announcement" shall mean disclosure in
                 a press release reported by the Dow Jones News Service, Associated Press or comparable
                 national news service or in a document publicly filed by the Corporation with the Securities
                 and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

                        (iii) Notwithstanding the foregoing provisions of this Section 1.10, a stockholder
                 shall also comply with all applicable requirements of the Exchange Act and the rules and
                 regulations thereunder with respect to the matters set forth in this Section 1.10. Nothing in
                 this Section 1.10 shall be deemed to affect any rights (A) of stockholders to request
                 inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the
                 Exchange Act, or (B) of the holders of any series of Preferred Stock, if any, to elect
                 Directors if so provided under any applicable Preferred Stock Certificate of Designation (as
                 defined in the Certificate of Incorporation).

         Section 1.11.  Inspectors of Elections. Preceding any meeting of the stockholders, the Board of
Directors shall appoint one (1) or more persons to act as Inspectors of Elections, and may designate one (1) or
more alternate inspectors. In the event no inspector or alternate is able to act, the person presiding at the
meeting shall appoint one (1) or more inspectors to act at the meeting. Each inspector, before entering upon
the discharge of the duties of an inspector, shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his or her ability. The inspector shall:

                 (a)    ascertain the number of shares outstanding and the voting power of each;


                                                       6


                 (b)    determine the shares represented at a meeting and the validity of proxies and ballots;

                 (c)    specify the information relied upon to determine the validity of electronic
         transmissions in accordance with Section 1.08 hereof;

                 (d)    count all votes and ballots;

                 (e)    determine and retain for a reasonable period a record of the disposition of any
         challenges made to any determination by the inspectors;

                 (f)    certify his or her determination of the number of shares represented at the meeting,
         and his or her count of all votes and ballots;

                 (g)    appoint or retain, if he or she so desires, other persons or entities to assist in the
         performance of the duties of inspector; and

                 (h)    when determining the shares represented and the validity of proxies and ballots, be
         limited to an examination of the proxies, any envelopes submitted with those proxies, any information
         provided in accordance with Section 1.08 of these Bylaws, ballots and the regular books and records of
         the Corporation. The inspector may consider other reliable information for the limited purpose of
         reconciling proxies and ballots submitted by or on behalf of banks, brokers or their nominees or a
         similar person which represent more votes than the holder of a proxy is authorized by the record owner
         to cast or more votes than the stockholder holds of record. If the inspector considers other reliable
         information as outlined in this section, the inspector, at the time of his or her certification
         pursuant to paragraph (f) of this section, shall specify the precise information considered, the
         person or persons from whom the information was obtained, when this information was obtained, the
         means by which the information was obtained, and the basis for the inspector's belief that such
         information is accurate and reliable.

         Section 1.12.  Opening and Closing of Polls. The date and time for the opening and the closing of the
polls for each matter to be voted upon at a stockholder meeting shall be announced at the meeting. The
inspector shall be prohibited from accepting any ballots, proxies or votes or any revocations thereof or
changes thereto after the closing of the polls, unless the Court of Chancery upon application by a stockholder
shall determine otherwise.

         Section 1.13.  No Stockholder Action by Written Consent. Effective as of the time the Common Stock
shall be registered pursuant to the provisions of the Exchange Act, any action required or permitted to be
taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of the
stockholders of the Corporation, and the ability of the stockholders to consent in writing to the taking of any
action is specifically denied.


                                                       7




                                                   ARTICLE II

                                               BOARD OF DIRECTORS

         Section 2.01.  General Powers. Except as may otherwise be provided by law, the Certificate of
Incorporation or these Bylaws, the property, affairs and business of the Corporation shall be managed by or
under the direction of the Board of Directors and the Board of Directors may exercise all the powers of the
Corporation.

         Section 2.02.  Number of Directors. Subject to the rights of the holders of any class or series of
Preferred Stock, if any, the number of Directors shall be fixed from time to time exclusively pursuant to a
resolution adopted by a majority of the entire Board of Directors; provided, however, that the Board of
Directors shall at no time consist of fewer than three (3) Directors.

         Section 2.03.  Classified Board of Directors; Election of Directors. The Directors of the Corporation,
subject to the rights of the holders of shares of any class or series of Preferred Stock, shall be classified
with respect to the time which they severally hold office, into three (3) classes, as nearly equal in number as
possible, one class ("Class I") whose initial term expires at the 2002 annual meeting of stockholders, another
class ("Class II") whose initial term expires at the 2003 annual meeting of stockholders, and another class
("Class III") whose initial term expires at the 2004 annual meeting of stockholders, with each class to hold
office until its successors are elected and qualified. Except as otherwise provided in Sections 2.12 and 2.13
of these Bylaws, at each annual meeting of stockholders of the Corporation, and subject to the rights of
holders of shares of any class or series of Preferred Stock, the successors of the class of Directors whose
term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of
stockholders held in the third year following the year of their election.

         Section 2.04.  Annual and Regular Meetings. The annual meeting of the Board of Directors for the
purpose of electing officers and for the transaction of such other business as may come before the meeting
shall be held as soon as reasonably practicable following adjournment of the annual meeting of the stockholders
at the place of such annual meeting of the stockholders. Notice of such annual meeting of the Board of
Directors need not be given. The Board of Directors from time to time may by resolution provide for the holding
of regular meetings and fix the place (which may be within or without the State of Delaware) and the date and
hour of such meetings. Notice of regular meetings need not be given, provided, however, that if the Board of
Directors shall fix or change the time or place of any regular meeting, notice of such action shall be mailed
promptly, or sent by telephone, including a voice messaging system or other system or technology designated to
record and communicate messages, telegraph, facsimile, electronic mail or other electronic means, to each
Director who shall not have been present at the meeting at which such action was taken, addressed to him or her
at his or her usual place of business or to such other addresses as any Director may request by notice to the
Secretary, or shall be delivered to him or her personally. Notice of such action need not be given to any
Director who attends the first regular meeting after such action is taken without protesting the lack of notice
to him or her, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver
of notice, whether before or after such meeting.


                                                       8


         Section 2.05.  Special Meetings; Notice. Special meetings of the Board of Directors shall be held
whenever called by the Chairperson or, in the event of his or her absence or disability, by the Vice
Chairperson or, in the event of his or her absence or disability, by the Chief Executive Officer or, in the
event of his or her absence or disability, by the President or, in the event of his or her absence, by the
Executive or Senior Vice Presidents in the order designated by the Board of Directors, but if not so
designated, then in order of their rank, at such place (within or without the State of Delaware), date and hour
as may be specified in the respective notices or waivers of notice of such meetings. Special meetings of the
Board of Directors also may be held whenever called by the Chairperson of the Executive Committee of the Board
of Directors or by any three (3) Directors. Special meetings of the Board of Directors may be called on
twenty-four (24) hours' notice, if notice is given to each Director personally or by telephone, including a
voice messaging system, or other system or technology designed to record and communicate messages, telegraph,
facsimile, electronic mail or other electronic means, or on five (5) days' notice, if notice is mailed to each
Director, addressed to him or her at his or her usual place of business or to such other address as any
Director may request by notice to the Secretary. Notice of any special meeting need not be given to any
Director who attends such meeting without protesting the lack of notice to him or her, prior to or at the
commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after
such meeting, and any business may be transacted thereat.

         Section 2.06.  Quorum; Voting. At all meetings of the Board of Directors, the presence of at least a
majority of the total authorized number of Directors shall constitute a quorum for the transaction of business.
Except as otherwise required by law, the vote of at least a majority of the Directors present at any meeting at
which a quorum is present shall be the act of the Board of Directors.

         Section 2.07.  Adjournment. A majority of the Directors present, whether or not a quorum is present,
may adjourn any meeting of the Board of Directors to another time or place. No notice need be given of any
adjourned meeting unless the time and place of the adjourned meeting are not announced at the time of
adjournment, in which case notice conforming to the requirements of Section 2.05 of these Bylaws shall be given
to each Director.

         Section 2.08.  Action Without a Meeting. Any action required or permitted to be taken at any meeting of
the Board of Directors may be taken without a meeting if all members of the Board of Directors consent thereto
in writing or by electronic transmission, and such writing or writings or electronic transmissions are filed
with the minutes of proceedings of the Board of Directors. Such filing shall be in paper form if the minutes
are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

         Section 2.09.  Regulations; Manner of Acting. To the extent consistent with applicable law, the
Certificate of Incorporation and these Bylaws, the Board of Directors may adopt such rules and regulations for
the conduct of meetings of the Board of Directors and for the management of the property, affairs and business
of the Corporation as the Board of Directors may deem appropriate. The Directors shall act only as a Board of
Directors and the individual


                                                       9


Directors shall have no power in their individual capacities unless expressly authorized by the Board of
Directors.

         Section 2.10.  Action by Telephonic Communications. Members of the Board of Directors may participate
in a meeting of the Board of Directors by means of conference telephone or other communications equipment by
means of which all persons participating in the meeting can hear each other, and participation in a meeting
pursuant to this provision shall constitute presence in person at such meeting.

         Section 2.11.  Resignations. Any Director may resign at any time by submitting an electronic
transmission or by delivering a written notice of resignation, signed by such Director, to the Chairperson, the
Vice Chairperson, the Chief Executive Officer, the President or the Secretary. Unless otherwise specified
therein, such resignation shall take effect upon delivery.

         Section 2.12.  Removal of Directors. Subject to the rights of the holders of any class or series of
Preferred Stock, if any, to elect additional Directors under specified circumstances, any Director may be
removed at any time, but only for cause, upon the affirmative vote of the holders of a majority of the combined
voting power of the then outstanding stock of the Corporation entitled to vote generally in the election of
Directors. Any vacancy in the Board of Directors caused by any such removal may be filled at such meeting by
the stockholders entitled to vote for the election of the Director so removed. If such stockholders do not fill
any vacancy at such meeting, such vacancy may be filled in the manner provided in Section 2.13 of these Bylaws.

         Section 2.13.  Vacancies and Newly Created Directorships. Subject to the rights of the holders of any
class or series of Preferred Stock, if any, to elect additional Directors under specified circumstances, and
except as provided in Section 2.12, if any vacancies shall occur in the Board of Directors, by reason of death,
resignation, removal or otherwise, or if the authorized number of Directors shall be increased, the Directors
then in office shall continue to act, and such vacancies and newly created directorships may be filled by a
majority of the Directors then in office, although less than a quorum. Any Director filling a vacancy shall be
of the same class as that of the Director whose death, resignation, removal or other event caused the vacancy,
and any Director filling a newly created directorship shall be of the class specified by the Board of Directors
at the time the newly created directorships were created. A Director elected to fill a vacancy or a newly
created directorship shall hold office until his or her successor has been elected and qualified or until his
or her earlier death, resignation or removal.

         Section 2.14.  Compensation. The amount, if any, which each Director shall be entitled to receive as
compensation for such Director's services as such shall be fixed from time to time by resolution of the Board
of Directors.

         Section 2.15.  Reliance on Accounts and Reports, etc. A Director or a member of any committee
designated by the Board of Directors shall, in the performance of such Director's or member's duties, be fully
protected in relying in good faith upon the records of the Corporation and upon information, opinions, reports
or statements presented to the Corporation by any of the Corporation's officers or employees, or committees
designated by the Board of Directors, or by


                                                      10


any other person as to the matters the Director or the member reasonably believes are within such other
person's professional or expert competence and who has been selected with reasonable care by or on behalf of
the Corporation.

                                                  ARTICLE III

                                                   COMMITTEES

         Section 3.01.  Standing Committees. The Board of Directors shall have the following standing
committees, each consisting of not fewer than three (3) Directors, as shall be determined by the Board of
Directors:

                  Executive Committee
                  Compensation Committee
                  Audit Committee

         Section 3.02.  Designation of Members and Chairpersons of Committees.. At the annual meeting each
year, the Board of Directors shall by resolution designate from among the Directors the members of the standing
committees and the members of each committee established pursuant to Section 3.07 which will continue in
existence and from among the members of each such committee a chairperson thereof, which members and
chairperson shall each serve, at the pleasure of the Board of Directors, so long as they shall continue in
office as Directors, until the next annual meeting of the Board of Directors and thereafter until the
appointment of their respective successors. The Board of Directors may by similar resolution designate one (1)
or more Directors as alternate members of such committees, who may replace any absent member or members at any
meeting of such committees. No officer or employee may be designated as a member or alternate member of the
Audit Committee or the Compensation Committee. Vacancies among members or chairpersons of any committee may be
filled in the same manner as original designations at any regular or special meeting of the Board of Directors,
and the Chief Executive Officer may designate from among the remaining members of any committee whose
chairperson is vacant a chairperson who shall serve until a successor is designated by the Board of Directors.

          Section 3.03. Notices of Times of Meetings of Committees and Presiding Officers. Meetings of each
standing committee shall be held upon call of the Chief Executive Officer or upon call of the chairperson of
such committee or of two (2) members of such committee. Meetings of such committee may also be held at such
other times as it may determine. Meetings of a committee shall be held at such places and upon such notice as
it shall determine or as shall be specified in the calls of such meetings. Any such chairperson, if present, or
such member or members of each committee as may be designated by the Chief Executive Officer shall preside at
meetings thereof of, in the event of an absence or disability of any thereof or failing such designation, the
committee shall select from among its members present a presiding officer. Meetings of a committee may be
attended by Directors who are not members of such committee unless the Chief Executive Officer or the
chairperson of such committee requests otherwise.


                                                      11


         Section 3.04.  Executive Committee. The Executive Committee may, to the extent permitted by law,
exercise all powers of the Board of Directors during intervals between meetings of the Board of Directors and
shall provide advice with respect to the Company's operations.

         Section 3.05.  Compensation Committee. The Compensation Committee shall exercise general supervision
over compensation, personnel administration and other activities carried on by the Corporation and its
subsidiaries in the interest of the health, welfare and safety of the employees of the Corporation, if any, and
those of its subsidiaries. The Compensation Committee shall nominate for election by the Board of Directors all
officers as such Committee may determine. In addition, in the absence of any Nominating Committee or of any
other committee exercising such function, the Compensation Committee shall make recommendations to the Board of
Directors with respect to filling of vacancies on the Board of Directors.

         Section 3.06.  Audit Committee. The Audit Committee shall exercise general supervision of accounting
and auditing controls over cash, securities, receipts, disbursements and other financial transactions; shall
make such examinations thereof as it may deem necessary through certified public accountants or otherwise;
shall review the financial condition of the Corporation and the scope and results of the independent audit and
any internal audits; shall recommend the selection of independent certified public accountants; and, in respect
to such matters, may require such reports from the officer in charge of Auditing for the Corporation as it may
deem necessary or desirable. The Audit Committee shall also exercise general supervision of the Corporation's
policies on ethical business conduct and compliance therewith.

         Section 3.07.  Other Committees. The Board of Directors by resolution may designate one (1) or more
other committees, and the powers and purposes thereof, each such committee to consist of such number of
Directors as from time to time may be fixed by the Board of Directors. The Board of Directors, at the time of
such designation or at any time thereafter before the next annual meeting, shall by resolution designate from
among the Directors the members and alternate members of such committees, as well as the chairperson thereof.
Any such committee may be abolished or re-designated from time to time by the Board of Directors. Each member
(and each alternate member) of any such committee (whether designated at an annual meeting of the Board of
Directors or to fill a vacancy or otherwise) shall hold office until such committee is abolished or if earlier,
until his or her successor shall have been designated or until he or she shall cease to be a Director, or until
his or her earlier death, resignation or removal.

         Section 3.08.  Powers. Each committee, except as otherwise provided in this section, shall have and
may exercise such powers of the Board of Directors as may be provided by resolution or resolutions of the Board
of Directors. Neither the Executive nor any other committee shall have the power or authority:

                 (a)    to approve or adopt, or recommend to the stockholders, any action or matter expressly
         required by the Delaware General Corporation Law to be submitted to stockholders for approval; or

                 (b)    to adopt, amend or repeal the Bylaws of the Corporation.


                                                      12


         Section 3.09. Proceedings. Each such committee may fix its own rules of procedure and may meet at such
place (within or without the State of Delaware), at such time and upon such notice, if any, as it shall
determine from time to time. Each such committee shall keep minutes of its proceedings and shall report such
proceedings to the Board of Directors at the meeting of the Board of Directors next following any such
proceedings.

         Section 3.10.  Quorum and Manner of Acting. Except as may be otherwise provided in the resolution
creating such committee, at all meetings of any committee, the presence of members (or alternate members)
constituting a majority of the total authorized membership of such committee shall constitute a quorum for the
transaction of business. The act of the majority of the members present at any meeting at which a quorum is
present shall be the act of such committee. Any action required or permitted to be taken at any meeting of any
such committee may be taken without a meeting, if all members of such committee shall consent to such action in
writing or by electronic transmission and such writing or writings or electronic transmission or transmissions
are filed with the minutes of the proceedings of the committee. Such filing shall be in paper form if the
minutes are in paper form and shall be in electronic form if the minutes are maintained in electronic form. The
members of any such committee shall act only as a committee, and the individual members of such committee shall
no power in their individual capacities unless expressly authorized by the Board of Directors.

         Section 3.11.  Action by Telephone Communications. Unless otherwise provided by the Board of Directors,
members of any committee may participate in a meeting of such committee by means of conference telephone or
other communications equipment by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting.

         Section 3.12.  Absent or Disqualified Members. In the absence or disqualification of a member of any
committee, if no alternate member is present to act in his or her stead, the member or members thereof present
at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such
absent or disqualified member.

         Section 3.13.  Resignations . Any member (and any alternate member) of any committee may resign at any
time by delivering a written notice of resignation, signed by such member, to the Chairperson, the Vice
Chairperson, the Chief Executive Officer, the President or the Secretary. Unless otherwise specified therein,
such resignation shall take effect upon delivery.

         Section 3.14.  Removal. Any member (and any alternate member) of any committee may be removed at any
time, either for or without cause, by resolution adopted by a majority of the whole Board of Directors.

         Section 3.15.  Vacancies. If any vacancy shall occur in any committee by reason of disqualification,
death, resignation, removal or otherwise, the remaining members (and any alternate members) shall continue to
act, and any such vacancy may be filled by the Board of Directors.


                                                      13



                                                   ARTICLE IV

                                                    OFFICERS

         Section 4.01. Numbers. The officers of the Corporation shall be chosen by the Board of Directors and
shall be a Chairperson of the Board of Directors, a Chief Executive Officer, a President, one or more Vice
Presidents, a Chief Financial Officer, a Secretary and a Treasurer. The Board of Directors also may elect a
Vice Chairperson, one or more Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers in such
numbers as the Board of Directors may from time to time determine. Any number of offices may be held by the
same person. No officer need be a Director of the Corporation.

         Section 4.02. Election. Unless otherwise determined by the Board of Directors, the officers of the
Corporation shall be elected by the Board of Directors at the annual meeting of the Board of Directors, and
shall be elected to hold office until the next succeeding annual meeting of the Board of Directors. Officers
may be elected and qualified at any regular or special meeting of the Board of Directors. Each officer shall
hold office until his or her successor has been elected and qualified, or until his or her earlier death,
resignation or removal.

         Section 4.03. Salaries. The salaries, if any, of all officers of the Corporation shall be fixed by, or
in accordance with procedures established by, the Board of Directors.

         Section 4.04. Removal and Resignation; Vacancies. Any officer may be removed for or without cause at
any time by the Board of Directors. Any officer may resign at any time by delivering a written notice of
resignation, signed by such officer, to the Chairperson, the Chief Executive Officer, the President, or the
Secretary, or, if permitted by law, by submitting an electronic transmission. Unless otherwise specified
therein, such resignation shall take effect upon delivery. Any vacancy occurring in any office of the
Corporation by the death, resignation, removal or otherwise, shall be filled by the Board of Directors or, in
its discretion, may be left vacant.

         Section 4.05. Authority and Duties of Officers. The officers of the Corporation shall have such
authority and shall exercise such powers and perform such duties as may be specified in these Bylaws, except
that in any event each officer shall exercise such powers and perform such duties as may be required by law.

         Section 4.06. The Chairperson. The Directors shall elect from among the members of the Board of
Directors a Chairperson of the Board of Directors. The Chairperson shall have such duties and powers as set
forth in these Bylaws or as shall otherwise be conferred upon him or her from time to time by the Board of
Directors. The Chairperson shall preside over all meetings of the stockholders and of the Board of Directors.

         Section 4.07. The Vice Chairperson. The Directors may, but need not, elect from among the members of
the Board of Directors a Vice Chairperson of the Board of Directors. The Vice


                                                      14



Chairperson shall have such duties and powers as set forth in these Bylaws or as shall otherwise be conferred
upon him or her from time to time by the Board of Directors. In the absence or disability of the Chairperson,
the Vice Chairperson shall preside over all meetings of the stockholders and of the Board of Directors.

         Section 4.08. The Chief Executive Officer. The Chief Executive Officer shall have general control and
supervision of the policies and operations of the Corporation and shall see that all orders and resolutions of
the Board of Directors are carried into effect. He or she shall manage and administer the Corporation's
business and affairs and shall also perform all duties and exercise all powers usually pertaining to the office
of a chief executive officer of a corporation. Subject to such limitations as the Board of Directors may from
time to time impose, he or she shall have the authority to sign, in the name and on behalf of the Corporation,
checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the
business of the Corporation, and together with the Secretary or an Assistant Secretary, conveyances of real
estate or other documents and instruments to which the seal of the Corporation is affixed. He or she shall have
the authority to cause the employment or appointment of such employees and agents of the Corporation as the
conduct of the business of the Corporation may require, to fix their compensation, and to remove or suspend any
employee or agent appointed by the Chief Executive Officer or any subordinate officer or elected by the Board
of Directors other than the Chairperson or the Vice Chairperson. The Chief Executive Officer shall perform such
duties and have such other powers as the Board of Directors may from time to time prescribe.

         Section 4.09. The President. The President, subject to the authority of the Chief Executive Officer,
or, if the President is the Chief Executive Officer, then subject to the authority of the Chairperson, shall
have primary responsibility for, and authority with respect to, the management of the day-to-day business and
affairs of the Corporation. Subject to such limitations as the Board of Directors may from time to time impose,
the President shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders,
contracts, leases, notes, drafts and other documents and instruments. The President shall have the authority to
cause the employment or appointment of such employees and agents of the Corporation as the conduct of the
business of the Corporation may require, to fix their compensation, and to remove or suspend any employee or
agent elected or appointed by the President or any subordinate officer or elected by the Board of Directors
except the Chief Executive Officer, the Chairperson or the Vice Chairperson. The President shall perform such
other duties and have such other powers as the Board of Directors may from time to time prescribe.

         Section 4.10. The Vice Presidents. In the absence of the Chief Executive Officer and the President or
in the event of their inability to act, the Executive or Senior Vice Presidents in the order designated by the
Board of Directors, or in the absence of any designation, then in the order of their rank, shall perform the
duties of the Chief Executive Officer and the President, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the Chief Executive Officer and the President. The Vice Presidents
shall have such designations, perform such other duties and have such other powers as the Board of Directors,
the Chief Executive Officer or the President may from time to time prescribe.


                                                       15



         Section 4.11. The Secretary. The Secretary shall have the following powers and duties:

                 (a) he or she shall keep or cause to be kept a record of all the proceedings of the meetings
         of the stockholders and of the Board of Directors in books provided for that purpose;

                 (b) he or she shall cause all notices to be duly given in accordance with the provisions of
         these Bylaws and as required by law;

                 (c) whenever any committee shall be appointed pursuant to a resolution of the Board of
         Directors, he or she shall furnish a copy of such resolution to the members of such committee;

                 (d) he or she shall be the custodian of the records and of the seal of the Corporation and
         cause such seal (or a facsimile thereof) to be affixed to all certificates representing shares of the
         Corporation prior to the issuance thereof and to all instruments the execution of which on behalf of
         the Corporation under its seal shall have been duly authorized in accordance with these Bylaws, and
         when so affixed he or she may attest the same;

                 (e) he or she shall properly maintain and file all books, reports, statements, certificates
         and all other documents and records required by law, the Certificate of Incorporation or these Bylaws;

                 (f) he or she shall sign (unless the Chief Financial Officer, the Treasurer, an Assistant
         Treasurer or an Assistant Secretary shall have signed) certificates representing shares of the
         Corporation, the issuance of which shall have been authorized by the Board of Directors;

                 (g) he or she shall have the power to authorize the seal of the Corporation to be affixed to
         any or all papers that may require it; and

                 (h) he or she shall perform, in general, all duties incident to the office of secretary and
         such other duties as may be specified in these Bylaws or as may be assigned to him or her from time to
         time by the Board of Directors, the Chief Executive Officer or the President.

         Section 4.12. The Chief Financial Officer. The Chief Financial Officer of the Corporation shall have
the following powers and duties:

                 (a) he or she shall have charge and supervision over and be responsible for the moneys,
         securities, receipts and disbursements of the Corporation, and shall keep or cause to be kept full and
         accurate records of all receipts of the Corporation;

                 (b) he or she shall cause the moneys and other valuable effects of the Corporation to be
         deposited in the name and to the credit of the Corporation in such


                                                      16


         banks or trust companies or with such bankers or other depositories as shall be selected in accordance
         with Section 8.04 of these Bylaws;

                 (c) he or she shall cause the moneys of the Corporation to be disbursed by checks or drafts
         (signed as provided in Section 8.05 of these Bylaws) upon the authorized depositories of the
         Corporation and cause to be taken and preserved proper vouchers for all moneys disbursed;

                 (d) he or she shall render to the Board of Directors, the Chief Executive Officer or the
         President, whenever requested, a statement of the financial condition of the Corporation and of all
         his or her transactions as Chief Financial Officer, and render a full financial report at the annual
         meeting of the stockholders, if called upon to do so;

                 (e) he or she shall be empowered from time to time to require from all officers or agents of
         the Corporation reports or statements giving such information as he or she may desire with respect to
         any and all financial transactions of the Corporation;

                 (f) he or she may sign (unless the Treasurer, an Assistant Treasurer or the Secretary or an
         Assistant Secretary shall have signed) certificates representing stock of the Corporation, the
         issuance of which shall have been authorized by the Board of Directors; and

                 (g) he or she shall perform, in general, all duties incident to the office of treasurer and
         such other duties as may be specified in these Bylaws or as may be assigned to him or her from time to
         time by the Board of Directors or the Chief Executive Officer.

         Section 4.13. The Treasurer. The Treasurer shall perform such duties and exercise such powers as may
be assigned to him or her from time to time by the Chief Financial Officer or by the Board of Directors. In the
absence or disability of the Chief Financial Officer, the duties of the Chief Financial Officer shall be
performed and his or her powers may be exercised by the Treasurer; subject in any case to review and
superseding action by the Board of Directors, the Chief Executive Officer or the President.

         Section 4.14. Additional Officers. The Board of Directors may appoint such other officers and agents
as it may deem appropriate, and such other officers and agents shall hold their offices for such terms and
shall exercise such powers and perform such duties as may be determined from time to time by the Board of
Directors. The Board of Directors from time to time may delegate to the Chief Executive Officer, the President,
or any Vice President the power to appoint subordinate officers or agents and to prescribe their respective
rights, terms of office, authorities and duties. Any such officer may remove any such subordinate officer or
agent appointed by him or her, for or without cause.


                                                      17


                                                   ARTICLE V

                                                 CAPITAL STOCK

         Section 5.01. Certificates of Stock; Uncertified Shares. The shares of the Corporation shall be
represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that
some or all of any or all classes or series of the stock of the Corporation shall be uncertificated shares. Any
such resolution shall not apply to shares represented by a certificate until each such certificate is
surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board of Directors,
every holder of stock in the Corporation represented by certificates and upon request every holder of
uncertificated shares shall be entitled to have a certificate signed by, or in the name of, the Corporation, by
the Chief Executive Officer, the President or a Vice President, and by the Chief Financial Officer, the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, representing the number of
shares registered in certificate form. Such certificate shall be in such form as the Board of Directors may
determine, to the extent consistent with applicable law, the Certificate of Incorporation and these Bylaws.

         Section 5.02. Signatures; Facsimile. All signatures on the certificate referred to in Section 5.01 of
these Bylaws may be in facsimile, engraved or printed form, to the extent permitted by law. In case any
officer, transfer agent or registrar who has signed, or whose facsimile, engraved or imprinted signature has
been placed upon, a certificate shall have ceased to be an officer, transfer agent or registrar before such
certificate is issued, it may issued by the Corporation with the same effect as if he or she were an officer,
transfer agent or registrar at the date of issue.

         Section 5.03. Lost, Stolen or Destroyed Certificates. The Board of Directors may direct that a new
certificate be issued in place of any certificate theretofore issued by the Corporation alleged to have been
lost, stolen or destroyed, upon delivery to the Corporation of an affidavit of the owner or owners of such
certificate, setting forth such allegation. The Corporation may require the owner of such lost, stolen or
destroyed certificate, or his or her legal representative, to give the Corporation a bond sufficient to
indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction
of any such certificate or the issuance of any such new certificate.

         Section 5.04. Transfer of Stock. Under surrender to the Corporation or the transfer agent of the
Corporation of a certificate for shares, duly endorsed or accompanied by appropriate evidence of succession,
assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books. Within a reasonable time after
the transfer of uncertificated stock, the Corporation shall send to the registered owner thereof a written
notice containing the information required to be set forth or stated on certificates pursuant to the laws of
the State of Delaware. Subject to the provisions of the Certificate of Incorporation and these Bylaws, the
Board of Directors may prescribe such additional rules and regulations as it may deem appropriate relating to
the issue, transfer and registration of shares of the Corporation.



                                                      18


         Section 5.05. Record Date. In order to determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, the Board of Directors may fix, in advance, a record
date, which record date shall not precede the date on which the resolution fixing the record date is adopted by
the Board of Directors, and which shall not be more than sixty (60) nor fewer than ten (10) days before the
date of such meeting. A determination of stockholders of record entitled to notice of or to vote at a meeting
of stockholders shall apply to any adjournment of the meeting, provided, however, that the Board of Directors
may fix a new record date for the adjourned meeting.

         In order that the Corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment of any rights of the stockholders entitled to exercise any rights
in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the
Board of Directors may fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days
prior to such action. If no record date is fixed, the record date for determining stockholders for any such
purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution
relating thereto.

         Section 5.06. Registered Stockholders. Prior to due surrender of a certificate for registration of
transfer, the Corporation may treat the registered owner as the person exclusively entitled to receive
dividends and other distributions, to vote, to receive notice and otherwise to exercise all the rights and
powers of the owner of the shares represented by such certificate, and the Corporation shall not be bound to
recognize any equitable or legal claim to or interest in such shares on the part of any other person, whether
or not the Corporation shall have notice of such claim or interests. Whenever any transfer of shares shall be
made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if,
when the certificates are presented to the Corporation for transfer or uncertificated shares are requested to
be transferred, both the transferor and transferee request the Corporation to do so.

         Section 5.07. Transfer Agent and Registrar. The Board of Directors may appoint one (1) or more
transfer agents and one (1) or more registrars, and may require all certificates representing shares to bear
the signature of any such transfer agents or registrars.


                                                       19


                                                   ARTICLE VI

                                                INDEMNIFICATION

         Section 6.01. Nature of Indemnity. The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action, suit or Proceeding (a
"Proceeding"), whether civil, criminal, administrative or investigative, by reason of the fact that he or she
is or was or has agreed to become a Director or officer of the Corporation, or is or was serving or has agreed
to serve at the request of the Corporation as a Director or officer, of another corporation, partnership, joint
venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such
capacity, and may indemnify any person who was or is a party or is threatened to be made a party to such a
Proceeding by reason of the fact that he or she is or was or has agreed to become an employee or agent of the
Corporation, or is or was serving or has agreed to serve at the request of the Corporation, or is or was
serving or has agreed to serve at the request of the Corporation as an employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his
or her behalf in connection with such Proceeding and any appeal therefrom, if he or she acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation,
and, with respect to any criminal Proceeding, had no reasonable cause to believe his or her conduct was
unlawful; except that in the case of a Proceeding by or in the right of the Corporation to procure a judgment
in its favor (1) such indemnification shall be limited to expenses (including attorneys' fees) actually and
reasonably incurred by such person in the defense or settlement of such Proceeding, and (2) no indemnification
shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Delaware Court of Chancery or the court in
which such Proceeding was brought shall determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnify
for such expenses which the Delaware Court of Chancery or such other court shall deem proper. Notwithstanding
the foregoing, but subject to Section 6.05 of these Bylaws, the Corporation shall not be obligated to indemnify
a Director or officer of the Corporation in respect of a Proceeding (or part thereof) instituted by such
Director or officer, unless such Proceeding (or part thereof) has been authorized by the Board of Directors.

         The termination of any Proceeding by judgment, order settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal Proceeding, had reasonable cause to believe that his or her
conduct was unlawful.

         Section 6.02. Successful Defense. To the extent that a present or former Director or officers of the
Corporation has been successful on the merits or otherwise in defense of any Proceeding referred to in Section
6.01 hereof or in defense of any claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith.


                                                      20


         Section 6.03. Determination that Indemnification is Proper. Any indemnification of a present or former
Director or officer of the Corporation under Section 6.01 hereof (unless ordered by a court) shall be made by
the Corporation unless a determination is made that indemnification of the present or former Director or
officer is not proper in the circumstances because he or she has not met the applicable standard of conduct set
forth in Section 6.01 hereof. Any indemnification of a present or former employee or agent of the Corporation
under Section 6.01 hereof (unless ordered by a court) may be made by the Corporation upon a determination that
indemnification of the present or former employee or agent is proper in the circumstances because he or she has
met the applicable standard of conduct set forth in Section 6.01 hereof. Any such determination shall be made,
with respect to a person who is a Director or officer at the time of such determination, (a) by a majority vote
of the Directors who are not parties to such Proceeding, even though less than a quorum, or (b) by a committee
of such Directors designated by majority vote of such Directors, even though less than a quorum, or (c) if
there are no such Directors, or if such Directors so direct, by independent legal counsel in a written opinion,
or (d) by the stockholders.

         Section 6.04. Advance Payment of Expenses. Expenses (including attorneys' fees) incurred by a Director
or officer in defending any civil, criminal, administrative or investigative Proceeding shall be paid by the
Corporation in advance of the final disposition of such Proceeding upon receipt of an undertaking by or on
behalf of the Director or officer to repay such amount if it shall ultimately be determined that such person is
not entitled to be indemnified by the Corporation as authorized in this Article. Such expenses (including
attorneys' fees) incurred by former Directors and officers or other employees and agents may be so paid upon
such terms and conditions, if any, as the Corporation deems appropriate. The Board of Directors may authorize
the Corporation's counsel to represent such Director, officer, employee or agent in any Proceeding, whether or
not the Corporation is a party to such Proceeding.

         Section 6.05. Procedures for Indemnification of Directors and Officers. Any indemnification of a
Director or officer of the Corporation under Sections 6.01 and 6.02, or advance of costs, charges and expenses
to a Director or officer under Section 6.04 of these Bylaws, shall be made promptly, and in any event within
thirty (30) days, upon the written request of the Director or officer. If a determination by the Corporation
that the Director or officer is entitled to indemnification pursuant to this Article VI is required, and the
Corporation fails to respond within thirty (30) days to a written request for indemnity, the Corporation shall
be deemed to have approved such request. If the Corporation denies a written request for indemnity or
advancement of expenses, in whole or in part, or if payment in full pursuant to such request is not made within
thirty (30) days, the right to indemnification or advances as granted by this Article VI shall be enforceable
by the Director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in
connection with successfully establishing his or her right to indemnification, in whole or in part, in any such
Proceeding shall also be indemnified by the Corporation. It shall be a defense to any such Proceeding (other
than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 6.04 of
these Bylaws where the required undertaking, if any, has been received by the Corporation) that the claimant
has not met the standard of conduct set forth in Section 6.01 of these Bylaws, but the burden of proving such
defense shall be on the Corporation. Neither the


                                                      21


failure of the Corporation (including its Board of Directors, its independent legal counsel, and its
stockholders) to have made a determination prior to the commencement of such action that indemnification of the
claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth
in Section 6.01 of these Bylaws, nor the fact that there has been an actual determination by the Corporation
(including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.

         Section 6.06. Survival; Preservation of Other Rights. The foregoing indemnification provisions shall
be deemed to be a contract between the Corporation and each Director, officer, employee and agent who serves in
any such capacity at any time while these provisions as well as the relevant provisions of the Delaware General
Corporation Law are in effect and any repeal or modification thereof shall not affect any right or obligations
then existing with respect to any state of facts then or previously existing or any Proceeding previously or
thereafter brought or threatened based in whole or in part upon any such state of facts. Such a "contract
right" may not be modified retroactively without the consent of such Director, officer, employee or agent.

         The indemnification provided by this Article VI shall not be deemed exclusive of any other rights to
which those indemnified may be entitled under any bylaw, agreement, vote of stockholders or disinterested
Directors or otherwise, both as to action in such person's official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has ceased to be a Director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

         Section 6.07. Insurance. The Corporation may purchase and maintain insurance on behalf of any person
who is or was or has agreed to become a Director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a Director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability asserted against such person and
incurred by such person or on such person's behalf in any such capacity, or arising out of such person's status
as such, whether or not the Corporation would have the power to indemnify him or her against such liability
under the provisions of this Article VI, provided that such insurance is available on acceptable terms, which
determination shall be made by a vote of a majority of the entire Board of Directors.

         Section 6.08. Severability. If this Article VI or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each Director
or officer and may indemnify each employee or agent of the Corporation as to costs, charges and expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement with respect to a Proceeding,
whether civil, criminal, administrative or investigative, including a Proceeding by or in the right of the
Corporation, to the fullest extent permitted by any applicable portion of this Article VI that shall not have
been invalidated and to the fullest extent permitted by applicable law.


                                                      22


                                                  ARTICLE VII

                                                    OFFICES

         Section 7.01. Initial Registered Office. The initial registered office of the Corporation in the State
of Delaware shall be located at Corporation Trust Center, 1209 N. Orange Street in the City of Wilmington,
County of New Castle.

         Section 7.02. Other Offices. The Corporation may maintain offices or places of business at such other
locations within or without the State of Delaware as the Board of Directors may from time to time determine or
as the business of the Corporation may require.


                                                  ARTICLE VIII

                                               GENERAL PROVISION

         Section 8.01.  Dividends.

                 (a) Subject to any applicable provisions of law and the Certificate of Incorporation,
         dividends upon the shares of the Corporation may be declared by the Board of Directors at any regular
         or special meeting of the Board of Directors and any such dividend may be paid in cash, property, or
         shares of the Corporation's capital stock.

                 (b) A member of the Board of Directors, or a member of any committee designated by the Board
         of Directors shall be fully protected in relying in good faith upon the records of the Corporation and
         upon such information, opinions, reports or statements presented to the Corporation by any of its
         officers or employees, or committees of the Board of Directors, or by any other person as to matters
         the Director reasonably believes are within such other person's professional or expert competence and
         who has been selected with reasonable care by or on behalf of the Corporation, as to the value and
         amount of the assets, liabilities and/or net profits of the Corporation, or any other facts pertinent
         to the existence and amount of surplus or other funds from which dividends, might properly be declared
         and paid.

         Section 8.02. Execution of Instruments. Subject to such limitations as the Board of Directors may from
time to time impose and subject to Sections 8.05 and 8.06, the Chief Executive Officer, the President, any Vice
President, the Secretary, the Chief Financial Officer or the Treasurer may enter into any contract or execute
and deliver any instrument in the name and on behalf of the Corporation. The Board of Directors may authorize
any other officer or agent to enter into any contract or execute and deliver any instrument in the name and on
behalf of the Corporation. Any such authorization must be in writing or by electronic transmission and may be
general or limited to specific contracts or instruments.

         Section 8.03. Corporate Indebtedness. No loan shall be contracted on behalf of the Corporation, and no
evidence of indebtedness shall be issued in its name, unless authorized by


                                                      23


the Board of Directors. Such authorization may be general or confined to specific instances. Loans so
authorized may be effected at any time for the Corporation from any bank, trust company or other institution,
or from any firm, corporation or individual. All bonds, debentures, notes and other obligations or evidences of
indebtedness of the Corporation issued for such loans shall be made, executed and delivered as the Board of
Directors shall authorize. When so authorized by the Board of Directors, any part of or all the properties,
including contract rights, assets, business or good will of the Corporation, whether owned or thereafter
acquired, may be mortgaged, pledged, hypothecated or conveyed or assigned in trust as security for the payment
of such bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation, and of
the interest thereon, by instruments executed and delivered in the name of the Corporation.

         Section 8.04. Deposits. Any funds of the Corporation may be deposited from time to time in such banks,
trust companies or other depositories as may be determined by the Board of Directors or the Chief Executive
Officer, or by such officers or agents as may be authorized by the Board of Directors to make such
determination.

         Section 8.05. Checks, Drafts, etc.. All checks, drafts or demands for money and notes of the
Corporation shall be signed by such officer or officers or such agent or agents of the Corporation, and in such
manner, as the Board of Directors may from time to time determine.

         Section 8.06. Sale, Transfer, etc. of Securities. To the extent authorized by the Board of Directors,
any officer may sell, transfer, endorse, and assign any shares of stock, bonds or other securities owned by or
held in the name of the Corporation, and may make, execute and deliver in the name of the Corporation, under
its corporate seal, any instruments that may be appropriate to effect any such sale, transfer, endorsement or
assignment.

         Section 8.07. Voting as Stockholder. Unless otherwise determined by resolution of the Board of
Directors, the Chief Executive Officer, the President or any Vice President shall have full power and authority
on behalf of the Corporation to attend any meeting of stockholders of any corporation, partnership or other
entity, in which the Corporation may hold stock or other equity interests, and to act, vote (or execute proxies
to vote) and exercise in person or by proxy all other rights, powers and privileges incident to the ownership
of such stock. Such officers acting on behalf of the Corporation shall have full power and authority to execute
any instrument expressing consent to or dissent from any action of any such corporation, partnership or other
entity, without a meeting. The Board of Directors may by resolution from time to time confer such power and
authority upon any other person or persons.

         Section 8.08. Fiscal Year. The fiscal year of the Corporation shall commence on the first day of
January of each year (except for the Corporation's first fiscal year which shall commence on the date of
incorporation) and shall terminate each case on December 31.

         Section 8.09 Seal. The seal of Corporation shall be in such form as the Board of Directors may from
time to time determine and shall contain the name of the Corporation, the year of its incorporation and the
words "Corporate Seal" and "Delaware". The form of such seal shall be subject to alteration by the Board of
Directors. The seal may be used by causing it or a


                                                      24


facsimile thereof to be impressed, affixed or reproduced, or may be used in any other lawful manner.

         Section 8.10. Books and Records; Inspection. Except to the extent otherwise required by law, the books
and records of the Corporation shall be kept at such place or places within or without the State of Delaware as
may be determined from time to time by the Board of Directors, the Chief Executive Officer or the President.


                                                   ARTICLE IX

                                              AMENDMENT OF BYLAWS

         Section 9.01. Amendment. These Bylaws may be amended, altered or repealed:

                 (a) by resolution adopted by a majority of the Board of Directors at any special or regular
         meeting of the Board of Directors if, in the case of such special meeting only, notice of such
         amendment, alteration or repeal is contained in the notice or waiver of such meeting; or

                 (b) at any regular or special meeting of the stockholders upon the affirmative vote of the
         holders of three-fourths (3/4) or more of the combined voting power of the outstanding shares of the
         Corporation entitled to vote generally in the election of Directors if, in the case of such special
         meeting only, notice of such amendment, alteration or repeal is contained in the notice or waiver of
         notice of such meeting.


                                                   ARTICLE X

                                                  CONSTRUCTION

         Section 10.01. Construction. In the event of any conflict between the provisions of these Bylaws as in
effect from time to time and the provisions of the Certificate of Incorporation of the Corporation as in effect
from time to time, the provisions of such Certificate of Incorporation shall be controlling.


                                                      25

EX-99.10.3

                                                                                               Exhibit 10.3

                                           THE PHOENIX COMPANIES, INC

                                        INCENTIVE STOCK OPTION AGREEMENT

         1. The Phoenix Companies, Inc. ("Company's") hereby grants to the Optionee named below an option
("Option") to purchase, in accordance with and subject to the terms and restrictions of The Phoenix Companies,
Inc. Stock Incentive Plan ("Plan"), a copy of which is included with your brochure and made part hereof, the
number of shares of common stock, par value of $ .01 per share ("Common Stock") ("Shares") of the Company at
the option price per share set forth below. This page is the first page of the Phoenix Stock Option Agreement
(The "Agreement"), which describes in detail your rights with respect to the Option granted to you hereby and
which constitutes a legal agreement between you and The Company. The Option granted under this Agreement is
intended to be an incentive stock option under Section 422 of the Internal Revenue Code of 1986 (the "Code"),
as amended; provided that, to the extent that the value of any portion of the Option that becomes exercisable
in any calendar year exceeds the limitation contained in Section 422 (b)(7) of the Code such excess shall be
treated as a non-qualified stock option.

         1.    Optionee Name:

               Social Security Number:

         2.    Type of Option:          Incentive Stock Option

         3.    Grant Date:

               Number of Shares
               Covered by Option:

               Option Price per Share:

         4.    Expiration Date:

IN WITNESS WHEREOF, both The Phoenix Companies, Inc. and the Optionee agrees to be bound by the terms and
provisions of this Agreement, as of the date noted below.

                                          THE PHOENIX COMPANIES, INC.

Date:                                       By:__________________________________________________
                                                     Dona D. Young, Chairman, President & CEO


                                            OPTIONEE:____________________________________________
                                                           (Please sign and return this page)




                                           THE PHOENIX COMPANIES, INC

                                        INCENTIVE STOCK OPTION AGREEMENT

         1. The Phoenix Companies, Inc. ("Company's") hereby grants to the Optionee named below an option
("Option") to purchase, in accordance with and subject to the terms and restrictions of The Phoenix Companies,
Inc. Stock Incentive Plan ("Plan"), a copy of which is included with your brochure and made part hereof, the
number of shares of common stock, par value of $ .01 per share ("Common Stock") ("Shares") of the Company at
the option price per share set forth below. This page is the first page of the Phoenix Stock Option Agreement
(The "Agreement"), which describes in detail your rights with respect to the Option granted to you hereby and
which constitutes a legal agreement between you and The Company. The Option granted under this Agreement is
intended to be an incentive stock option under Section 422 of the Internal Revenue Code of 1986 (the "Code"),
as amended; provided that, to the extent that the value of any portion of the Option that becomes exercisable
in any calendar year exceeds the limitation contained in Section 422 (b)(7) of the Code such excess shall be
treated as a non-qualified stock option.

         1.    Optionee Name:

               Social Security Number:

         2.    Type of Option: Incentive Stock Option

         3.    Grant Date:

               Number of Shares
               Covered by Option:

               Option Price per Share:

         4.    Expiration Date:

IN WITNESS WHEREOF, both The Phoenix Companies, Inc. and the Optionee agrees to be bound by the terms and
provisions of this Agreement, as of the date noted below.

                                          THE PHOENIX COMPANIES, INC.

Date:                                       By:__________________________________________________
                                                     Dona D. Young, Chairman, President & CEO


                                            OPTIONEE:____________________________________________
                                                           (Please sign and return this page)

                                                       2




A. Definition of Certain Terms
Capitalized terms not otherwise defined herein, have the meaning ascribed to them in the Plan.

B. Terms and Conditions for Exercising Option

Except as provided below, this Option shall become exercisable to acquire Shares of Common Stock in
installments expressed as a percentage of the Number of Shares Covered by this Option from and after the annual
anniversary dates of the Grant Date of this Option as outlined below. The Option granted under this Agreement
may not be exercised for less than ten whole Shares, and no fractional shares will be issued at any time.

         First Anniversary:                 33 1/3 %
         Second Anniversary:                33 1/3 %
         Third Anniversary:                 33 1/3 %


C. Duration of Option

       (i) The Option granted under this Agreement shall become immediately and fully exercisable upon the
       Optionee's death and be exercisable as provided in the Plan at any time prior to the Expiration Date or
       within five years, whichever period is shorter.

       (ii) Upon the Optionee's "Approved Retirement" or "Disability" as defined in the Plan, the Option
       granted shall continue to vest and be exercisable at any time prior to the Expiration Date or within
       five years, whichever period is shorter. Although the Optionee will have five years following Approved
       Retirement or Disability to exercise this Option, to obtain the special tax-favored treatment of the
       Option as an Incentive Stock Option, the Optionee must exercise the Option within three months of the
       date of termination of employment on account of Approved Retirement and within one year after becoming
       Disabled.

       (iii) Upon termination of the Optionee's employment in the event of certain sales or divestitures as
       defined in the Plan, the Committee may provide that the Option shall continue to vest and be exercisable
       at any time prior to the Expiration Date or within three years, whichever period is shorter.

       (iv) Upon termination of employment or contractual relationship with the Company or participating
       Subsidiary for any other reason, the Optionee shall have a right to exercise any vested portion of the
       Option prior to the Expiration Date or within thirty days, whichever period is shorter.

       (v) The Option granted under this Agreement and not yet exercised shall be forfeited in the event of the
       Optionee's employment or contractual relationship with the Company or participating Subsidiary is
       terminated for "Cause" as defined in the Plan or for violation of the Company's established policy on
       Insider Trading.

                                                       3


D. Change of Control of the Company

Upon a Change in Control as defined in the Plan, the Option shall be immediately and fully exercisable. In the
case of a Change in Control, the Committee may provide that the Option may be cancelled in exchange for a cash
payment or Alternative Award as determined in accordance with the Plan.

E. Exercising the Option

This Option may be exercised for the number of Shares specified by giving notice to the Company's selected
stock option broker (the broker).

The notice should refer to this Option (by the date of grant), and the notice should include the following
information:

         1.   The number of shares of Common Stock for which the Option is being exercised.

         2.   The name or names of the persons in whose names the stock certificate for the Shares should be
              registered.

         3.   The address to which the stock certificate should be sent.

In addition to your notice, you must indicate the method by which you will pay the exercise price. Payment of
the exercise price may be made:

         1.   In cash;

         2.   By exchanging shares of Common Stock owned by the Optionee (which are not the subject of any
              pledge or other security interest);

         3.   Through an arrangement with a broker approved by the Company whereby payment of the exercise
              price is accomplished with the proceeds of the sale of Common Stock; or

         4.   By any combination of the foregoing.

The combined value of all cash paid and the Fair Market Value of any such Common Stock so tendered to the
Company, valued as of the date of such tender, must be at least equal to such Option Exercise Price required to
be paid for the Shares being exercised.

If payment is to be made in whole or part as cash, you must include a check payable to the broker.

F. Tax Payments and Withholding

Whenever Common Stock is to be issued or cash paid pursuant to the exercise of a Stock Option under this
Agreement, the Company shall have the power to withhold, or require the Optionee to remit, an amount sufficient
to satisfy Federal, state, and local withholding tax requirements relating to such transaction, and the Company
may defer payment of cash or the issuance of

                                                       4


Common Stock until such requirements are satisfied. The Company may permit the Optionee to elect, subject to such
conditions as the Company may impose:

         1.   To have Shares otherwise issuable upon the exercise of an Option withheld by the Company, or

         2.   To deliver to the Company previously acquired shares of Common Stock having a Fair Market Value
              as of the date of exercise equal to all or part of the Optionee's Federal, state, and local tax
              obligation associated with the transaction and cash equal to the balance of such tax obligation.

G. Adjustment of the Number of Option Shares

In the event of any Common Stock dividend or Common Stock split, recapitalization (including, but not limited
to, the payment of an extraordinary dividend), merger, consolidation, combination, spin-off, distribution of
assets to stockholders (other than ordinary cash dividends), exchange of shares, or other similar corporate
change, the aggregate number of Shares of Common Stock subject to this Option and the exercise price applicable
to this Option shall be appropriately adjusted as provided in the Plan and subject to applicable regulatory
restrictions; provided, however, that any fractional shares resulting from any such adjustment shall be
disregarded.

H. Delivery of Shares of Common Stock

Upon the exercise of this Option, in whole or in part, the Company shall deliver to the Optionee's brokerage
account shares in street name for the benefit of the employee. In the event that the Company shall determine
that any certificate issued pursuant to this Paragraph H must bear a legend restricting the transfer of such
Shares, such certificate shall bear the appropriate legend.

I. Non-Transferability of Option During Lifetime

This Option may not be sold, transferred, assigned or otherwise alienated or hypothecated other than by will or
by operation of the laws of descent and distribution or as otherwise provided in the Plan and is subject to
termination as provided in the Plan.

J. Miscellaneous

This Agreement is binding on you and your executors, administrators, heirs and personal and legal
representatives and on the Company and its successors or assigns.

The laws of the State of Delaware will control the interpretation and enforcement of this Agreement.

This Agreement, including the Cover Page and the Plan, contains the entire Agreement and all terms between you
and the Company with respect to the Option, and there are no other misunderstandings, warranties or
representations with respect to the Option.

The Optionee shall have no right, in respect to the Option granted, to vote on any matter submitted to Company
stockholders.

                                                       5


Nothing in this Agreement gives you the right to continue workings for or with the Company or any of its
subsidiaries nor changes the right which the Company has to terminate your employment at any time.

K. Plan Prevails

Any determination or interpretation by the Committee under or pursuant to this Agreement shall be final and
conclusive on all persons affected hereby. In the event of a conflict between any term of the Agreement and the
terms of the Plan, the term of the Plan shall control provided that, the Committee shall, to the maximum extent
possible consistent with the terms of the Plan, interpret this Agreement in a manner that is consistent with
its character as an incentive stock option under Section 422 of the Code.

                                                       6

EX-99.10.4

                                                                                                Exhibit 10.4

                                           THE PHOENIX COMPANIES, INC

                                      NON-QUALIFIED STOCK OPTION AGREEMENT

         1. The Phoenix Companies, Inc. ("Company's") hereby grants to the Optionee named below an option
("Option") to purchase, in accordance with and subject to the terms and restrictions of The Phoenix Companies,
Inc. Stock Incentive Plan ("Plan"), a copy of which is included with your brochure and made part hereof, the
number of shares of common stock, par value of $ .01 per share ("Common Stock") ("Shares") of the Company at
the option price per share set forth below. This page is the first page of the Phoenix Stock Option Agreement
(The "Agreement") which describes in detail your rights with respect to the Option granted to you hereby and
which constitutes a legal agreement between you and The Company:

         1. Optionee Name:

            Social Security Number:

         2. Type of Option:         Nonqualified Stock Option

         3. Grant Date:

            Number of Shares
            Covered by Option:

            Option Price per Share:

         4. Expiration Date:

IN WITNESS WHEREOF, both The Phoenix Companies, Inc. and the Optionee agrees to be bound by the terms and
provisions of this Agreement, as of the date noted below.

                                          THE PHOENIX COMPANIES, INC.

Date:                                                By:__________________________________________________
                                                           Dona D. Young, Chairman, President & CEO



                                                     OPTIONEE:____________________________________________
                                                                 (Please sign and return this page)




                                           THE PHOENIX COMPANIES, INC

                                      NON-QUALIFIED STOCK OPTION AGREEMENT

         1. The Phoenix Companies, Inc. ("Company's") hereby grants to the Optionee named below an option
("Option") to purchase, in accordance with and subject to the terms and restrictions of The Phoenix Companies,
Inc. Stock Incentive Plan ("Plan"), a copy of which is included with your brochure and made part hereof, the
number of shares of common stock, par value of $ .01 per share ("Common Stock") ("Shares") of the Company at
the option price per share set forth below. This page is the first page of the Phoenix Stock Option Agreement
(The "Agreement") which describes in detail your rights with respect to the Option granted to you hereby and
which constitutes a legal agreement between you and The Company:

         1. Optionee Name:

            Social Security Number:

         2. Type of Option:         Nonqualified Stock Option

         3. Grant Date:

            Number of Shares
            Covered by Option:

            Option Price per Share:

         4. Expiration Date:

IN WITNESS WHEREOF, both The Phoenix Companies, Inc. and the Optionee agrees to be bound by the terms and
provisions of this Agreement, as of the date noted below.

                                          THE PHOENIX COMPANIES, INC.

Date:                                                By:__________________________________________________
                                                           Dona D. Young, Chairman, President & CEO



                                                     OPTIONEE:____________________________________________
                                                                 (Please sign and return this page)

                                                       2




A. Definition of Certain Terms
Capitalized terms not otherwise defined herein, have the meaning ascribed to them in the Plan.

B. Terms and Conditions for Exercising Option

Except as provided below, this Option shall become exercisable to acquire Shares of Common Stock in
installments expressed as a percentage of the Number of Shares Covered by this Option from and after the annual
anniversary dates of the Grant Date of this Option as outlined below. The Option granted under this Agreement
may not be exercised for less than ten whole Shares, and no fractional shares will be issued at any time.

         First Anniversary:                 33 1/3 %
         Second Anniversary:                33 1/3 %
         Third Anniversary:                 33 1/3 %


C. Duration of Option

       (i) The Option granted under this Agreement shall become immediately and fully exercisable upon the
       Optionee's death and be exercisable as provided in the Plan at any time prior to the Expiration Date or
       within five years, whichever period is shorter.

       (ii) Upon the Optionee's "Approved Retirement" or "Disability" as defined in the Plan, the Option
       granted shall continue to vest and be exercisable at any time prior to the Expiration Date or within
       five years, whichever period is shorter.

       (iii) Upon termination of the Optionee's employment in the event of certain sales or divestitures as
       defined in the Plan, the Committee may provide that the Option shall continue to vest and be exercisable
       at any time prior to the Expiration Date or within three years, whichever period is shorter.

       (iv) Upon termination of employment or contractual relationship with the Company or participating
       Subsidiary for any other reason, the Optionee shall have a right to exercise any vested portion of the
       Option prior to the Expiration Date or within thirty days, whichever period is shorter.

       (v) The Option granted under this Agreement and not yet exercised shall be forfeited in the event of the
       Optionee's employment or contractual relationship with the Company or participating Subsidiary is
       terminated for "Cause" as defined in the Plan or for violation of the Company's established policy on
       Insider Trading.

                                                       3





D. Change of Control of the Company

Upon a Change in Control as defined in the Plan, the Option shall be immediately and fully exercisable. In the
case of a Change in Control, the Committee may provide that the Option may be cancelled in exchange for a cash
payment or Alternative Award as determined in accordance with the Plan.

E. Exercising the Option

This Option may be exercised for the number of Shares specified by giving notice to the Company's selected
stock option broker (the broker).

The notice should refer to this Option (by the date of grant), and the notice should include the following
information:

         1.  The number of shares of Common Stock for which the Option is being exercised.

         2.  The name or names of the persons in whose names the stock certificate for the Shares should be
             registered.

         3.  The address to which the stock certificate should be sent.

In addition to your notice, you must indicate the method by which you will pay the exercise price. Payment of
the exercise price may be made:

         1.  In cash;

         2.  By exchanging shares of Common Stock owned by the Optionee (which are not the subject of any
             pledge or other security interest);

         3.  Through an arrangement with a broker approved by the Company whereby payment of the exercise
             price is accomplished with the proceeds of the sale of Common Stock; or

         4.  By any combination of the foregoing.

The combined value of all cash paid and the Fair Market Value of any such Common Stock so tendered to the
Company, valued as of the date of such tender, must be at least equal to such Option Exercise Price required to
be paid for the Shares being exercised.

If payment is to be made in whole or part as cash, you must include a check payable to the broker.

F. Tax Payments and Withholding

Whenever Common Stock is to be issued or cash paid pursuant to the exercise of a Stock Option under this
Agreement, the Company shall have the power to withhold, or require the Optionee to remit, an amount sufficient
to satisfy Federal, state, and local withholding tax requirements relating to such transaction, and the Company
may defer payment of cash or the issuance of

                                                       4


Common Stock until such requirements are satisfied. The Company may permit the Optionee to elect, subject to
such conditions as the Company may impose:

         1.  To have Shares otherwise issuable upon the exercise of an Option withheld by the Company, or

         2.  To deliver to the Company previously acquired shares of Common Stock having a Fair Market Value
             as of the date of exercise equal to all or part of the Optionee's Federal, state, and local tax
             obligation associated with the transaction and cash equal to the balance of such tax obligation.

G. Adjustment of the Number of Option Shares

In the event of any Common Stock dividend or Common Stock split, recapitalization (including, but not limited
to, the payment of an extraordinary dividend), merger, consolidation, combination, spin-off, distribution of
assets to stockholders (other than ordinary cash dividends), exchange of shares, or other similar corporate
change, the aggregate number of Shares of Common Stock subject to this Option and the exercise price applicable
to this Option shall be appropriately adjusted as provided in the Plan and subject to applicable regulatory
restrictions; provided, however, that any fractional shares resulting from any such adjustment shall be
disregarded.

H. Delivery of Shares of Common Stock

Upon the exercise of this Option, in whole or in part, the Company shall deliver to the Optionee's brokerage
account shares in street name for the benefit of the employee. In the event that the Company shall determine
that any certificate issued pursuant to this Paragraph H must bear a legend restricting the transfer of such
Shares, such certificate shall bear the appropriate legend.

I. Non-transferability of Option During Lifetime

This Option may not be sold, transferred, assigned or otherwise alienated or hypothecated other than by will or
by operation of the laws of descent and distribution or as otherwise provided in the Plan and is subject to
termination as provided in the Plan.

J. Miscellaneous

This Agreement is binding on you and your executors, administrators, heirs and personal and legal
representatives and on the Company and its successors or assigns.

The laws of the State of Delaware will control the interpretation and enforcement of this Agreement.

This Agreement, including the Cover Page and the Plan, contains the entire Agreement and all terms between you
and the Company with respect to the Option, and there are no other misunderstandings, warranties or
representations with respect to the Option.

The Optionee shall have no right, in respect to the Option granted, to vote on any matter submitted to Company
stockholders.

                                                       5


Nothing in this Agreement gives you the right to continue workings for or with the Company or any of its
subsidiaries nor changes the right which the Company has to terminate your employment at any time.

K. Plan Prevails

Any determination or interpretation by the Committee under or pursuant to this Agreement shall be final and
conclusive on all persons affected hereby. In the event of a conflict between any term of the Agreement and the
terms of the Plan, the term of the Plan shall control.

                                                       6

EX-99.10.7

                                                                                                  EXHIBIT 10.7












                                            THE PHOENIX COMPANIES, INC.
                                                EXCESS BENEFIT PLAN

                                 as amended and restated effective January 1, 2003












                                                   ARTICLE I

                                            PURPOSE AND EFFECTIVE DATE


       1.1 Purpose. The Phoenix Companies, Inc. Excess Benefit Plan (the "Plan") is maintained solely for the
purpose of providing benefits for certain participants in the Employee Pension Plan in excess of the
limitations on contributions and benefits imposed by Section 415 of the Internal Revenue Code.

       1.2 Effective Date. The Plan was first effective January 1, 1976. This amendment and restatement of the
Plan is effective January 1, 2003.

                                                   ARTICLE II

                                                  DEFINITIONS


       2.1 "Beneficiary" shall mean the Beneficiary designated under the Employee Pension Plan, except that the
Participant may designate a Beneficiary hereunder by delivering to the Plan Administrator a written designation
of Beneficiary specifically made with respect to this Plan.

       2.2 "Benefit Plans Committee" shall mean the committee appointed by and serving at the pleasure of the
Board of Directors of the Employer to administer the Plan.

       2.3 "Code" shall mean the Internal Revenue Code of 1986, as it may be amended from time to time, and the
rules and regulations promulgated thereunder.

       2.4 "Employee Pension Plan" shall mean The Phoenix Companies, Inc. Employee Pension Plan, a defined
benefit pension plan maintained by the Employer, as it may be amended from time to time.

       2.5 "Employer" shall mean Phoenix Life Insurance Company and any affiliated employer that adopts the
Plan with the consent of the Benefit Plans Committee.

       2.6 "Participant" shall mean an employee of the Employer who is participating in the Employee Pension
Plan and whose benefit under the Employee Pension Plan is reduced by reason of the application of Section 415
of the Code.

       2.7 "Plan" shall mean The Phoenix Companies, Inc. Excess Benefit Plan as is set forth in this document
as it may be amended from time to time.

       2.8 "Plan Administrator" shall mean the Benefit Plans Committee or the person designated as such by the
Benefit Plans Committee.

       Unless the context otherwise indicates, words and phrases capitalized and not otherwise defined herein
are terms defined in the Employee Pension Plan and have the same meaning ascribed to them under the Employee
Pension Plan.



                                                  ARTICLE III

                                                  ELIGIBILITY


       3.1 Eligibility. To receive a benefit, a Participant or his Beneficiary must qualify for a
benefit under the Employee Pension Plan, the amount of which is reduced by reason of the application of the
limitations set forth in Section 415 of the Code. Employees hired by Phoenix Equity Planning Corporation or
Phoenix Investment Counsel, Inc. after June 14, 1995 who were not employed by Phoenix Life Insurance Company or
its subsidiaries immediately prior to their date of hire by Phoenix Equity Planning Corporation or Phoenix
Investment Counsel, Inc. shall not be eligible to participate in this Excess Benefit Plan.

                                                  ARTICLE IV

                                           BENEFITS; PAYMENT; VESTING

       4.1 Benefits. The benefits under this Plan to which an eligible Participant or the Participant's
Beneficiary shall be entitled, shall be an amount equal to the difference, if any, between (a) and (b) below:

             (a)   The benefit to which the Participant would be entitled under the Employee Pension Plan if
                   such benefit were computed without the restrictions or the limitations imposed by Section
                   415 of the Code, as now or hereafter in effect;

                                                            less

             (b) The amount of benefit payable under the Employee Pension Plan.

       The amount of benefit so determined shall be subject to such adjustments as the Plan Administrator, from
time to time, deems appropriate to reflect changes in the application of the limitations imposed by said
Section 415, which would cause a restriction or limitation of benefits with respect to the computation of
benefits under the Employee Pension Plan.

       Benefits accrued under this Plan before March 1, 2003 are subject to cost of living adjustments as
described in the Employee Pension Plan.

       To the extent that this Section 4.1 requires the determination of the amount of benefit payable under
the Employee Pension Plan, only the benefit payable with respect to Service credited on and after January 1,
1993 shall be taken into account for purposes of calculating the benefit payable under this Plan to a Former
Home Life Employee.

       4.2   Payment of Benefits.

             (a)   The payment of benefits to which a Participant or Beneficiary shall be entitled under this
                   Plan shall be made in the same form and manner and at

                                                      -2-



                   the same time as is applicable or elected under the Employee Pension Plan.

             (b)   Any benefit payable under the Employee Pension Plan shall be solely in accordance with the
                   terms and provisions thereof, and nothing in this Plan shall operate or be construed in any
                   way to modify, amend or affect the terms and provisions of the Employee Pension Plan.

             (c)   It is hereby provided that, if the Participant elects to participate in the Phoenix OPT Plan
                   (a separate non-qualified retirement plan maintained by The Phoenix Companies, Inc.) the
                   Employer's obligation for payment of benefits under this Plan shall be irrevocably cancelled
                   and the Participant shall have no rights or claims for benefits under this Plan.

       4.3 Vesting/Forfeiture of Benefits. No Participant under this Plan shall have a vested
(non-forfeitable) interest under this Plan until such Participant's satisfaction of one of the following
conditions: the Participant's attainment of Early Retirement Age under the Employee Pension Plan; the
Participant's attainment of Normal Retirement Age under the Employee Pension Plan; the Participant's becoming
Disabled, within the meaning given under the Employee Pension Plan; or the Participant's death. Any Participant
who terminates employment with the Employer prior to having satisfied one of the foregoing conditions shall
have no right to benefits under this Excess Benefit Plan.

                                                   ARTICLE V

                                              CLAIMS FOR BENEFITS

5.1      Claims for Benefits.

             (a)   Claims for benefits under the Plan may be filed with the Plan Administrator on forms
                   supplied by the Plan Administrator. Written or electronic notice of the disposition of a
                   claim shall be furnished to the claimant within ninety (90) days after the application is
                   filed (or within one hundred eighty (180) days if special circumstances require an extension
                   of time for processing the claim and if written notice of such extension and circumstances
                   are communicated to the claimant within the initial ninety (90)-day period). In the event
                   the claim is wholly or partially denied, the reasons for the denial shall be specifically
                   set forth in the notice in language calculated to be understood by the claimant, pertinent
                   provisions of the Plan on which the decision is based shall be cited, and, where
                   appropriate, a description of any additional material or information necessary to perfect
                   the claim, and an explanation of why such material or information is necessary, will be
                   provided. In addition, the claimant shall be furnished with an explanation of the Plan's
                   claims review procedure and the time limits applicable to such procedures, including a
                   statement of the claimant's right to bring a civil action under Section 502(a) of ERISA
                   following an adverse benefit determination on review. A claimant must


                                                      -3-



                   request a review of a denied claim in accordance with the procedures described in the
                   following paragraph before the claimant is permitted to bring a civil action for benefits.

                   Any Employee, former Employee, or authorized representative or Beneficiary of either, who
                   has been denied a benefit by a decision of the Plan Administrator shall be entitled to
                   request the Plan Administrator to give further consideration to his claim by filing with the
                   Plan Administrator (on a form which may be obtained from the Plan Administrator) a request
                   for review. Such request, together with a written statement of the reasons why the claimant
                   believes his claim should be allowed, shall be filed with the Plan Administrator no later
                   than sixty (60) days after receipt of the notification provided above. If such request is so
                   filed, the claimant or his representative may submit written comments, documents, records
                   and other information relating to the claim to the Plan Administrator within sixty (60) days
                   after receipt of the notification provided above. The claim for review shall be given a full
                   and fair review that takes into account all comments, documents, records and other
                   information submitted that relates to the claim, without regard to whether such information
                   was submitted or considered in the initial benefit determination. The Plan Administrator
                   shall provide the claimant or his representative with written or electronic notice of the
                   final decision as to the allowance of the claim within sixty (60) days of receipt of the
                   request for review (or within one hundred twenty (120) days if special circumstances
                   requires an extension of time for processing the request and if written notice of such
                   extension and circumstances is given to the claimant or his representative within the
                   initial sixty (60)-day period). Such communication shall be written in a manner calculated
                   to be understood by the claimant and shall include specific reasons for the decision,
                   specific references to the pertinent Plan provisions on which the decision is based, a
                   statement of the claimant or his representative's right to bring a civil action under
                   Section 502(a) of ERISA and a statement that the claimant or his beneficiary is entitled to
                   receive, upon request and free of charge, reasonable access to and copies of, all documents,
                   records and other information relevant to the claim for benefits. A document is relevant to
                   the claim for benefits if it was relied upon in making the determination, was submitted,
                   considered or generated in the course of making the determination or demonstrates that
                   benefit determinations are made in accordance with the Plan and that Plan provisions have
                   been applied consistently with respect to similarly situated claimants.

             (b)   Any payment to any Participant, or to such Participant's legal representative or
                   Beneficiary, in accordance with the provisions of this Plan, shall be in full satisfaction
                   of all claims hereunder against the Employer. The Plan Administrator may require such
                   Participant, legal representative, or Beneficiary, as a condition precedent to such payment,
                   to execute a receipt and release therefor in such form as it shall determine.

                                                      -4-



                   If the Plan Administrator shall receive evidence satisfactory to the Plan Administrator that
                   any payee under this Plan is a minor, or is legally, physically, or mentally incompetent to
                   receive and to give valid release for any payment due him or her under this Plan, any such
                   payment, or any part thereof, may, unless claim therefor shall have been made to the Plan
                   Administrator by a duly appointed executor, administrator, guardian, committee, or other
                   legal representative of such payee, be paid by the Plan Administrator to such payee's
                   spouse, child, parent or other blood relative, or to any person, persons or institutions
                   deemed by the Plan Administrator to have incurred expense for or on behalf of such payee,
                   and any payment so made shall, to the extent thereof, be in full settlement of all liability
                   in respect of such payee. If a dispute arises as to the proper recipient of any payments,
                   the Plan Administrator in its sole discretion may withhold or cause to be withheld such
                   payments until the dispute shall have been determined by a court of competent jurisdiction
                   or shall have been settled by the parties concerned.

             (c)   If any benefits payable under this Plan to a Participant, or to such Participant's legal
                   representative or Beneficiary, cannot be paid by reason that such person cannot be located
                   for three (3) years after reasonable efforts have been made to locate such person, the Plan
                   Administrator may declare such benefits forfeited and return such benefits to the Employer;
                   provided, however, that in the event such Participant, or such Participant's legal
                   representative or Beneficiary, is subsequently located or files a claim for benefits, such
                   amount plus interest shall be reinstated to the Participant's account for the benefit of
                   such Participant, or such Participant's legal representative or Beneficiary, as the case may
                   be.

                                                   ARTICLE VI

                                             AMENDMENT AND TERMINATION


       6.1 Amendment. The Benefit Plans Committee shall have the right to amend this Plan at any time
and from time to time, including a retroactive amendment, by resolution adopted by it at a meeting duly called
or by unanimous written consent in accordance with the Employer's Articles of Incorporation, Bylaws and
applicable law. Any such amendment shall become effective upon the date stated therein, and shall be binding on
all Participants and Beneficiaries, except as otherwise provided in such amendment; provided, however, that
said amendment shall not adversely affect benefits payable to a Participant or Beneficiary where the cause
giving rise to such benefit (e.g., retirement) has already occurred.

       6.2 Termination of the Plan. The Employer has established this Plan with the bona fide intention
and expectation that from year to year it will deem it advisable to continue it in effect. However, the
Employer, in its sole discretion, reserves the right to terminate the Plan in its entirety at any time without
the consent of any Participant; provided, however, that in such event, benefits shall not be affected where the
cause giving rise to such benefit (e.g., retirement)

                                                      -5-



has already occurred. All other benefits accrued hereunder shall immediately be forfeited. Any such termination
shall be accomplished by resolution of the Benefit Plans Committee adopted at a meeting duly called or by
unanimous written consent in accordance with the Employer's Articles of Incorporation, Bylaws and applicable
law.

                                                  ARTICLE VII

                                           SOURCE OF BENEFIT PAYMENTS


     No special or separate fund shall be established by the Company and no segregation of assets shall be made
to assure the payment of benefits under the Plan. No Participant shall have any right, title, or interest
whatsoever in any specific asset of the Company. Nothing contained in this Plan and no action taken pursuant to
its provisions shall create or be construed to create a trust of any kind, or a fiduciary relationship, between
the Company and a Participant or any other person. To the extent that any person acquires a right to receive
payments under this Plan, such right shall be no greater than the right of an unsecured general creditor of the
Company.

                                                  ARTICLE VIII

                                                    GENERAL


       8.1 To the extent permitted by law, the right of any Participant or Beneficiary to any benefit or
payment hereunder shall not be subject in any manner to attachment or other legal process, and no such benefit
or payment shall be subject to anticipation, alienation, sale, transfer, assignment, or encumbrance.

       8.2 The Plan Administrator shall have sole discretionary authority to determine all questions arising
under the Plan, to interpret the provisions of the Plan and to construe all of its terms, to adopt, amend and
rescind rules and regulations for the administration of the Plan and generally to conduct and administer the
Plan and to make all determinations in connection with the Plan as may be necessary or advisable. All such
actions of the Plan Administrator shall be conclusive and binding on all persons.

       8.3 This Plan shall be governed by and construed in accordance with the laws of the State of Connecticut
other than and without reference to any provisions of such laws regarding choice of laws or conflict of laws,
to the extent such laws are not pre-empted by the Employee Retirement Income Security Act of 1974, as amended.

       8.4 The establishment of this Plan shall not be construed as giving to any Participant, employee or any
person whomsoever, any legal, equitable or other rights against the Employer, or its officers, directors,
agents or shareholders, or as giving to any Participant or Beneficiary any interest in the assets or business
of the Employer or giving any employee the right to be retained in the employment of the Employer. All
employees and Participants shall be subject to discharge to the same extent they would have been if this Plan
had never been adopted.

                                                      -6-




       8.5 The Company may withhold from a payment any federal, state or local taxes required by law to be
withheld with respect to such payments and such sums as the Company may reasonably estimate are necessary to
cover taxes for which the Company may be liable and which may be assessed with regard to such payment.

       8.6 The illegality of any particular provision of this document shall not affect the other provisions
and the document shall be construed in all respects as if such invalid provision were omitted.

                                                   ARTICLE IX

                                            PARTICIPATING EMPLOYERS


       9.1 Adoption of Plan by Other Employers. With the consent of the Benefit Plans Committee, any
other corporation may adopt the Plan and all of the provisions hereof and participate herein as a Participating
Employer by a properly executed document evidencing said intent and will of such Participating Employer.

       9.2   Requirements of Participating Employers.

             (a)   Benefits payable under the Plan to employees of the Participating Employer are funded
                   through the Participating Employer's general assets. The Participating Employer agrees to
                   pay and assumes all liability with respect to all benefits payable under the Plan to past,
                   present and future employees of the Participating Employer, their spouses and other
                   dependents and beneficiaries in accordance with the terms of the Plan. Notwithstanding the
                   foregoing, Phoenix Life Insurance Company and not Phoenix Equity Planning Corporation nor
                   Phoenix Investment Counsel, Inc. shall pay and assume liability for benefits payable under
                   the Plan to Employees of Phoenix Equity Planning Corporation and Phoenix Investment Counsel,
                   Inc. with respect to service completed before January 1, 1996.

             (b)   The Plan Administrator shall keep separate books and records concerning the contributions
                   and benefits payable under the Plan with respect to the Participating Employer and the
                   Employees of the Participating Employer.

             (c)   The Participating Employer shall pay to Phoenix Life Insurance Company its proportionate
                   share of any administrative expenses of the Plan which are to be paid by the Employer.

       9.3 Designation of Agent. Each Participating Employer shall be deemed to have designated
irrevocably the Benefit Plans Committee and the Plan Administrator as its agents.

                                                      -7-



       9.4   Plan Amendment.

             (a)   Subject to the provisions of paragraph (b) hereof, the Participating Employer hereby
                   delegates to the Employer the right at any time to amend the Plan in accordance with the
                   terms of the Plan, provided that any such amendment could not affect the Participating
                   Employer's share of the cost of the Plan. If an amendment could affect the Participating
                   Employer's share of the cost of the Plan, then such amendment shall not be effective with
                   respect to the Participating Employer until approved by the Participating Employer. Any such
                   amendment shall be adopted by the Participating Employer's Benefit Plans Committee unless
                   such amendment could significantly affect the Participating Employer's share of the cost of
                   the Plan, as determined by the Participating Employer's Benefit Plans Committee, in which
                   case such amendment shall be adopted by the Participating Employer's Board of Directors in
                   accordance with the Participating Employer's Articles of Incorporation, Bylaws and
                   applicable law and shall become effective as provided therein upon its execution.

             (b)   No amendment to the Plan shall be effective with respect to the Participating Employer until
                   45 days after a copy of the amendment shall have been delivered to the Participating
                   Employer, unless the Participating Employer shall have waived its right to receive such
                   advance copy of the amendment.

       9.5 Withdrawal of a Participating Employer. A Participating Employer may terminate its
participation in the Plan by giving the Benefit Plans Committee prior written notice specifying a termination
date which shall be the last day of a month at least 30 days subsequent to the date such notice is delivered to
the Benefit Plans Committee, unless the Benefit Plans Committee shall have waived its right to such notice. The
Benefit Plans Committee may terminate a Participating Employer's participation in the Plan as of any
termination date by giving the Participating Employer prior written notice specifying a termination date which
shall be the last day of a month at least 30 days subsequent to the date such notice is delivered to the
Participating Employer, unless the Participating Employer shall have waived its right to such notice.

       9.6 Plan Administrator's Authority. The Plan Administrator shall have all of the duties and
responsibilities authorized by the Plan and shall have the authority to make any and all rules, regulations and
decisions necessary or appropriate to effectuate the terms of the Plan, which shall be binding upon each
Participating Employer and all Participants.

                                                      -8-

EX-99.10.8

                                                                                                   Exhibit 10.8






                                          THE PHOENIX COMPANIES, INC.
                           NON-QUALIFIED DEFERRED COMPENSATION AND EXCESS INVESTMENT
                                                      PLAN

                            As amended and restated effective as of January 1, 2004









                                               TABLE OF CONTENTS

                                                                                                           PAGE

   ARTICLE I  PURPOSE AND EFFECTIVE DATE....................................................................1

        1.01    Purpose.....................................................................................1
        1.02    Effective Date..............................................................................1

   ARTICLE II  DEFINITIONS..................................................................................1

        2.01    "Beneficiary"...............................................................................1
        2.02    "Benefit Plans Committee"...................................................................1
        2.03    "Code"......................................................................................1
        2.04    "Company"...................................................................................1
        2.05    "Contributions".............................................................................2
        2.06    "Deferred Compensation Benefit".............................................................2
        2.07    "Deferred Compensation Credit"..............................................................2
        2.08    "Deferred Compensation Investment Account...................................................2
        2.09    "Disabled"..................................................................................2
        2.10    "Earnings"..................................................................................2
        2.11    "Employee"..................................................................................2
        2.12    "ERISA".....................................................................................2
        2.13     "Excess Earnings"..........................................................................2
        2.14     "Excess Investment Account"................................................................2
        2.15    "Excess Investment Benefit".................................................................2
        2.16    "Excess Investment Credits".................................................................2
        2.17    "Investment Funds"..........................................................................2
        2.18    "Matching Contributions"....................................................................2
        2.19    "Non-Benefits Employee".....................................................................2
        2.20    "Participant"...............................................................................3
        2.21    "Participating Employer"....................................................................3
        2.22    "Plan"......................................................................................3
        2.23    "Plan Administrator"........................................................................3
        2.24    "Plan Year".................................................................................3
        2.25    "Savings and Investment Plan"...............................................................3

   ARTICLE III  PARTICIPATION...............................................................................3

        3.01    Eligibility.................................................................................3
        3.02    Commencement of Participation...............................................................3
        3.03    Termination of Participation................................................................3

   ARTICLE IV  EXCESS INVESTMENT BENEFIT....................................................................4


                                                     -i-


                                              TABLE OF CONTENTS
                                                 (continued)

                                                                                                         PAGE

        4.01    Excess Investment Benefit...................................................................4
        4.02    Excess Investment Credits...................................................................4
        4.03    Excess Investment Plan Election.............................................................4

   ARTICLE V  DEFERRED COMPENSATION

        5.01    Deferred Compensation Benefit...............................................................5
        5.02    Deferred Compensation Credit................................................................5
        5.03    Deferred Compensation Election..............................................................5

   ARTICLE VI  INVESTMENT OF AND PAYMENTS FROM THE ACCOUNTS.................................................5

        6.01    Investment Accounts.........................................................................5
        6.02    Company Retains Control of Deemed Investments...............................................6
        6.03    Value of Benefit............................................................................6
        6.04    Payment of Benefit..........................................................................6
        6.05    Death Benefit...............................................................................6
        6.06    Hardship Withdrawals........................................................................6

   ARTICLE VII  FUNDING.....................................................................................7

        7.01    Funding.....................................................................................7

   ARTICLE VIII  CLAIMS FOR BENEFITS........................................................................7

        8.01    Claims Procedure............................................................................7
        8.02    Claims Review Procedure.....................................................................7
        8.03    Receipt and Release for Payments............................................................8
        8.04    Lost or Unknown Participants................................................................9

   ARTICLE IX  MISCELLANEOUS................................................................................9

        9.01    Non-Guarantee of Employment.................................................................9
        9.02    Rights Under Savings and Investment Plan....................................................9
        9.03    Amendments/Termination......................................................................9
        9.04    Nonassignability............................................................................9
        9.05    Plan Administration........................................................................10
        9.06    Successor Company..........................................................................10
        9.07    Governing Law..............................................................................10
        9.08    Tax Withholding............................................................................10
        9.09    Illegality of Particular Provision.........................................................10

   ARTICLE X  PARTICIPATING EMPLOYERS......................................................................10


                                                      -ii-


                                               TABLE OF CONTENTS
                                                  (continued)

                                                                                                          PAGE


       10.01    Adoption of Plan by Other Employers........................................................10
       10.02    Requirements of Participating Employers....................................................10
       10.03    Designation of Agent.......................................................................11
       10.04    Plan Amendment.............................................................................11
       10.05    Withdrawal of a Participating Employer.....................................................11
       10.06    Administrator's Authority..................................................................12


                                                     -iii-


                                          THE PHOENIX COMPANIES, INC.
                         NON-QUALIFIED DEFERRED COMPENSATION AND EXCESS INVESTMENT
                                                     PLAN

                                                   ARTICLE I
                                           PURPOSE AND EFFECTIVE DATE

1.01     Purpose. The Phoenix Companies, Inc. Non-Qualified Deferred Compensation and Excess Investment Plan
         (the "Plan") is intended to provide Employees with a plan to defer Compensation and Incentive awards
         as well as provide Employees with contributions lost due to restrictions on defined contribution plans
         under Sections 401(a)(17), 401(k), 401(m), 402(g) and 415 of the Internal Revenue Code of 1986, as
         amended, which primarily affect higher-paid Employees. The intent is to provide Employees with
         allocations under the Excess Investment Benefit portion of the Plan that, when added to such
         Employee's contributions under The Phoenix Companies, Inc. Savings and Investment Plan, will be
         similar to contributions other Employees can receive under such plan. The Plan is intended to be an
         unfunded plan under the Employee Retirement Income Security Act of 1974, as amended, that is
         maintained primarily for the purpose of providing deferred compensation for a select group of
         management or highly compensated employees.

1.02     Effective Date. This Plan was first effective January 1, 1988. This Plan was amended and restated
         effective March 3, 2003. This amendment and restatement of the Plan shall be effective as of January
         1, 2004.

                                                  ARTICLE II
                                                  DEFINITIONS

         Wherever used in this Plan, unless the context clearly indicates otherwise, the following terms shall
have the following meanings:

2.01     "Beneficiary" means the person, persons or entity, including one or more trusts, last designated by a
         Participant on a form or electronic media and accepted by the Plan Administrator or its duly
         authorized representative as a beneficiary, co-beneficiary, or contingent beneficiary to receive
         benefits payable under the Plan in the event of the death of the Participant. In the absence of any
         such designation, the Beneficiary shall be the Participant's spouse or, if there is no spouse, the
         Participant's estate.

2.02     "Benefit Plans Committee" means the committee appointed by and serving at the pleasure of the Board of
         Directors of the Company to administer the Plan.

2.03     "Code" means the Internal Revenue Code of 1986, as amended.

2.04     "Company" means Phoenix Life Insurance Company and any Participating Employer.


                                                      -1-


2.05     "Contributions" shall have the meaning provided under the Savings and Investment Plan.

2.06     "Deferred Compensation Benefit" means the amount determined in accordance with the provisions of
         Article V of this Plan.

2.07     "Deferred Compensation Credit" means the amount determined in accordance with the provisions of
         Article V of this Plan.

2.08     Deferred Compensation Investment Account means the book account established on behalf of a Participant
         under Article VI of this Plan.

2.09     "Disabled" shall mean a Participant who is receiving benefits under the Company's group long-term
         disability benefits plan.

2.10     "Earnings" shall have the meaning provided under the Savings and Investment Plan; provided, however,
         that such Earnings shall not be subject to the limit set forth in Section 401(a)(17) of the Code.

2.11     "Employee" means any person who is employed by the Company on an hourly or salaried basis other than a
         Non-Benefits Employee. "Employee" shall not include leased employees within the meaning of Sections
         414(n)(2) and 414(c)(2) of the Code.

2.12     "ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

2.13     "Excess Earnings" means the excess of a Participant's Earnings over the limit set forth in Section
         401(a)(17) of the Code.

2.14     "Excess Investment Account" means the book account established on behalf of a Participant under
         Article VI of this Plan.

2.15     "Excess Investment Benefit" means the amount determined in accordance with the provisions of Article IV
         of this Plan.

2.16     "Excess Investment Credits" means the amounts determined in accordance with the provisions of Section
         4.02 of this Plan.

2.17     "Investment Funds" means the funds designated by the Benefit Plans Committee as available investment
         options under the Plan, as the same may, from time to time, be changed by action of the Benefit Plans
         Committee.

2.18     "Matching Contributions" means the amount the Company contributes to the Savings and Investment Plan
         in accordance with Section 3.01(b) of the Savings and Investment Plan.

2.19     "Non-Benefits Employee" means any Employee who has signed an employment agreement, independent
         contractor agreement or other personal services contract with the


                                                     -2-


         Company stating that he or she is not eligible to participate in the Plan and any worker that the
         Employer treats as an independent contractor, during the period that the worker is so treated,
         regardless of whether such individual may be determined to be an Employee by administrative, judicial
         or other decision. A worker is treated as an independent contractor if payment for his services is
         memorialized on a Form 1099, and not on a Form W-2.

2.20     "Participant" means an Employee who meets the eligibility requirements of Article III and elects to
         participate in the Plan.

2.21     "Participating Employer" means each corporation that has adopted the Plan with the permission of the
         Benefit Plans Committee in accordance with the provisions of Article VIII.

2.22     "Plan" means The Phoenix Companies, Inc. Non-Qualified Deferred Compensation and Excess Investment
         Plan as is set forth in this document as it may be amended from time to time.

2.23     "Plan Administrator" means the Benefit Plans Committee or the person designated as such by the Benefit
         Plans Committee.

2.24     "Plan Year" means the calendar year.

2.25     "Savings and Investment Plan" means The Phoenix Companies, Inc. Savings and Investment Plan, a
         tax-qualified retirement plan maintained by the Company that includes a cash or deferred arrangement
         under Section 401(k) of the Code.

                                                  ARTICLE III
                                                 PARTICIPATION

3.01     Eligibility. With respect to any Plan Year, any Employee of the Company whose Contributions to the
         Savings and Investment Plan for such Plan Year are limited by the maximum amount of Earnings permitted
         to be taken into account under Code Section 401(a)(17) shall be eligible to participate in this Plan.

3.02     Commencement of Participation. Each eligible Employee shall become a Participant in the Plan as of the
         date he or she meets the above requirement and completes a Non-Qualified Deferred Compensation and
         Excess Investment Plan Election as described in Section 4.03.

3.03     Termination of Participation. An individual shall cease to be a Participant as of the date such
         individual ceases to meet all of the requirements of Section 3.01 above; provided, however, that
         benefits accrued by the individual as of such date shall not be reduced and shall be paid as provided
         herein.


                                                      -3-



                                                  ARTICLE IV
                                           EXCESS INVESTMENT BENEFIT

4.01     Excess Investment Benefit. A Participant's Excess Investment Benefit shall be equal to the sum of the
         Participant's Excess Investment Credits determined pursuant to Section 4.02 and the adjustments to
         Accounts determined pursuant to Section 4.04.

4.02     Excess Investment Credits. A Participant's Excess Investment Credits for any Plan Year shall consist of
         the sum of the following amounts:

         (a)      The percentage of the Participant's Excess Earnings for such Plan Year, from one percent (1%)
                  to sixty percent (60%), that the Participant has elected to defer as provided in Section
                  4.03(b); and

         (b)      For periods prior to July 1, 2003, for each Plan Year with respect to which a Participant has
                  a deferral election in effect under this Plan, a matching Company credit equal to, for
                  Employees of the Company or any Participating Employer other than Phoenix Investment
                  Partners, Ltd., an amount equal to fifty percent (50%) of their contributions which do not
                  exceed six percent (6%) of their Excess Earnings; and for Employees of Phoenix Investment
                  Partners, Ltd. an amount equal to one hundred percent (100%) of their contributions which do
                  not exceed three percent (3%) of their Excess Earnings.

         (c)      Effective July 1, 2003, for each Plan Year with respect to which a Participant has a deferral
                  election in effect under this Plan, a matching Company credit equal to one hundred percent
                  (100%) of such Participant's contributions, to the extent that such contributions do not
                  exceed three percent (3%) of Excess Earnings, plus fifty percent (50%) of such Participant's
                  contributions, to the extent that such contributions exceed three percent (3%) but do not
                  exceed five percent (5%) of Excess Earnings.

4.03     Excess Investment  Election.

         (a)      Each Participant may make an Excess Investment Plan Election to defer between one percent
                  (1%) and sixty percent (60%) of such Participant's Excess Earnings for a Plan Year.

         (b)      A Participant's Excess Investment Plan Election shall become effective not later than the
                  first day of the Plan Year immediately following the acceptance of the Excess Investment Plan
                  Election by the Plan Administrator or its duly authorized representative; provided, however,
                  that such Excess Investment Plan Election shall not have retroactive effect. The Excess
                  Investment Plan Election of a Participant who remains eligible to participate in the Plan
                  pursuant to Section 3.01 shall remain in effect until modified or terminated as provided in
                  Section 4.03(c).


                                                     -4-


         (c)      A Participant may modify or terminate an Excess Investment Plan Election effective as of the
                  first day of the Plan Year immediately following the Plan Administrator's (or its duly
                  authorized representative's) receipt of such modification or termination. Any modification or
                  termination of an Excess Investment Plan Election shall not have retroactive effect and shall
                  remain in force until revoked.

                                                   ARTICLE V

                                             DEFERRED COMPENSATION

5.01     Deferred Compensation Benefit. A Participant's Deferred Compensation Benefit shall be equal to any
         amounts deferred by the Participant and credited to a Deferred Compensation  Account established for
         such Participant.

5.02     Deferred Compensation Credit. A Participant's Deferred Compensation Credits for any Plan Year shall
         consist of an amount the Participant elected to defer between one percent (1%) and one-hundred percent
         (100%) of such Participant's Annual Incentive and/ or Long-Term Incentive Compensation for a Plan
         Year.

5.03     Deferred Compensation Election. Each year prior to the determination of any Incentive award and prior
         to the beginning of the calendar year in which such award and Compensation would otherwise be paid,
         the Participant may make an irrevocable election to defer between one percent (1%) and one-hundred
         percent (100%) of such Participant's Annual Incentive and/ or Long-Term Incentive Compensation for a
         Plan Year.

                                                  ARTICLE VI

                                  INVESTMENT OF AND PAYMENTS FROM THE ACCOUNTS

6.01     Investment Accounts. All Excess Investment Credits under Section 4.02 shall be made to the
         Participant's Excess Investment Account as of the end of each payroll period. All Deferred
         Compensation Credits under Section 5.02 shall be made to the Participant's Deferred Compensation
         Investment Account on the date that the Long-Term and/or Short-Term Incentive Compensation would have
         otherwise been received by the Participant. Such Excess Investment Credits or Deferred Compensation
         Credits shall be deemed to be invested in the Investment Fund or Funds designated by the Participant
         in such manner as may be specified by the Plan Administrator, or, if no such designation is made, in
         the Fidelity Retirement Money Market Portfolio. Each Participant's Investment Accounts will be
         adjusted on a daily basis by an amount equal to the amount of any adjustment that would have been made
         had the Participant's credits been allocated and invested as herein provided; reduced, however, at the
         Company's discretion, by an



                                                      -5-


         amount equal to the estimated income taxes, if any, payable by the Company on such adjustment, based
         on the Company's highest tax rate on its net taxable income for the Plan Year in which such adjustment
         is made. The Company reserves the right to reduce the interest or earnings on deferred compensation
         amounts for any federal or state taxes which it may incur as a result of interest or earnings on
         amounts held under this Plan.

6.02     Company Retains Control of Deemed Investments. The election to designate deemed investments, as
         described above, shall be subject to restrictions as to minimum and maximum amounts as announced from
         time to time by the Company. Both initial and subsequent investment allocations must be made in one
         percent (1%) increments. The Company shall have the right at any time to add new deemed investment
         options, cease to offer any or all of the deemed investment options, and alter or adjust the basis or
         method of calculating any interest or earnings for any of the investment options outlined above. The
         Company shall be under no obligation to actually make any investment as described above. Reference to
         any such investment shall be solely for the purpose of aiding the Company in measuring and meeting its
         liabilities under the terms of this Plan. In any event, if any investments are made, the Company shall
         be named the sole owner and shall have all of the rights and privileges conferred by any instrument
         evidencing such investments.

6.03     Value of Benefit. The value of any benefit under this Plan at any point in time shall be equal to the
         single-sum cash value of such benefit as of the date of determination.

6.04     Payment of Benefit. A Participant's Benefit shall be paid in a single lump sum or in installments over
         a period not less than three (3) years but not exceeding ten (10) years as soon as practicable
         following: the Participant's retirement, Disability, or other termination of service. A Participant
         shall make an irrevocable election as to the method of payment at the time the Participant makes an
         Election in accordance with Sections 4.03 and 5.03. A Participant who fails to make such an election
         shall be deemed to have elected a lump sum distribution of the Participant's Benefit. It is hereby
         provided that if the Participant elects to participate in the Phoenix OPT Plan (a separate
         non-qualified retirement plan maintained by The Phoenix Companies, Inc.), the Employer's obligation
         for payment of Benefits under this Plan shall be irrevocably cancelled and the Participant shall have
         no rights or claims for Benefits under this Plan.

6.05     Death Benefit. Upon the death of a Participant, the single-sum cash value of the Participant's
         Benefit, determined as of the date of distribution, shall be distributed to the Participant's
         Beneficiary in the manner specified in the Participant's Plan Election.

6.06     Hardship Withdrawals. A Participant may request a financial hardship withdrawal of all or a portion of
         the balance of his or her Excess Investment Account or Deferred Compensation Investment Account at any
         time. A hardship withdrawal shall only be available upon a determination by the Plan Administrator
         that the Participant has suffered a severe financial hardship resulting from a sudden and unexpected
         illness or accident of the Participant or other similar extraordinary and unforeseeable circumstances
         arising as


                                                      -6-



         a result of events beyond the control of the Participant. The purchase of a home or the payment of
         tuition or other education expenses do not constitute financial hardships under this Section 6.06.

                                                  ARTICLE VII
                                                    FUNDING

7.01     Funding. No special or separate fund shall be established by the Company and no segregation of assets
         shall be made to assure the payment of benefits under the Plan. No Participant shall have any right,
         title, or interest whatsoever in any specific asset of the Company. Nothing contained in this Plan and
         no action taken pursuant to its provisions shall create or be construed to create a trust of any kind,
         or a fiduciary relationship, between the Company and a Participant or any other person. To the extent
         that any person acquires a right to receive payments under this Plan, such right shall be no greater
         than the right of an unsecured general creditor of the Company.

                                                 ARTICLE VIII
                                              CLAIMS FOR BENEFITS

8.01     Claims Procedure. Claims for benefits under the Plan may be filed with the Plan Administrator on forms
         supplied by the Plan Administrator. Written or electronic notice of the disposition of a claim shall
         be furnished to the claimant within ninety (90) days after the application is filed (or within one
         hundred eighty (180) days if special circumstances require an extension of time for processing the
         claim and if written notice of such extension and circumstances are communicated to the claimant
         within the initial ninety (90) day period). In the event the claim is wholly or partially denied, the
         reasons for the denial shall be specifically set forth in the notice in language calculated to be
         understood by the claimant, pertinent provisions of the Plan on which the decision is based shall be
         cited, and, where appropriate, a description of any additional material or information necessary to
         perfect the claim, and an explanation of why such material or information is necessary, will be
         provided. In addition, the claimant shall be furnished with an explanation of the Plan's claims review
         procedure and the time limits applicable to such procedures, including a statement of the claimant's
         right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination
         on review. A claimant must request a review of a denied claim in accordance with Section 8.02 before
         the claimant is permitted to bring a civil action for benefits.

8.02     Claims Review Procedure. Any Employee, former Employee, or authorized representative or Beneficiary of
         either, who has been denied a benefit by a decision of the Plan Administrator pursuant to Section 8.01
         shall be entitled to request the Plan Administrator to give further consideration to his claim by
         filing with the Plan Administrator (on a form which may be obtained from the Plan Administrator) a
         request for review. Such request, together with a written statement of the reasons why the claimant
         believes his claim should be allowed, shall be filed with the Plan Administrator


                                                      -7-


         no later than sixty (60) days after receipt of the notification provided for in Section 8.01. If such
         request is so filed, the claimant or his representative may submit written comments, documents,
         records and other information relating to the claim to the Plan Administrator within sixty (60) days
         after receipt of the notification provided for in Section 8.01. The claim for review shall be given a
         full and fair review that takes into account all comments, documents, records and other information
         submitted that relates to the claim, without regard to whether such information was submitted or
         considered in the initial benefit determination. The Plan Administrator shall provide the claimant or
         his representative with written or electronic notice of the final decision as to the allowance of the
         claim within sixty (60) days of receipt of the request for review (or within one hundred twenty (120)
         days if special circumstances requires an extension of time for processing the request and if written
         notice of such extension and circumstances is given to the claimant or his representative within the
         initial sixty (60) day period). Such communication shall be written in a manner calculated to be
         understood by the claimant and shall include specific reasons for the decision, specific references to
         the pertinent Plan provisions on which the decision is based, a statement of the claimant or his
         representative's right to bring a civil action under Section 502(a) of ERISA and a statement that the
         claimant or his beneficiary is entitled to receive, upon request and free of charge, reasonable access
         to and copies of, all documents, records and other information relevant to the claim for benefits. A
         document is relevant to the claim for benefits if it was relied upon in making the determination, was
         submitted, considered or generated in the course of making the determination or demonstrates that
         benefit determinations are made in accordance with the Plan and that Plan provisions have been applied
         consistently with respect to similarly situated claimants.

8.03     Receipt and Release for Payments. Any payment to any Participant, or to such Participant's legal
         representative or Beneficiary, in accordance with the provisions of this Plan, shall be in full
         satisfaction of all claims hereunder against the Company. The Plan Administrator may require such
         Participant, legal representative, or Beneficiary, as a condition precedent to such payment, to
         execute a receipt and release therefor in such form as the Plan Administrator shall determine. If the
         Plan Administrator shall receive evidence satisfactory to the Plan Administrator that any payee under
         this Plan is a minor, or is legally, physically, or mentally incompetent to receive and to give valid
         release for any payment due him or her under this Plan, any such payment, or any part thereof, may,
         unless claim therefor shall have been made to the Plan Administrator by a duly appointed executor,
         administrator, guardian, committee, or other legal representative of such payee, be paid by the Plan
         Administrator to such payee's spouse, child, parent or other blood relative, or to any person, persons
         or institutions deemed by the Plan Administrator to have incurred expense for or on behalf of such
         payee, and any payment so made shall, to the extent thereof, be in full settlement of all liability in
         respect of such payee. If a dispute arises as to the proper recipient of any payments, the Plan
         Administrator in its sole discretion may withhold or cause to be withheld such payments until the
         dispute shall have been determined by a court of competent jurisdiction or shall have been settled by
         the parties concerned.


                                                      -8-


8.04     Lost or Unknown Participants. If any benefits payable under this Plan to a Participant, or to such
         Participant's legal representative or Beneficiary, cannot be paid by reason that such person cannot be
         located for three (3) years after reasonable efforts have been made to locate such person, the Plan
         Administrator may declare such benefits forfeited and return such benefits to the Company; provided,
         however, that in the event such Participant, or such Participant's legal representative or
         Beneficiary, is subsequently located or files a claim for benefits, such amount plus interest shall be
         reinstated to the Participant's Excess Investment Account or Participant's Deferred Compensation
         Investment Account for the benefit of such Participant, or such Participant's legal representative or
         Beneficiary, as the case may be.

                                                  ARTICLE IX
                                                MISCELLANEOUS

9.01     Non-Guarantee of Employment. Nothing contained in this Plan shall be construed as a contract of
         employment between the Company and any Participant or Employee, or as a right of any such Participant
         or Employee to be continued in the employment of the Company, or as a limitation on the right of the
         Company to deal with any Participant or Employee, as to their hiring, discharge, layoff, compensation,
         and all other conditions of employment in all respects as though this Plan did not exist. Furthermore,
         this Plan does not guarantee any Incentive award to the Participant or in any way obligate the Company
         to grant such Incentive award. Any amounts deferred hereunder shall be contingent on the actual
         granting of such Incentive award.

9.02     Rights Under Savings and Investment Plan. Nothing in this Plan shall be construed to limit, broaden,
         restrict, or grant any right to a Participant, Employee, surviving spouse or any Beneficiary thereof
         under the Savings and Investment Plan, nor to grant any additional rights to any such Participant,
         Employee, surviving spouse or Beneficiary thereof under the Savings and Investment Plan, nor in any
         way to limit, modify, repeal or otherwise affect the Company's right to amend or modify the Savings
         and Investment Plan.

9.03     Amendments/Termination. The Plan may be amended, modified or terminated at any time by the Company
         except that, without the consent of any Participant or Beneficiary, if applicable, no such amendment,
         modification or termination shall reduce or diminish the Benefit of any Participant accrued prior to
         the date of such amendment, modification or termination. Further, at its sole discretion, the Company
         may elect, upon termination of this Plan to distribute in one (1) lump sum to the Participant or any
         beneficiary, as the case may be, the value of the Benefit or the commuted value of any remaining
         installment payments.

9.04     Nonassignability. The benefits payable under this Plan shall not be subject to alienation, assignment,
         garnishment, execution or levy of any kind and any attempt to cause any benefits to be so subjected
         shall not be recognized, except to the extent required by


                                                      -9-


         applicable law; provided, however, that a Participant or Beneficiary may assign his or her entire
         interest in their Excess Investment Benefit or Deferred Compensation Benefit to the Participant's or
         Beneficiary's spouse or former spouse, as the case may be, under a divorce or separation instrument
         described in subparagraph (A) of Section 71(b)(2) of the Code.

9.05     Plan Administration. The Plan shall be operated and administered by the Plan Administrator or its duly
         authorized representative. The Plan Administrator shall have sole discretionary authority to determine
         all questions arising in connection with the Plan, to interpret the provisions of the Plan and to
         construe all of its terms, to adopt, amend and rescind rules and regulations for the administration of
         the Plan and to make all determination in connection with the Plan as may be necessary or advisable.
         All such actions of the Plan Administrator shall be conclusive and binding on all persons.

9.06     Successor Company. In the event of the dissolution, merger, consolidation or reorganization of the
         Company, provision may be made by which a successor to all or a major portion of the Company's
         property or business shall continue the Plan, and the successor shall have all of the power, duties
         and responsibilities of the Company under the Plan.

9.07     Governing Law. This Plan shall be construed and enforced in accordance with, and governed by, the laws
         of the State of Connecticut, without giving effect to the conflict of law provisions thereof.

9.08     Tax Withholding. The Company may withhold from a payment any federal, state or local taxes required by
         law to be withheld with respect to such payments and such sums as the Company may reasonably estimate
         are necessary to cover taxes for which the Company may be liable and which may be assessed with regard
         to such payment.

9.09     Illegality of Particular Provision. The illegality of any particular provision of this document shall
         not affect the other provisions and the document shall be construed in all respects as if such invalid
         provision were omitted.

                                                   ARTICLE X
                                            PARTICIPATING EMPLOYERS

10.01    Adoption of Plan by Other Employers. With the consent of the Benefit Plans Committee, any other
         affiliated corporation may adopt the Plan and all of the provisions hereof and participate herein as a
         Participating Employer by a properly executed document evidencing said intent and will of such
         Participating Employer.

10.02    Requirements of Participating Employers.

         (a)      Benefits payable under the Plan to employees of the Participating Employer are funded through
                  the Participating Employer's general assets. The Participating Employer agrees to pay and
                  assumes all liability with respect to all benefits


                                                      -10-


                  payable under the Plan to past, present and future employees of the Participating Employer,
                  their spouses and other dependents and beneficiaries in accordance with the terms of the
                  Plan. Notwithstanding the foregoing, Phoenix Life Insurance Company and not Phoenix Equity
                  Planning Corporation nor Phoenix Investment Counsel, Inc. shall pay and assume liability for
                  benefits payable under the Plan to Employees of Phoenix Equity Planning Corporation and
                  Phoenix Investment Counsel, Inc. with respect to service completed before January 1, 1996.

         (b)      The Plan Administrator shall keep separate books and records concerning the contributions and
                  benefits payable under the Plan with respect to the Participating Employer and the Employees
                  of the Participating Employer.

         (c)      Each Participating Employer shall pay to the Company its proportionate share of any
                  administrative expenses of the Plan which are to be paid by such employer.

10.03    Designation of Agent. Each Participating Employer shall be deemed to have designated irrevocably the
         Benefit Plans Committee and the Plan Administrator as its agents.

10.04    Plan Amendment.

         (a)      Subject to the provisions of paragraph (b) hereof, each Participating Employer hereby
                  delegates to the Company the right at any time to amend the Plan in accordance with the terms
                  of the Plan, provided that any such amendment could not affect the Participating Employer's
                  share of the cost of the Plan. If an amendment could affect the Participating Employer's
                  share of the cost of the Plan, then such amendment shall not be effective with respect to the
                  Participating Employer until approved by the Participating Employer. Any such amendment shall
                  be adopted by the Participating Employer's Benefit Plans Committee unless such amendment
                  could significantly affect the Participating Employer's share of the cost of the Plan, as
                  determined by the Participating Employer's Benefit Plans Committee, in which case such
                  amendment shall be adopted by the Participating Employer's Board of Directors in accordance
                  with the Participating Employer's Articles of Incorporation, Bylaws and applicable law and
                  shall become effective as provided therein upon its execution.

         (b)      No amendment to the Plan shall be effective with respect to a Participating Employer until
                  forty-five (45) days after a copy of the amendment shall have been delivered to the
                  Participating Employer, unless the Participating Employer shall have waived its right to
                  receive such advance copy of the amendment.

10.05    Withdrawal of a Participating Employer. A Participating Employer may terminate its participation in
         the Plan by giving the Benefit Plans Committee prior written notice specifying a termination date
         which shall be the last day of a month at least thirty (30) days subsequent to the date such notice is
         delivered to the Benefit Plans Committee,


                                                     -11-



         unless the Benefit Plans Committee shall have waived its right to such notice. The Benefit Plans
         Committee may terminate a Participating Employer's participation in the Plan as of any termination
         date by giving the Participating Employer prior written notice specifying a termination date which
         shall be the last day of a month at least thirty (30) days subsequent to the date such notice is
         delivered to the Participating Employer, unless the Participating Employer shall have waived its right
         to such notice.

10.06    Administrator's Authority. The Plan Administrator shall have all of the duties and responsibilities
         authorized by the Plan and shall have the authority to make any and all rules, regulations and
         decisions necessary or appropriate to effectuate the terms of the Plan, which shall be binding upon
         each Participating Employer and all Participants.


                                                      -12-

EX-99.10.14

                                                                                                Exhibit 10.14

     DATE:

     TO:

     FROM:

     RE:      Long Term Incentive Plan

     2004 - 2006 Long Term Incentive Plan
     Enclosed you will find the 2004 - 2006 Long Term Incentive Plan. While the plan document provides specific
     details, here are some of the highlights:
         o    Plan participants will receive a contingent grant of PNX restricted stock units (RSUs) subject to
              the company achieving its performance goals
         o    The contingent RSU grant is equal to a participant's long-term incentive target based upon the
              share price of PNX stock on January 2, 2004 ($12.24). Each RSU is equivalent to one share of PNX
              common stock.
         o    The value of the actual award will vary depending upon the achievement of a company performance
              goal (average Return on Equity (ROE)) and the PNX stock price at the end of the three-year cycle.
         o    The company performance target is a three-year average ROE of ___%, with a minimum threshold of
              ___% and a maximum of ___%.
         o    Participants will be required to retain a fixed percentage of the award, based on their share
              ownership and retention guidelines.

     Please review the attached document, which details the plan design and performance criteria. The last page
     provides information about your short-term and long-term targets, shows examples of the range of possible
     value of your long-term award, and provides a reminder of your share ownership and retention guidelines.

     This is a period of extraordinary challenge and opportunity for The Phoenix Companies. This plan provides
     you with an opportunity to be recognized for your efforts in achieving our long-term goals and to share in
     the Company's success when we achieve them.

     If you have any questions, please call me at ext. ____ or ___________ at ext. ____.

EX-99.10.15

                                                                                                   EXHIBIT 10.15

                                          THE PHOENIX COMPANIES, INC.

                                       EXECUTIVE SEVERANCE ALLOWANCE PLAN

                                        Effective as of January 1, 2005

                                              ARTICLE 1 - PURPOSE

         The Phoenix Companies, Inc. ("Sponsor") adopted, effective as of January 1, 2005, this Executive
Severance Allowance Plan (the "Plan") to provide for benefits to certain executives of Phoenix Life Insurance
Company ("Phoenix") and other affiliates of Sponsor (each an "Affiliated Employer") who meet the eligibility
requirements set forth in the Plan when their employment is involuntarily terminated by Phoenix or an
Affiliated Employer (collectively hereinafter referred to as the "Employer").

As of January 1, 2005, this Plan supersedes and replaces all prior severance policies, plans, or practices
maintained by the Employer with respect to the "Executives" of Employer, as defined hereinbelow.

                                            ARTICLE 2 - DEFINITIONS

For purposes of this Plan, the following terms shall have the meanings set forth.

2.01     Affiliate: Affiliate shall mean, as to any specified person, each other person directly or indirectly
         controlling, controlled by or under direct or indirect common control with that specified person. For
         the purposes of this definition, "control", when used with respect to any specified person means the
         power to direct the management and policies of such person, directly or indirectly, whether through
         the ownership of voting securities, or by contract or otherwise, and their terms "controlling" and
         "controlled" have meanings correlative to the foregoing. Notwithstanding the foregoing, any investment
         company registered under the Investment Company Act of 1940, as amended, shall not be deemed an
         Affiliate of any specified person.

2.02     Annual Incentive Award: The compensation payable under the Performance Incentive Plan, the Annual
         Incentive Plan, the Investment Incentive Plan, and/or any successor incentive plan or such other
         incentive compensation arrangements as the Employer may designate from time to time as approved by the
         Committee.

2.03     Base Salary: The Executive's annual salary, determined as of the last day of the month immediately
         preceding the Executive's Separation Date. The following items shall not be included in determining
         Base Salary: overtime pay; distributions from a plan of deferred compensation; commissions; bonuses
         and incentive compensation. In determining this annual salary, however, the following items shall be
         included: any amount contributed as deferred compensation to a cash or deferred arrangement






2.04     maintained by the Employer pursuant to Section 401(k) of the Code; any salary reduction contributions
         made on behalf of the Executive to a plan maintained by the Employer under Section 125 of the Code or
         Section 132(f)(4) of the Code, and any amounts deferred by the Executive under a nonqualified plan of
         deferred compensation.

2.05     Cause: For purposes of this Plan, "Cause" means any conduct by the Executive which is detrimental to
         the interests of the Company or any of its Affiliates, including but not limited to: (i) the
         Executive's conviction or plea of nolo contendere to a felony or to a lesser crime involving fraud or
         moral turpitude; (ii) an act of misconduct (including, without limitation, a violation of the
         Sponsor's Code of Conduct or any code of ethics of any of its Affiliates) on Executive's part with
         regard to the Company or its Affiliates; (iii) unsatisfactory performance; or (iv) the Executive's
         failure to attempt or refusal to perform legal directives of the Board or executive officers of the
         Company. "Cause" is to be determined in the sole discretion of Employer.

2.06     COBRA:  The Consolidated Omnibus Budget Reconciliation Act of 1986, as amended.

2.07     Code:  The Internal Revenue Code of 1986, as amended

2.08     Committee:  The Compensation Committee of The Phoenix Companies, Inc. Board of Directors.

2.09     Effective Date: January 1, 2005.

2.10     Employee: Any common law employee of the Employer who is actively at work at the time of termination
         and is a regular (versus temporary) full-time employee working at least 40 hours per week or part-time
         employee working at least 19 1/2 hours per week.

2.11     Executive: An Employee of the Employer who is a Senior Vice President or above, other than the Chief
         Executive Officer (CEO), and any other Employee the CEO determines to be integral to the formulation
         or execution of the business strategy of the Employer.

2.12     Employer: Phoenix Life Insurance Company and any other Affiliated Employer that has adopted this Plan
         with the approval of the Plan Administrator.

2.13     ERISA:  The Employee Retirement Income Security Act of 1974, as amended.

2.14     Key Employee:  Any person who meets the definition of a key employee under Section 416(i) of the Code.

2.15     Plan:  The Phoenix Companies, Inc. Executive Severance Allowance Plan, as amended from time to time.

2.16     Plan Administrator: The Benefit Plans Committee of Phoenix or the person designated as such by the
         Benefit Plans Committee.

2.17     Plan Year: The calendar year.



2.18     Participating Employer: Any Affiliate of Sponsor which has been designated to participate in the Plan
         by action of the Plan Administrator.

2.19     Separation Date: The last day of an Executive's active service with the Employer.

2.20     Severance Agreement and Release: An agreement to be signed by the Executive in a form acceptable to
         the Employer, containing a general release and restrictive covenants, including but not limited to, a
         two-year non-solicitation of clients or employees provision, a covenant not to sue, confidentiality
         and cooperation provisions, as well as any other clauses the Employer may require.

2.21     Severance Amount: The benefit payable under the provisions of Section 3.03.


                                    ARTICLE 3 - SEVERANCE ALLOWANCE BENEFIT

3.01     Qualification: An Executive whose employment is involuntarily terminated by the Employer on or after
         the Effective Date for any reason, including but not limited to: reduction in force, facility closing,
         reorganization, consolidation or elimination of position, shall be qualified for benefits under this
         Plan, unless the termination is due to a Disqualifying Event identified in 3.02.

3.02     Disqualifying Events: An Executive who might otherwise be qualified for benefits under this Plan shall
         be disqualified for such benefits by the following events and circumstances:

         (a)   The Executive fails to continue in the employ of the Employer, satisfactorily performing the
         Executive's assigned duties, until the date actually set for the Executive's termination by the
         Employer.

         (b)   The Executive works for a division, sub-division, unit, subsidiary or other identifiable entity
         that is sold or the assets of which are transferred to an owner other than the Employer, if the
         Executive is offered employment by the new owner that is substantially comparable to the employment
         engaged in by the Executive immediately prior to the sale or transfer.

         (c)   The Executive is terminated for "Cause".

         (d)   The Executive's employment is terminated by reason of early retirement, normal retirement,
         resignation, death, deferred retirement, or during or at the conclusion of a leave of absence taken or
         granted on account of any reason, including permanent or temporary disability.

         (e)   The Executive refuses to accept a transfer to an assigned job or location, provided the new
         position is within two pay grades of the current position held by the Executive.



         (f)   The Plan Administrator determines that under the facts and circumstances relating to the
         Executive's termination, or because of the Executive's conduct subsequent to termination, it would be
         inappropriate to commence or continue severance payments.

         (g)   The Executive receives or is entitled to receive from the Employer benefits under any severance
         plan, any severance agreement, or any agreement providing for the payment of severance benefits,
         including any Change in Control Agreement between the Employer and the Executive, other than this
         Plan, on account of the Executive's termination of employment by the Employer.

3.03     Severance Benefits: With respect to any Executive whose employment is terminated for a reason
         identified in Section 3.01, the following Severance Amount shall be payable, subject to the
         disqualification provisions of Section 3.02 and Section 3.09, and not any other benefit, except for
         certain employee welfare benefits as provided in Section 4.05:

                  The Severance Amount will be the sum of a plus b, where:

                        a   =    Base Salary Amount.  A cash amount equal to the Executive's Base Salary.


                        b   =    Annual Incentive Award Amount.  A cash amount equal to a pro-rata portion of
                                 the Executive's actually earned Annual Incentive Award for the fiscal year in
                                 which the Executive's Separation Date occurs.  The pro-rata portion of such
                                 Annual Incentive Award shall be determined by multiplying the amount actually
                                 earned times a fraction, the numerator of which is the number of days during
                                 the performance period applicable to such award prior to the Separation Date
                                 and the denominator of which is the number of days in the performance period
                                 applicable to such award.

3.04     Time and Form of Payment: Except as otherwise provided herein or in Article 5, the Executive will
         receive payment of the Base Salary Amount payable under this Plan as a lump sum payment payable on the
         first business day following sixth months after the Separation Date. Any Annual Incentive Award Amount
         for the fiscal year in which the Executive's Separation Date occurs will be payable after the Annual
         Incentive Award Amount for that fiscal year is calculated and approved by the Committee but, in no
         event earlier than six months after the Separation Date.

3.05     Death: If an Executive terminates employment and dies before having received the entire amount of
         benefits to which the Executive is entitled under this Plan, the balance of such benefits will be paid
         to the Executive's estate.

3.06     Reemployment by the Employer: In the event that an Executive becomes reemployed by the Employer after
         having received any benefit pursuant to this Plan or any predecessor or successor to this Plan, such
         Executive will be required to reimburse the Employer for any benefits received before the Executive's
         reemployment.



3.07     Integration With Other Benefits: To the extent that a federal, state or local law may require the
         Employer to make a payment to an Executive because of that Executive's involuntary termination, the
         Severance Amount payable under this Plan shall be applied towards any such payment and not paid in
         addition to such required payment. Nothing in this Plan shall be used to extend or modify benefits
         under this Plan because of payments under any state unemployment insurance laws.

3.08     Withholding: The Employer shall have the right to take such action as it deems necessary or
         appropriate to satisfy any requirement under federal, state or other law to withhold or to make
         deductions from any benefit payable under this Plan.

3.09     Pre-conditions for Receipt of Benefits: The payment of any benefit under this Plan is conditioned upon
         the Executive complying with all of the following:

         (a) refraining from directly or indirectly interfering in any manner with the operations, management
         or administration of any Employer office, agent or employee and refraining from making any disparaging
         remarks concerning the Employer, its representatives, agents and employees;

         (b) refraining from encouraging, soliciting or suggesting to any and all employees, agents,
         representatives and/or clients of the Employer that they terminate or alter their current relationship
         with the Employer;

         (c) returning all Employer property provided or developed during the course of employment including,
         but not limited to: computers, software, cell phones, files, records, identification card, credit
         cards and Employer manuals;

         (d) complying with a continuing obligation to maintain the confidentiality of proprietary information
         subsequent to termination of employment;

         (e) executing a Severance Agreement and Release.

         Upon the failure of the Executive to comply with any of the conditions set forth above and in this
         Plan, all payments hereunder shall immediately cease and the Executive shall immediately reimburse the
         Employer for all payments previously made hereunder.

3.10     Outplacement Services: An Executive entitled to payment of a Severance Amount as provided in Section
         3.03 of this Plan shall be entitled to receive and the Employer shall provide outplacement services,
         with a firm chosen by the Employer, at a level commensurate with the Executive's position for a
         one-year period beginning on the Separation Date.

3.11     Continuation of Benefits. The Executive (and, to the extent applicable, the Executive's dependents)
         shall be entitled to continue participation in all of the employee plans providing medical and dental
         benefits that the Executive participated in prior to the Separation Date (collectively, the
         "Continuing Benefit Plans") in accordance with COBRA; provided, however, that the Employer shall




         pay to the Executive on a monthly basis during such COBRA continuation period an amount equal on an
         after-tax basis to the total cost of such coverage. Notwithstanding the foregoing, the first such
         payment shall not be made until the first business day following sixth months after the Separation
         Date, except that the first such payment shall equal the Executive's after-tax cost for such COBRA
         continuation coverage during the first six months.

                                           ARTICLE 4 - ADMINISTRATION

4.01     The Plan Administrator: The Plan Administrator shall have the sole discretionary authority to
         interpret the Plan and all questions thereunder, including, without limitation, all questions relating
         to eligibility to participate in and receive benefits under the Plan. All such actions of the Plan
         Administrator shall be conclusive and binding on all persons.

4.02     Notification to Executives: The Plan Administrator shall notify an Executive when and if such
         Executive becomes eligible for benefits under this Plan.

4.03     Claims by Executives: Claims for benefits under the Plan may be filed with the Plan Administrator.
         Written notice of the disposition of a claim shall be furnished to the claimant within ninety (90)
         days after the application is filed. In the event the claim is denied, the reasons for the denial
         shall be specifically set forth in the notice in language reasonably calculated to be understood by
         the claimant, pertinent provisions of the Plan shall be cited, and, where appropriate, an explanation
         as to how the claimant can perfect the claim will be provided. In addition, the claimant shall be
         furnished with an explanation of the Plan's claims review procedures and the time limits applicable to
         such procedures, including a statement that the claimant has a right to bring a civil action under
         Section 502(a) of ERISA following an adverse benefit determination on review. If notice of the denial
         of a claim is not furnished to an Executive in accordance with this section within a reasonable period
         of time, such Executive's claim shall be deemed denied. The Executive will then be permitted to
         proceed to the review stage described in Section 4.04.

4.04     Claims Review Procedure: Any Executive, former Executive, or authorized representative or beneficiary
         of either, who has been denied a benefit by a decision of the Plan Administrator pursuant to Section
         4.03 shall be entitled to request the Plan Administrator to give further consideration to his claim by
         filing with the Plan Administrator a written request for review. Such request, together with a written
         statement of the reasons why the claimant believes his claim should be allowed, shall be filed with
         the Plan Administrator no later than 60 days after receipt of the written notification provided for in
         Section 4.03. The claimant may submit written comments, documents, records and other information
         relating to the claim to the Plan Administrator. The claim for review shall be given a full and fair
         review that takes into account all comments, documents, records and other information submitted that
         relates to the claim, without regard to whether such information was submitted or considered in the
         initial benefit determination. The Plan Administrator shall provide the claimant with written or
         electronic notice of the decision on review within 60 days after the request for review is received by
         the Plan Administrator (or within 120 days if special circumstances require an extension of time for
         processing the claim and if notice of such extension and



         circumstances is provided to the claimant within the initial 60-day period). Such communication shall
         be written in a manner calculated to be understood by the claimant and shall include specific reasons
         for the decision, specific references to the pertinent Plan provisions on which the decision is based,
         a statement that the claimant has a right to bring a civil action under Section 502(a) of ERISA and
         that the claimant is entitled to receive, upon request and free of charge, reasonable access to and
         copies of, all documents, records and other information relevant to the claim for benefits. A document
         is relevant to the claim for benefits if it was relied upon in making the determination, was
         submitted, considered or generated in the course of making the determination or demonstrates that
         benefit determinations are made in accordance with the Plan and that Plan provisions have been applied
         consistently with respect to similarly situated claimants.

                                     ARTICLE 5 - AMENDMENT AND TERMINATION

         The Board of Directors of Phoenix has delegated to the Benefit Plans Committee the right at any time,
whether in an individual case or more generally, to amend this Plan from time to time without advance notice
and to terminate this Plan at any time. No consent of any Executive is required to terminate, modify, amend or
change the Plan generally or in an individual case. Any such amendment or termination of this Plan generally
shall be accomplished by resolution of the Benefit Plans Committee adopted at a meeting duly called or by
unanimous written consent in accordance with Phoenix's Articles of Incorporation, Bylaws, and applicable law.
Any amendment or termination of this Plan on an individual basis shall be accomplished by the written action of
the Plan Administrator. Notwithstanding anything in this Plan to the contrary, the Benefit Plans Committee may
from time to time amend this Plan as the Benefit Plans Committee deems necessary or desirable to comply with
the requirements of Section 409A of the Code and the regulations and pronouncements thereunder, regardless of
whether any such amendment would cause a reduction or cessation of a benefit accrued prior to the adoption of
such amendment.

                             ARTICLE 6 - SEVERANCE PAY PLAN LIMITATIONS UNDER ERISA

         The Employer intends that this Plan constitute a "severance pay plan" under Labor ERISA Regulation 29
CFR Section 2510.3-2(b) and any ambiguities in this Plan shall be construed to effect that intent. As a
severance pay plan, notwithstanding any other provision of this Plan: payments hereunder shall not be
contingent directly or indirectly, upon the retirement of any Executive or offset by any retirement benefit
payable; the total amount of severance payments made and the value of other benefits provided under this Plan
to any Executive shall not exceed twice the Executive's annual compensation during the year immediately
preceding the termination of such Executive's service; and all payments to an Employee under this Plan shall be
paid within 24 months after the termination of the Executive's service.

                                           ARTICLE 7 - MISCELLANEOUS

7.01     Right to Terminate Employment: The fact that a former Executive has failed to qualify for a benefit
         under this Plan shall not rescind or otherwise affect in any manner whatsoever the Executive's
         termination of employment from the Employer, and such failure to qualify for a benefit shall not
         establish any right of any kind or description



         whatsoever (a) to a continuation or to a reinstatement of employment with the Employer or (b) to
         receive any payment from the Employer in lieu of such benefit.

7.02     Source of Benefits: All benefits paid to a terminated Executive under this Plan shall be paid from the
         general assets of the Employer, and the status of the claim of a person to any benefit shall be the
         same as the status of a claim against the Employer by any general unsecured creditor. No person shall
         look to, or have any claim against, any officer, director, employee or agent of the Employer in his
         individual capacity for the payment of any benefits under this Plan.

7.03     No Assignment; Binding Effect: No interest of any Executive eligible to receive benefits under this
         Plan shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or
         other alienation or encumbrance of any kind; nor may such interest or right to receive a benefit be
         taken, either voluntarily or involuntarily, for the satisfaction of the debts of, or other obligations
         or claims against, such person, including claims for alimony, support, separate maintenance and claims
         in bankruptcy proceedings. The provisions of this Plan shall be binding on each Executive (and on each
         person who claims a benefit under such person) and on the Employer, their successors and assigns.

7.04     Indebtedness: Indebtedness or obligations of the Executive to the Employer existing at the time of
         termination or arising during the one year period beginning on the Separation Date shall be set off
         against any benefit payable under this Plan.

7.05     Construction: This Plan shall be construed in accordance with the law of the State of Connecticut to
         the extent not preempted by federal laws. Headings and subheadings have been added only for
         convenience of reference and have no substantive effect whatsoever. All references to sections shall
         mean sections of this Plan.

7.06     Usage: Whenever applicable, the singular shall include the plural, the masculine shall include the
         feminine and vice versa when used in this Plan.

        IN WITNESS WHEREOF, the Sponsor has caused this Plan to be signed by its duly appointed officer this
4th day of February, 2005.

                                          The Phoenix Companies, Inc.

                                          By: /s/ Bonnie J. Malley

EX-99.10.26

                                                                                                      Exhibit 10.26

                                                                                                      Execution






===============================================================================================================


                                               U.S. $150,000,000

                                                CREDIT AGREEMENT

                                         Dated as of November 22, 2004

                                                    Between

                                          THE PHOENIX COMPANIES, INC.

                                         PHOENIX LIFE INSURANCE COMPANY

                                       PHOENIX INVESTMENT PARTNERS, LTD.

                                    THE FINANCIAL INSTITUTIONS PARTY HERETO,

                          WACHOVIA BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT

                                   THE BANK OF NEW YORK, AS SYNDICATION AGENT

                            PNC BANK, NATIONAL ASSOCIATION, JPMORGAN CHASE BANK AND
                            HARRIS NESBITT FINANCING, INC., AS DOCUMENTATION AGENTS




                                 WACHOVIA CAPITAL MARKETS, LLC AS LEAD ARRANGER



===============================================================================================================









                                               TABLE OF CONTENTS

                                                                                                           Page

                                                   ARTICLE I

                                                  DEFINITIONS

Section 1.1.      Certain Defined Terms.......................................................................1
Section 1.2.      Other Interpretive Provisions..............................................................15
Section 1.3.      Accounting Principles......................................................................16

                                                   ARTICLE II

                                                  THE CREDITS

Section 2.1.      Amounts and Terms of Commitments...........................................................16
Section 2.2.      Loan Accounts; Notes.......................................................................16
Section 2.3.      Procedure for Borrowing....................................................................17
Section 2.4.      Conversion and Continuation Elections......................................................17
Section 2.5.      Voluntary Termination or Reduction of Commitments..........................................18
Section 2.6.      Optional and Mandatory Prepayments.........................................................19
Section 2.7.      Repayment..................................................................................21
Section 2.8.      Interest...................................................................................22
Section 2.9.      Fees.......................................................................................23
Section 2.10.     Computation of Fees and Interest...........................................................23
Section 2.11.     Payments...................................................................................23
Section 2.12.     Payments by the Lenders to the Administrative Agent........................................24
Section 2.13.     Sharing of Payments, Etc...................................................................25
Section 2.14.     Commitment Increase........................................................................25

                                                  ARTICLE III

                                     TAXES, YIELD PROTECTION AND ILLEGALITY

Section 3.1.      Taxes......................................................................................26
Section 3.2.      Illegality.................................................................................27
Section 3.3.      Increased Costs and Reduction of Return....................................................28
Section 3.4.      Funding Losses.............................................................................28
Section 3.5.      Inability to Determine Rates...............................................................29
Section 3.6.      Certificates of Lenders....................................................................29
Section 3.7.      Survival...................................................................................29


                                                      ii


                                                   ARTICLE IV

                                              CONDITIONS PRECEDENT

Section 4.1.      Conditions of Initial Loans................................................................29
Section 4.2.      Conditions to All Borrowings...............................................................31

                                                   ARTICLE V

                                         REPRESENTATIONS AND WARRANTIES

Section 5.1.      Corporate Existence and Power..............................................................32
Section 5.2.      Corporate Authorization; No Contravention..................................................32
Section 5.3.      Governmental Authorization.................................................................33
Section 5.4.      Binding Effect.............................................................................33
Section 5.5.      Litigation.................................................................................33
Section 5.6.      Contractual Obligation.....................................................................33
Section 5.7.      ERISA Compliance...........................................................................33
Section 5.8.      Use of Proceeds; Margin Regulations........................................................34
Section 5.9.      Title to Properties........................................................................34
Section 5.10.     Taxes......................................................................................34
Section 5.11.     Financial Condition........................................................................34
Section 5.12.     Environmental Matters......................................................................35
Section 5.13.     Regulated Entities.........................................................................35
Section 5.14.     No Burdensome Restrictions.................................................................35
Section 5.15.     Copyrights, Patents, Trademarks and Licenses, Etc..........................................35
Section 5.16.     Subsidiaries...............................................................................36
Section 5.17.     Insurance..................................................................................36
Section 5.18.     Full Disclosure............................................................................36
Section 5.19.     Compliance.................................................................................36
Section 5.20.     OFAC; PATRIOT Act..........................................................................36

                                                   ARTICLE VI

                                             AFFIRMATIVE COVENANTS

Section 6.1.      Financial Statements.......................................................................37
Section 6.2.      Certificates; Other Information............................................................38
Section 6.3.      Notices....................................................................................38
Section 6.4.      Preservation of Corporate Existence, Etc...................................................40
Section 6.5.      Maintenance of Property....................................................................40
Section 6.6.      Insurance..................................................................................40
Section 6.7.      Payment of Obligations.....................................................................40
Section 6.8.      Compliance with Laws.......................................................................41
Section 6.9.      Compliance with ERISA......................................................................41
Section 6.10.     Inspection of Property and Books and Records...............................................41
Section 6.11.     Environmental Laws.........................................................................41
Section 6.12.     Use of Proceeds............................................................................41

                                                      iii


Section 6.13.     PATRIOT Act Compliance.....................................................................41

                                                  ARTICLE VII

                                               NEGATIVE COVENANTS

Section 7.1.      Limitation on Liens........................................................................42
Section 7.2.      Mergers, Consolidations and Sales of Assets................................................43
Section 7.3.      Loans and Investments......................................................................44
Section 7.4.      Limitation on Indebtedness.................................................................44
Section 7.5.      Transactions with Affiliates...............................................................45
Section 7.6.      Use of Proceeds............................................................................45
Section 7.7.      Contingent Obligations.....................................................................45
Section 7.8.      Joint Ventures.............................................................................45
Section 7.9.      Restricted Payments........................................................................46
Section 7.10.     ERISA......................................................................................46
Section 7.11.     Change in Business.........................................................................46
Section 7.12.     Accounting Changes.........................................................................46
Section 7.13.     Pari Passu.................................................................................46
Section 7.14.     Phoenix....................................................................................46

                                                  ARTICLE VIII

                                          PARENT'S FINANCIAL COVENANTS

Section 8.1.      Total Debt to Capitalization Ratio.........................................................46
Section 8.2.      Shareholders' Equity.......................................................................46

                                                   ARTICLE IX

                                            PLIC FINANCIAL COVENANTS

Section 9.1.      Risk Based Capital.........................................................................47
Section 9.2.      A.M. Best Rating...........................................................................47

                                                   ARTICLE X

                                                  GUARANTIES

Section 10.1.     Guaranty...................................................................................47
Section 10.2.     Guaranty Unconditional.....................................................................47
Section 10.3.     Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances................48
Section 10.4.     Waiver by the Parent.......................................................................48
Section 10.5.     Subrogation................................................................................48
Section 10.6.     Stay of Acceleration.......................................................................48


                                                      iv


                                                   ARTICLE XI

                                               EVENTS OF DEFAULT

Section 11.1.     Event of Default...........................................................................49
Section 11.2.     Remedies...................................................................................51
Section 11.3.     Rights Not Exclusive.......................................................................51

                                                  ARTICLE XII

                                            THE ADMINISTRATIVE AGENT

Section 12.1.     Appointment................................................................................51
Section 12.2.     Delegation of Duties.......................................................................52
Section 12.3.     Exculpatory Provisions.....................................................................52
Section 12.4.     Reliance by Administrative Agent...........................................................52
Section 12.5.     Notice of Default..........................................................................53
Section 12.6.     Non-Reliance on Administrative Agent and Other Lenders.....................................53
Section 12.7.     Indemnification............................................................................54
Section 12.8.     Administrative Agent in Its Individual Capacity............................................54
Section 12.9.     Successor Administrative Agent.............................................................55
Section 12.10.    Syndication Agent and Documentation Agent..................................................55

                                                  ARTICLE XIII

                                                 MISCELLANEOUS

Section 13.1.     Amendments and Waivers.....................................................................55
Section 13.2.     Notices....................................................................................56
Section 13.3.     No Waiver; Cumulative Remedies.............................................................57
Section 13.4.     Costs and Expenses.........................................................................57
Section 13.5.     Indemnity..................................................................................58
Section 13.6.     Payments Set Aside.........................................................................58
Section 13.7.     Successors and Assigns.....................................................................59
Section 13.8.     Assignments, Participations, etc...........................................................59
Section 13.9.     Confidentiality............................................................................61
Section 13.10.    Set-off....................................................................................62
Section 13.11.    Automatic Debits of Fees...................................................................63
Section 13.12.    Notification of Addresses, Lending Offices, Etc............................................63
Section 13.13.    Counterparts...............................................................................63
Section 13.14.    Severability...............................................................................63
Section 13.15.    No Third Parties Benefits..................................................................63
Section 13.16.    Governing Law and Jurisdiction.............................................................64
Section 13.17.    Waiver of Jury Trial; Consequential Damages................................................64
Section 13.18.    Entire Agreement...........................................................................65
Section 13.19.    PATRIOT Act Notice.........................................................................65


                                                       v


SCHEDULES

Schedule 2.1(a)   Commitments
Schedule 5.7(c)   Unfunded Pension Liability
Schedule 5.16     Primary Subsidiaries
Schedule 7.1      Permitted Liens
Schedule 7.7(a)   Contingent Obligations
Schedule 7.7(b)   Certain Undertakings


EXHIBITS

Exhibit A   Form of Notice of Borrowing
Exhibit B   Form of Notice of Conversion/Continuation
Exhibit C   Form of Compliance Certificate
Exhibit D   Form of Note
Exhibit E   Form of Assignment and Acceptance







                                                      vi


                                                CREDIT AGREEMENT

     THIS CREDIT AGREEMENT, dated as of the 22nd day of November, 2004, is made among THE PHOENIX COMPANIES,
INC., a Delaware corporation (the "Parent"), PHOENIX LIFE INSURANCE COMPANY, a New York stock insurance company
("PLIC") and PHOENIX INVESTMENT PARTNERS, LTD., a Delaware corporation ("PXP"), the Lenders (as hereinafter
defined), WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent for the Lenders, THE BANK OF NEW YORK,
as Syndication Agent for the Lenders, and PNC BANK NATIONAL ASSOCIATION, JPMORGAN CHASE BANK and HARRIS NESBITT
FINANCING, INC, as Documentation Agents for the Lenders.

                                              BACKGROUND STATEMENT

   The Borrower has requested that the Lenders make available to the Borrower a revolving credit facility in
the aggregate principal amount of $150,000,000. The Borrower will use the proceeds of the facility as provided
in Section 6.12. The Lenders are willing to make available to the Borrower the credit facility described herein
subject to and on the terms and conditions set forth in this Agreement

                                                   AGREEMENT

   NOW, THEREFORE, in consideration of the mutual provisions, covenants and agreements herein contained, the
parties hereto hereby agree as follows:

                                                   ARTICLE I

                                                  DEFINITIONS

     Section 1.1.  Certain Defined Terms.  The following terms have the following meanings:


     "Acquisition" means any transaction or series of related transactions for the purpose of or resulting,
directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any
business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership
interests or equity of any Person, or otherwise causing any Person to become a Subsidiary of the Parent, or (c)
a merger or consolidation or any other combination with another Person (other than a Person that is a
Subsidiary of the survivor) provided that the Parent or a Subsidiary thereof is the surviving entity.

     "Administrative Agent" means Wachovia, in its capacity as administrative agent for the Lenders hereunder,
and any successor administrative agent arising under Section 12.9.

     "Administrative Agent's Payment Office" means the address for payments set forth on the signature page
hereto in relation to the Administrative Agent, or such other address as the Administrative Agent may from time
to time specify.




     "Affiliate" means, as to any Person, any other Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. A Person shall be deemed to control another Person
if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of voting securities, by contract,
or otherwise.

     "Agent-Related Persons" means Wachovia and any successor Administrative Agent arising under Section 12.9,
together with its Affiliates (including the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of Wachovia and such Affiliates.

     "Agents" means the Administrative Agent, The Bank of New York as Syndication Agent and PNC Bank, National
Association, JPMorgan Chase Bank and Harris Nesbitt Financing, Inc., as Documentation Agents.

     "Agreement" means this Credit Agreement, as amended, modified, restated or supplemented from time to time
in accordance with its terms.

     "A.M. Best" means A.M. Best Co.

     "Annual Statement" means the annual financial statement of any insurance company as required to be filed
with the Department, together with all exhibits or schedules filed therewith, prepared in conformity with SAP.
References to amounts on particular exhibits, schedules, lines, pages and columns on such Annual Statements are
based on the formats promulgated by the NAIC for 2003 Annual Statements for the applicable type of insurance
company. If such format is changed in future years so that different information is contained in such items or
they no longer exist, it is understood that the reference is to information consistent with that recorded in
the referenced item in the 2003 Annual Statement of the applicable insurance company.

     "Applicable Percentage" means, at any time, the rate per annum determined in accordance with the
following:

- ------------------ ----------------------------- ----------------------- ------------------- ----------------
      Level                   Parent                  Parent Moody's         Applicable          Facility
                            S&P Rating                   Rating              Percentage            Fee
- ------------------ ----------------------------- ----------------------- ------------------- ----------------
        I                      › A-                       › A3                 0.625%             0.125%
- ------------------ ----------------------------- ----------------------- ------------------- ----------------
       II                 › BBB+ but ‹ A-            › Baa1 but ‹ A3           0.850%             0.150%
- ------------------ ----------------------------- ----------------------- ------------------- ----------------
       III                › BBB but ‹ BBB+           › Baa2 but ‹ Baa1         1.050%             0.200%
- ------------------ ----------------------------- ----------------------- ------------------- ----------------
       IV                 › BBB- but ‹ BBB           › Baa3 but ‹ Baa2         1.225%             0.275%
- ------------------ ----------------------------- ----------------------- ------------------- ----------------
        V                     ‹ BBB-                     ‹ Baa3                1.400%             0.350%
- ------------------ ----------------------------- ----------------------- ------------------- ----------------

     Provided, however, that the foregoing shall be subject to the following:

     (a)   The terms "Parent S&P Rating" and "Parent Moody's Rating" shall for all purposes of this Agreement
mean the ratings solicited by the Parent from and issued by S&P or Moody's, respectively, for the long term
unsecured debt of the Parent. The term "Rating" shall refer to any of the foregoing ratings.

     (b)   If only an S&P Rating or a Moody's Rating is available then the Applicable Percentages shall be
determined on the basis of the Rating which is available but if both such


                                                       2


Ratings are available and the Ratings are split (i.e., the Ratings are not at the same level as contemplated by
the foregoing grid) then (i) the Applicable Percentages shall be determined based upon the higher level Rating
if the two ratings differ by only one level and (ii) the Applicable Percentage shall be determined based on the
level which is one level above the level of the lower of the two ratings if the two ratings differ by more than
one level. If neither an S&P Rating nor a Moody's Rating is available then in that event the Applicable
Percentage shall be determined by the Administrative Agent, after consultation with the Parent, so as to
approximate the Administrative Agent's estimate of what the ratings of long term unsecured indebtedness of the
Parent would have been had such ratings been available, the determination of the Administrative Agent to be
final and conclusive provided it was acting in good faith.

     (c)   Changes in the Applicable Percentage resulting from Rating changes or from Ratings becoming, or
ceasing to be, available shall become effective upon the date of the occurrence in question.

     (d)   References to rating categories hereinabove are references to such categories as presently
determined by S&P and Moody's and in the event a ratings system referred to hereinabove is changed by any such
rating agency, each reference to a particular rating set forth in this Agreement shall be deemed to be a
reference to the rating under such changed rating system which, in the reasonable judgment of the
Administrative Agent, after consultation with the rating service involved, most closely approximates the level
of financial condition associated with the particular rating as currently defined.

     "Arranger" means Wachovia Capital Markets, LLC in its capacity as such.

     "Assignee" has the meaning specified in Section 13.8(a).

     "Assignment and Acceptance" has the meaning specified in Section 13.8(a).

     "Attorney Costs" means and includes all fees and disbursements of any law firm or other external counsel,
the non-duplicative allocated cost of internal legal services and all disbursements of internal counsel.

     "Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et seq.), as amended
from time to time.

     "Base Rate" means, for any day, a rate per annum equal to the higher of: (a) 0.50% per annum above the
Federal Funds Rate in effect for such date; and (b) the rate of interest announced by Wachovia from time to
time as its prime commercial rate for Dollar loans made in the United States (it being understood that such
rate may not be Wachovia's best or lowest rate), as in effect on such day. Any change in the Base Rate
resulting from a change in such prime commercial rate shall take effect at the opening of business on the day
specified in the announcement of such change.

     "Base Rate Loan" means any Loan, or any portion or portions thereof, that bears interest based on the Base
Rate.

                                                       3


     "Borrowing" means a borrowing hereunder consisting of Loans of the same type made to the same Borrower on
the same day by the Lenders under Article II, and, other than in the case of Base Rate Loans, having the same
Interest Period.

     "Borrowing Date" means any date on which a Borrowing occurs under Section 2.3.

     "Borrowers" means the Parent, PLIC and PXP and each of them and "Borrower" means any of the Borrowers. It
is understood that no Borrower is liable for the Loans of the others or costs and expenses related thereto
except to the extent it has guaranteed same pursuant to Article X hereof.

     "Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks in New
York City or Charlotte, North Carolina are authorized or required by law to close and, if the applicable
Business Day relates to any Eurodollar Rate Loan, means any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such other eurodollar interbank
market as may be selected by the Administrative Agent in its sole discretion and acting in good faith.

     "Capital Adequacy Regulation" means any guideline, request or directive of any central bank or other
Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any corporation controlling a bank.

     "CDO's" means all collateralized debt obligations issued by a SPE the assets of which are managed by the
Borrowers, which debt obligations are strictly non-recourse to the Borrowers regardless of whether or not such
CDO's are reported or reflected on the consolidated balance sheets and other financial statements of the
Borrowers from time to time.

     "Change of Control" means

     (a)  the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act
of 1934) of 30% or more of the voting power of the Parent; or

     (b)  the failure of the Parent to own, either directly or indirectly, free and clear of all Liens or other
encumbrances, all of the outstanding shares of the voting stock of the other Borrowers.

     "Code" means the Internal Revenue Code of 1986, and regulations promulgated thereunder, all as amended
from time to time.

     "Commitment," as to each Lender, has the meaning specified in Section 2.1. As of the date of this
Agreement, the amount of the combined Commitments of all Lenders is $150,000,000.

     "Company Action Level" means 200% of the Authorized Control Level Risk-Based Capital of PLIC. The
Authorized Control Level Risk-Based Capital of PLIC shall be computed

                                                       4


in the manner from time to time prescribed by the Insurance Department of the State of New York for inclusion
in the Annual Statement of PLIC to such Department. Such Authorized Control Level Risk-Based Capital currently
appears on page 28 of such statement in column 1, line 31.

     "Compliance Certificate" means a certificate substantially in the form of Exhibit C.

     "Consolidated Net Income" means, with respect to any Person for any period, the net income of such Person
and its Subsidiaries for such period, determined on a consolidated basis and in accordance with GAAP, but
excluding for each such period (without duplication):

     (a)  the income (or loss) of any other Person accrued prior to the date on which it became a Subsidiary of
such Person or was merged into or consolidated with such Person or any of its Subsidiaries or all or
substantially all of the property and assets of such other Person were acquired by such Person or any of its
Subsidiaries; and

     (b)  the income (or loss) of any other Person (other than a Subsidiary of such Person) in which a Person
other than such Person or any of its Subsidiaries owns or otherwise holds an Equity Interest, except to the
extent such income (or loss) shall have been received in the form of cash dividends or other distributions
actually paid to such Person or any of its Subsidiaries by such other Person during such period.

     "Contingent Obligation" means, as to any Person, any direct or indirect liability of that Person, whether
or not contingent, with or without recourse, (a) with respect to any Indebtedness, lease, dividend, letter of
credit or other obligation (the "primary obligations") of another Person (the "primary obligor"), including any
obligation of that Person (i) to purchase, repurchase or otherwise acquire such primary obligations or any
security therefor, (ii) to advance or provide funds for the payment or discharge of any such primary
obligation, or to maintain working capital or equity capital of the primary obligor or otherwise to maintain
the net worth or solvency or any balance sheet item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of
any such primary obligation of the ability of the primary obligor to make payment of such primary obligation,
or (iv) otherwise to assure or hold harmless the holder of any such primary obligation against loss in respect
thereof (each, a "Guaranty Obligation"); (b) with respect to any Surety Instrument issued for the account of
that Person or as to which that person is otherwise liable for reimbursement of drawings or payments if the
obligation supported by such Surety Instrument constitutes Indebtedness; (c) to purchase any materials,
supplies or other property from, or to obtain the services of, another Person if the relevant contract or other
related document or obligation requires that payment for such materials, supplies or other property, or for
such services, shall be made regardless of whether delivery of such materials, supplies or other property is
ever made or tendered, or such services are ever performed or tendered, or (d) in respect of any Swap Contract.
The amount of any Contingent Obligation shall, in the case of Guaranty Obligations, be deemed equal to the
stated or determinable amount of the primary obligation in respect of which such Guaranty Obligation is made
or, if not stated or if indeterminable, the maximum reasonably anticipated liability in respect thereof, and in
the case of other Contingent Obligations, shall be equal to the maximum reasonably anticipated liability in
respect thereof.

                                                       5


     "Contractual Obligation" means, as to any Person, any provision of any security issued by such Person or
of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or
agreement to which such Person is a party or by which it or any of its property is bound.

     "Conversion/Continuation Date" means any date on which, under Section 2.4, a Borrower (a) converts Loans
of one Type to another Type, or (b) continues as Eurodollar Rate Loans, but with a new Interest Period,
Eurodollar Rate Loans having Interest Periods expiring on such date.

     "Default" means any event or circumstance which, with the giving of notice, the lapse of time, or both,
would (if not cured or otherwise remedied during such time) constitute an Event of Default.

     "Department" means the applicable Governmental Authority of the state of domicile of an insurance company
responsible for the regulation of said insurance company.

     "Dollars," "dollar" and "$" each mean lawful money of the United States.

     "Effective Date" means the date as of which the conditions precedent to the initial Loans as specified in
Section 4.1 hereof are satisfied.

     "Eligible Assignee" means (i) a commercial bank organized under the laws of the United States, or any
state thereof, and having a combined capital and surplus of at least $100,000,000 (or its equivalent in foreign
currency); (ii) a commercial bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000 (or its equivalent in foreign currency),
provided that such bank is acting through a branch or agency located in the United States; (iii) a Person that
is primarily engaged in the business of commercial banking and that is (A) a Subsidiary of a Lender, (B) a
Subsidiary of a Person of which a Lender is a Subsidiary, or (C) a Person of which a Lender is a Subsidiary;
and (iv) any other Person agreed to by the Borrowers and the Administrative Agent.

     "Environmental Claims" means all claims, however asserted, by any Governmental Authority or other Person
alleging potential liability or responsibility for violation of any Environmental Law, or for release or injury
to the environment.

     "Environmental Laws" means all federal, state or local laws, statutes, common law duties, rules,
regulations, ordinances and codes, together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters.

     "ERISA" means the Employee Retirement Income Security Act of 1974, and regulations promulgated thereunder,
all as from time to time amended.

     "ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with the
Parent, PLIC or PXP within the meaning of Section 414(b) or (c) of the

                                                       6


Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

     "ERISA Event" means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Parent,
PLIC, PXP or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations
which is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by
the Parent, PLIC, PXP or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan
amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC
to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Parent, PLIC, PXP
or any ERISA Affiliate.

     "Eurodollar Rate" means, with respect to the Interest Period applicable to any Eurodollar Rate Loan, a
rate of interest per annum, determined pursuant to the following formula:

                          Eurodollar Rate  =                     LIBOR Rate             
                                                    100% - Eurodollar Reserve Percentage

     "Eurodollar Rate Loan" means any Loan, or any portion or portions thereof, that bears interest based on
the Eurodollar Rate.

     "Eurodollar Reserve Percentage" means, for any day during an Interest Period for a Borrowing of Eurodollar
Rate Loans, the maximum rate at which reserves (including, without limitation, any supplemental, marginal and
emergency reserves) are imposed on such day by the Board of Governors of the Federal Reserve System (or any
successor) on "Eurocurrency liabilities", as defined in such Board's Regulation D (or in respect of any other
category of liabilities that includes deposits by reference to which the interest rate on Eurodollar Rate Loans
is determined on any category of extension of credit or other assets that include loans by non-United States
offices of any Lender to United States residents) subject to any amendments of such reserve requirement by such
Board or its successor, taking into account any transitional adjustments thereto. The Eurodollar Rate shall
automatically be adjusted as of the date of any change in the Eurodollar Reserve Percentage.

     "Event of Default" means any of the events or circumstances specified in Section 11.1.

     "Exchange Act" means the Securities and Exchange Act of 1934, and regulations promulgated thereunder.

     "Existing Credit Agreement" means the Credit Agreement dated as of December 22, 2003 among the Borrowers,
Wachovia as Administrative Agent, Fleet National Bank as

                                                       7


Syndication Agent and the other agents and financial institutions party thereto, as the same may have been
heretofore amended.

     "Facility Fee" means the fee payable pursuant to Section 2.9(b) hereof with respect to the Commitment.

     "FDIC" means the Federal Deposit Insurance Corporation, and any Governmental Authority succeeding to any
of its principal functions.

     "Federal Funds Rate" means, for any day, a rate per annum (expressed as a decimal, rounded upwards, if
necessary, to the next higher 1/100 of 1%) equal to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that
(i) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if such rate is not so published for any day, the Federal Funds Rate for such
day shall be the average of the quotations for such day on such transactions received by Wachovia as determined
by Wachovia and reported to the Administrative Agent.

     "FRB" means the Board of Governors of the Federal Reserve System, and any Governmental Authority
succeeding to any of its principal functions.

     "GAAP" means generally accepted accounting principles set forth from time to time in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar
functions of comparable stature and authority within the U.S. accounting profession), which are applicable to
the circumstances as of the date hereof.

     "Governmental Authority" means any nation or government, any state or other political subdivision thereof,
any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the
foregoing.

     "Guaranty Obligation" has the meaning specified in the definition of "Contingent Obligation."

     "Highest Lawful Rate" means as to any Lender, the maximum rate of interest, if any, that at any time or
from time to time may be contracted for, taken, charged or received by such Lender on the obligations owed to
it under the laws applicable to such Lender and this transaction.

     "Indebtedness" of any Person means, without duplication, (a) all indebtedness for borrowed money; (b) all
obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than
trade payables entered into in the ordinary course of business on ordinary terms); (c) all non-contingent
reimbursement or payment obligations with respect to Surety Instruments to the extent such Surety Instruments
support payment of

                                                       8


Indebtedness; (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of property, assets or businesses; (e) all
indebtedness created arising under any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by the Person (even though the rights and remedies
of the seller or bank under such agreement in the event of default are limited to repossession or sale of such
property); (f) all obligations with respect to capital leases; (g) all monetary obligations of such Person
under a so-called synthetic or tax retention lease, or any other agreement for the use or possession of
property creating obligations which do not appear on the balance sheet of such Person but which, upon the
insolvency or bankruptcy of such Person, would be characterized as Indebtedness of such Person (without regard
to accounting treatment); (h) all net obligations with respect to Swap Contracts; (i) all indebtedness referred
to in clauses (a) through (h) above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and
contracts rights) owned by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness; and (j) all Guaranty Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (a) through (i) above; provided, however, that, notwithstanding
anything to the contrary contained herein, Indebtedness of the Borrowers shall not include CDO's.

     "Indemnified Liabilities" has the meaning specified in Section 13.5.

     "Indemnified Person" has the meaning specified in Section 13.5.

     "Independent Auditor" has the meaning specified in Section 6.1(a).

     "Insolvency Proceeding" means (a) any case, action or proceeding before any court or other Governmental
Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any assignment for the benefit of creditors, composition, marshaling of
assets for creditors, or other, similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; undertaken under U.S. Federal, state or foreign law, including the Bankruptcy Code.

     "Insurance Code" means with respect to any insurance company, the insurance code of the state of domicile
and any successor statute of similar import together with the regulations thereunder as amended or otherwise
modified and in effect from time to time. References to sections of the Insurance Code shall be construed to
also refer to successor Sections.

     "Interest Payment Date" means, as to any Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan and, as to any Base Rate Loan, the last Business Day of each calendar quarter and each
date such Loan is converted into another Type of Loan, provided, however, that if any Interest Period for a
Eurodollar Rate Loan exceeds three months, the date that falls every successive three months after the
beginning of such Interest Period and the last day thereof is also an Interest Payment Date.

     "Interest Period" means as to any Eurodollar Rate Loan, the period commencing on the Borrowing Date of
such Loan or on the Conversion/Continuation Date on which the Loan is converted into or continued as an
Eurodollar Rate Loan, and ending on the date one, two, three

                                                       9


or six months thereafter as selected by the applicable Borrower in its Notice of Borrowing or Notice of
Conversion/Continuation,

provided that:

          (i)      if any Interest Period would otherwise end on a day that is not a Business Day, that
Interest Period shall be extended to the following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event such Interest Period shall end on the
preceding Business Day;

          (ii)     any Interest Period that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such Interest Period; and

          (iii)    no Interest Period with respect to any Loan shall extend beyond the Termination Date of said
Loan.

     "IRS" means the Internal Revenue Service, and any Governmental Authority succeeding to any of its
principal functions under the Code.

     "Joint Venture" means a single-purpose corporation, partnership, joint venture or other similar legal
arrangement (whether created by contract or conducted through a separate legal entity) now or hereafter formed
by the Parent, PLIC, PXP or any of their Subsidiaries with another Person in order to conduct a common venture
or enterprise with such Person.

     "Lender" means each Person signatory hereto as a "Lender" and each other Person that becomes a "Lender"
hereunder pursuant to Section 13.8, and their respective successors and assigns.

     "Lending Office" means, as to any Lender, the office or offices of such Lender specified as its "Lending
Office" or "Domestic Lending Office" or "Eurodollar Lending Office," as the case may be, on such Lender's
signature page hereto, or such other office or offices as such Lender may from time to time notify the
Borrowers and the Administrative Agent.

     "LIBOR Rate" means, for any Interest Period applicable to a Borrowing of Eurodollar Rate Loans, (a) the
LIBOR Index Rate for such Interest Period, if such rate is available, and (b) if the LIBOR Index Rate cannot be
determined, the arithmetic average of the rates of interest per annum (rounded upwards or downwards, if
necessary, to the nearest 1/100 of 1%) at which deposits in U.S. dollars in immediately available funds are
offered to the Administrative Agent at 11:00 a.m. (London, England time) two (2) Business Days before the
beginning of such Interest Period by three (3) or more major lenders in the interbank eurodollar market
selected by the Administrative Agent for a period equal to such Interest Period and in an amount equal or
comparable to the principal amount of the Eurodollar Rate Loan scheduled to be made by the Administrative Agent
during such Interest Period. "LIBOR Index Rate" means for any Interest Period applicable to a Eurodollar Rate
Loan, the rate per annum (rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in U.S. Dollars for a period equal to such Interest Period, which appears on the
Telerate Page 3750 as of 11:00 a.m.

                                                      10


(London, England time) on the date two Business Days before the commencement of such Interest Period.

     "Lien" means any security interest, mortgage, deed of trust, pledge, hypothecation, assignment, charge or
deposit arrangement, encumbrance, lien (statutory or other) preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under or evidenced by any
conditional sale or other title retention agreement, the interest of a lessor under a capital lease, any
financing lease having substantially the same economic effect as any of the foregoing, or the filing of any
financing statement naming the owner of the asset to which such lien relates as debtor under the Uniform
Commercial Code or any comparable law (other than a filing made in connection with a true sale of accounts
receivable or a precautionary filing made in connection with a true lease) and any contingent or other
agreement to provide any of the foregoing, but not including the interest of a lessor under an operating lease.

     "Loan" means an extension of credit by a Lender to a Borrower under Section 2.1, and may be a Base Rate
Loan or a Eurodollar Rate Loan (each a "Type of Loan").

     "Loan Documents" means this Agreement, any Notes and all other certificates and documents required to be
delivered to the Administrative Agent or any Lender in connection herewith.

     "Majority Lenders" means, at any time, Lenders having Loans outstanding and unused Commitments
representing at least 51% of the sum of all Loans outstanding and unused Commitments at such time.

     "Margin Stock" means "margin stock" as such term is defined in Regulation T, U or X of the FRB.

     "Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, the
operations, management, business, properties, condition (financial or otherwise) or prospects of the Parent and
its Subsidiaries taken as a whole; (b) a material impairment of the ability of any of the Parent, PLIC or PXP
to perform under any Loan Document or to avoid any Event of Default; or (c) an adverse effect upon the
legality, validity, binding effect or enforceability against any of the Parent, PLIC or PXP of any Loan
Document.

     "Measurement Period" means, at any date of determination the most recently completed four consecutive
fiscal quarters of the Parent on or immediately prior to such date.

     "Moody's" means Moody's Investors Services, Inc.

     "Multiemployer Plan" means a "Multiemployer plan," within the meaning of Section 4001(a)(3) of ERISA, to
which the Parent, PLIC or PXP or any ERISA Affiliate makes, is making, or is obligated to make contributions
or, during the preceding three calendar years, has made, or been obligated to make, contributions.

     "Note" means a promissory note executed by a Borrower in favor of a Lender pursuant to Section 2.2 in
substantially the form of Exhibit D.

                                                      11


     "Notice of Borrowing" means a notice in substantially the form of Exhibit A.

     "Notice of Conversion/Continuation" means a notice in substantially in the form of Exhibit B.

     "Obligations" means the principal of and interest on the Loans and all other fees, advances, debts,
liabilities, obligations, covenants and duties arising under any Loan Document owing by the Parent, PLIC, PXP
or any of them to any Lender, any Agent, or any other Indemnified Person, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising.

     "OFAC" means the Office of Foreign Assets Control of the United States Department of the Treasury.

     "Organization Documents" means, for any corporation, the certificate or articles of incorporation, the
bylaws, any certificate of determination or instrument relating to the rights of preferred shareholders of such
corporation, any shareholder rights agreement, and all applicable resolutions of the board of directors (or any
committee thereof) of such corporation.

     "Parent" is defined in the introductory paragraph hereof.

     "Parent Total Debt to Capitalization Ratio" means the ratio for the Parent and its Subsidiaries, computed
on a consolidated basis in accordance with GAAP, of its Indebtedness (exclusive of Indebtedness in connection
with the Parent's 7.25% equity units through February 16, 2006 and exclusive of Indebtedness which is
mandatorily convertible into equity securities within three years of issuance and obligations on Swap Contracts
entered into in the ordinary course of business and not for speculation), to the sum of its Indebtedness
(exclusive of obligations on Swap Contracts entered into in the ordinary course of business and not for
speculation) plus its Shareholders' Equity.

     "Participant" has the meaning specified in Section 13.8(d).

     "PATRIOT Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001), as amended from time to time, and any successor
statute, and all rules and regulations from time to time promulgated thereunder.

     "PBGC" means the Pension Benefit Guaranty Corporation, or any Governmental Authority succeeding to any of
its principal functions under ERISA.

     "Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA
which any of the Parent, PLIC or PXP sponsors, maintains, or to which it makes, is making, or is obligated to
make contributions, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has
made contributions at any time during the immediately preceding five (5) plan years.

     "Permitted Liens" has the meaning specified in Section 7.1.

                                                      12


     "Person" means an individual, partnership, limited liability company, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture, Governmental Authority, or other entity of any
nature whatsoever.

     "Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA) which any of the Parent, PLIC
or PXP sponsors or maintains or to which any of them makes, is making, or is obligated to make contributions
and includes any Pension Plan.

     "PLIC" is defined in the introductory paragraph hereof.

     "Primary Insurance Subsidiaries" means PLIC and those other Primary Subsidiaries principally engaged in
the business of insurance.

     "Primary Subsidiaries" means PXP, PLIC and any other Subsidiary of the Parent or PLIC which at the time of
determination has capital or a net worth in excess of $25,000,000.

     "Pro Rata Share" means as to any Lender at any time with respect to the Loans, the percentage equivalent
(expressed as a decimal, rounded to the ninth decimal place) at such time of such Lender's Commitments divided
by the combined Commitments of all Lenders.

     "PXP" is defined in the introductory paragraph hereof.

     "Reportable Event" means, any of the events set forth in Section 4043(b) of ERISA or the regulations
thereunder, other than any such event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.

     "Requirement of Law" means, as to any Person, any law (statutory or common), treaty, rule or regulation or
determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property is subject.

     "Responsible Officer" means, with respect to any Person, any one of the chief executive officer, the
president, any executive vice president, or the treasurer of such Person, or any other officer having
substantially the same authority and responsibility.

     "Risk Based Capital Ratio" means, as of any time the same is to be determined, the ratio of adjusted
capital of PLIC to the Company Action Level of PLIC. Adjusted capital, for the purpose of this definition,
shall be computed in the manner from time to time prescribed by the Insurance Department of the State of New
York as total adjusted capital for inclusion in the Annual Statement of PLIC to such department (currently
appearing on page 28 of such annual statement in column 1, line 30 and currently consisting of capital and
surplus, the asset valuation reserve of PLIC and 50% of PLIC's dividend liability).

     "S&P" means Standard & Poor's Ratings Services, a division of McGraw Hill, Inc.

     "SAP" means, as to PLIC, the statutory accounting principles prescribed or permitted by the Department, or
in the event that the Department fails to prescribe or address such practices, the NAIC guidelines.

                                                      13


     "SEC" means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its
principal functions.

     "Shareholders' Equity" means the shareholders' equity of the applicable Person and its Subsidiaries
determined on a consolidated basis in accordance with GAAP; provided, however, that, notwithstanding anything
to the contrary contained herein, the accounting impact of consolidating any SPE as a result of the adoption of
accounting standard FIN 46-R, Consolidation of Variable Interest Entities, shall be excluded for purposes of
calculating financial covenant compliance by the Borrowers hereunder.

     "SPE" means any special purpose entity which is established for the purpose of issuing CDO's and holding
assets to collateralize such CDO's.

     "Subsidiary" of a Person means any corporation, limited liability company, association, partnership, joint
venture or other business entity of which more than 50% of the voting stock or other equity interests (in the
case of Persons other than corporations), is owned or controlled directly or indirectly by the Person, or one
or more of the Subsidiaries of the Person, or a combination thereof. The foregoing to the contrary
notwithstanding, a partnership or joint venture formed for the purpose of making or managing investments in the
ordinary course of business shall not be a Subsidiary if the Person in question directly or indirectly owns
less than 50% of the equity in the entity in question, provided that any Indebtedness, of such entity for which
the Person in question is liable (whether by contract, operation of law or otherwise) shall constitute
Indebtedness of the Person in question. Unless the context otherwise clearly requires, references herein to a
"Subsidiary" refer to a Subsidiary of the Parent.

     "Surety Instruments" means all letters of credit (including standby and commercial), banker's acceptances,
bank guaranties, shipside bonds, surety bonds and similar instruments.

     "Surplus Notes" means PLIC's 6.95% Surplus Notes due December 1, 2006.

     "Swap Contract" means any agreement (including any master agreement and any agreement, whether or not in
writing, relating to any single transaction) that is an interest rate swap agreement, basis swap, forward rate
agreement, commodity swap, commodity option, equity or equity index swap or option, bond option, interest rate
option, forward foreign exchange agreement, rate cap, collar or floor agreement, currency swap agreement, cross
currency rate swap agreement, swaption, currency option or any other, similar agreement (including any option
to enter into any of the foregoing).

     "Termination Date" means with respect to the Commitments and the Loans, the earlier to occur of: (i)
November 22, 2007; and (ii) the date on which the Commitments terminate in accordance with the provisions of
this Agreement.

     "Type of Loan" has the meaning specified in the definition of "Loan".

     "Unfunded Pension Liability" means the excess of a Pension Plan's benefit liabilities under Section
400l(a)(16) of ERISA, over the current value of that Pension Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412 of the Code, for the applicable plan
year.

                                                      14


     "United States" and "U.S." each means the United States of America.

     "Wachovia" means Wachovia Bank, National Association, a national banking association.

     "Wholly-Owned Subsidiary" means any corporation in which (other than directors' qualifying shares required
by law) 100% of the capital stock of each class having ordinary voting power, and 100% of the capital stock of
every other class, in each case, at the time as of which any determination is being made, is owned,
beneficially and of record, by the parent entity in question or by one or more of the other Wholly-Owned
Subsidiaries thereof, or both.

     Section 1.2. Other Interpretive Provisions.

     (a)  The meanings of defined terms are equally applicable to the singular and plural forms of the defined
terms.

     (b)  The words "hereof," "herein," "hereunder" and similar words refer to this Agreement as a whole and not
to any particular provision of this Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.

     (c)  (i)      The term "documents" includes any and all instruments, documents, agreements, certificates,
indentures, notices and other writings, however evidenced.

          (ii)     The term "including" is not limiting and means "including without limitation."

          (iii)    In the computation of periods of time from a specified date to a later specified date, the
word "from" means "from and including"; the words "to" and "until" each mean "to but excluding," and the word
"through" means "to and including."

     (d)  Except as otherwise stated, the terms "determine" or "determination" mean to reasonably determine or
reasonable determination, respectively.

     (e)  Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement)
and other contractual instruments shall be deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any
Loan Document, and (ii) references to any statute or regulation are to be construed as including all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.

     (f)  The captions and headings of this Agreement are for convenience of reference only and shall not
affect the interpretation of this Agreement.

     (g)  This Agreement and other Loan Documents may use several different limitations, tests or measurements
to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.

                                                      15


     (h)  This Agreement and the other Loan Documents are the result of negotiations among and have been
reviewed by counsel to the Agents, the Borrowers and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the Agents merely because of the Agents' or
Lenders' involvement in their preparation.

     Section 1.3. Accounting Principles.

     (a)  Unless the context otherwise clearly requires, all accounting terms not expressly defined herein
shall be construed, and all financial computations required under this Agreement shall be made, in accordance
with GAAP, consistently applied.

     (b)  References herein to "fiscal year" and "fiscal quarter" refer to calendar years and calendar
quarters, respectively.

     (c)  All financial covenants will be calculated based upon relevant accounting principles and risk based
capital rules in effect as of the date hereof.

                                                  ARTICLE II

                                                  THE CREDITS

     Section 2.1. Amounts and Terms of Commitments. Each Lender severally agrees, on the terms and
conditions set forth herein, to make revolving loans to the Borrowers (each such loan, a "Loan") from time to
time on any Business Day during the period from the Effective Date to the Termination Date of the Commitments,
in an aggregate amount not to exceed at any time outstanding, together with the principal amount of Loans
outstanding in favor of such Lender at such time, the amount set forth next to such Lender's name on Schedule
2.1(a) (such amount as the same may be reduced under Section 2.5, increased under Section 2.14, or reduced as a
result of one or more assignments under Section 13.8, the Lender's "Commitment"); provided, however, that,
after giving effect to any Borrowing, the aggregate principal amount of all outstanding Loans shall not at any
time exceed the combined Commitments. Within the limits of each Lender's Commitment, and subject to the other
terms and conditions hereof, the Borrowers may borrow under this Section 2.1, prepay under Section 2.6 and
reborrow under this Section 2.1.

     Section 2.2. Loan Accounts; Notes.

     (a)  The Loans made by each Lender to each Borrower shall be evidenced by one or more loan accounts or
records maintained by such Lender in the ordinary course of business. The loan accounts or records maintained
by the Administrative Agent shall be conclusive absent manifest error of the amount of the Loans made by the
Lenders to each Borrower and the interest and payments thereon. Any failure so to record or any error in doing
so shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount
owing with respect to the Loans.

     (b)  Upon the request of any Lender made through the Administrative Agent, the Loans made by such Lender
to each Borrower may be evidenced by one or more Notes, instead

                                                      16


of loan accounts. Each such Lender shall endorse on the reverse of or on schedules annexed to its Note(s) the
date, amount and maturity of each Loan made by it to the applicable Borrower and the amount of each payment of
principal made by each Borrower with respect thereto. Each such Lender is irrevocably authorized by each
Borrower to endorse its Note(s); provided, however, that the failure of a Lender to make, or an error in
making, a notation thereon with respect to any Loan shall not limit or otherwise affect the obligations of the
Borrowers hereunder or under any such Note to such Lender

     Section 2.3. Procedure for Borrowing.

     (a)  Each Borrowing shall be made upon the applicable Borrower's irrevocable written notice delivered to
the Administrative Agent in the form of a Notice of Borrowing (which notice must be received by the
Administrative Agent prior to 11:00 a.m. (New York City time) (i) three Business Days prior to the requested
Borrowing Date, in the case of Eurodollar Rate Loans; and (ii) on the date of the Borrowing, in the case of
Base Rate Loans, specifying:

          (i)      the amount of the Borrowing, which shall be in an aggregate minimum amount of $5,000,000 or
any multiple of $1,000,000 in excess thereof;

          (ii)     the requested Borrowing Date, which shall be a Business Day;

          (iii)    the Type of Loans comprising the Borrowing; and

          (iv)     in the case of Eurodollar Rate Loans, the duration of the Interest Period applicable to such
Loans included in such notice. If the Notice of Borrowing fails to specify the duration of the Interest Period
for any Borrowing comprised of Eurodollar Rate Loans, such Interest Period shall be three months.

     (b)  After giving effect to any Borrowing, there may be no more than 8 different Interest Periods in
effect with respect to the Loans.

     (c)  Each Borrowing shall be made from the Lenders in accordance with their Pro Rata Shares.

     Section 2.4. Conversion and Continuation Elections.

     (a)  Each Borrower may, upon irrevocable written notice to the Administrative Agent in accordance with
Section 2.4(b):

          (i)      elect, as of any Business Day, in the case of its Base Rate Loans, or as of the last day of
the applicable Interest Period, in the case of its Eurodollar Rate Loans, to convert any such Loans (or any
part thereof in an amount not less than $5,000,000, or that is in an integral multiple of $1,000,000 in excess
thereof) into Loans of any other Type; or

          (ii)     elect, as of the last day of the applicable Interest Period, to continue any Loans having
Interest Periods expiring on such day (or any part thereof in an amount not less than $5,000,000, or that is in
an integral multiple of $1,000,000 in excess thereof);

                                                      17


provided, that if at any time the aggregate amount of a Eurodollar Rate Loan is reduced, by payment,
prepayment, or conversion of part thereof to be less than $5,000,000, such Eurodollar Rate Loan shall
automatically convert into Base Rate Loans.

     (b)  The applicable Borrower shall deliver a Notice of Conversion/Continuation to be received by the
Administrative Agent not later than 11:00 a.m. (New York City time) at least (i) three Business Days in advance
of the Conversion/Continuation Date, if the Loans are to be converted into or continued as Eurodollar Rate
Loans; and (ii) on the Conversion/Continuation Date, if the Loans are to be converted into Base Rate Loans,
specifying:

          (A)      the proposed Conversion/Continuation Date;

          (B)      the aggregate amount of such Loans to be converted or continued;

          (C)      the Type of Loans resulting from the proposed conversion or continuation; and

          (D)      in the case of continuations of or conversions into Eurodollar Rate Loans, the duration of
     the requested Interest Period.

     (c)  If upon the expiration of any Interest Period applicable to Eurodollar Rate Loans, the applicable
Borrower has failed to select timely a new Interest Period to be applicable to such Eurodollar Rate Loans, or
if any Default or Event of Default then exists, such Borrower shall be deemed to have elected to convert such
Eurodollar Rate Loans into Base Rate Loans effective as of the expiration date of such Interest Period.

     (d)  The Administrative Agent will promptly notify each Lender of its receipt of a Notice of
Conversion/Continuation, or, if no timely notice is provided by the applicable Borrower, the Administrative
Agent will promptly notify each Lender of the details of any automatic conversion. All conversions and
continuations shall be made ratably according to the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Lender.

     (e)  Unless the Majority Lenders otherwise agree, with respect to all Loans during the existence of a
Default or Event of Default, the Borrowers may not elect to have a Loan converted into or continued as an
Eurodollar Rate Loan.

     Section 2.5. Voluntary Termination or Reduction of Commitments. The Borrowers may, upon not less
than three Business Days' prior notice to the Administrative Agent, terminate the Commitments, or permanently
reduce the Commitments by an aggregate minimum amount of $5,000,000 or any multiple of $1,000,000 in excess
thereof; provided, however, that after giving effect thereto and to any prepayments of Loans made on the
effective date thereof, the then outstanding principal amount of the Loans may not exceed the amount of the
combined Commitments then in effect. Once reduced in accordance with this Section, the Commitments may not be
increased. Any reduction of the Commitments shall be applied to each Lender according to its Pro Rata Share.
All accrued facility fees to, but not including the effective date of any reduction or termination of
Commitments, shall be paid on the effective date of such reduction or termination.

                                                      18


     Section 2.6. Optional and Mandatory Prepayments.

     (a)  Voluntary Prepayments. Subject to Section 3.4, any Borrowers may, at any time or from time to time,
upon not less than three Business Days' (or one Business Day's, in the case of Base Rate Loans) irrevocable
notice to the Administrative Agent, ratably prepay any of its Loans in whole or in part, in minimum amounts of
$5,000,000 or any multiple of $1,000,000 in excess thereof. Such notice of prepayment shall specify the date
and amount of such prepayment and the Type(s) of Loans to be prepaid. The Administrative Agent will promptly
notify each affected Lender of its receipt of any such notice, and of such Lender's Pro Rata Share of such
prepayment. If such notice is given by a Borrower, such Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified therein, together with accrued
interest to each such date on the amount prepaid and any amounts required pursuant to Section 3.4.

     (b)  Mandatory Prepayments.

          (i)      Equity Issuances. Promptly upon receipt thereof by the Parent or a Subsidiary, the Parent
shall pay over to the Administrative Agent as and for a mandatory prepayment on the Loans an amount equal to
100% of all net cash proceeds (i.e., gross proceeds less out of pocket costs at issuance including underwriters
discounts, investment banking, legal and advisory fees) received by the Parent or any Subsidiary from a public
offering, private placement or other issuance or sale of the capital stock or other equity interests (or of
warrants, options or other rights therefor) of the Parent or any of its Subsidiaries, provided however that no
such prepayment need be made out of the proceeds of the issuance or sale of equity interests in a Subsidiary to
the Parent or to another Subsidiary.

          (ii)     Debt Issuances. Promptly upon receipt by the Parent or any Subsidiary of any amounts from or
out of the issuance of any Indebtedness, the Parent shall or shall cause any borrowing Subsidiary which has
Loans outstanding to, pay over to the Administrative Agent as and for a mandatory prepayment on the Loans an
amount equal to the net cash proceeds (i.e., gross proceeds less out of pocket costs at issuance including
underwriters discounts, investment banking, advisory and legal fees) received by the Parent or its Subsidiaries
therefrom except that no such prepayment shall be required to be made out of (i) the issuance of Indebtedness
by any Subsidiary to the Parent or any other Subsidiary, (ii) payments received under Swap Contracts, (iii)
Indebtedness consisting of capitalized leases, conditional sales or other retention devices incurred for the
purpose of financing the purchase of fixed or capital assets, (iv) the proceeds of Indebtedness incurred by
Subsidiaries engaged in the business of insurance to the extent such Indebtedness was incurred for the purpose
of satisfying a regulatory requirement or supporting the conduct by such Subsidiary of its business of
insurance, in each case under circumstances under which the proceeds of such Indebtedness are retained by such
insurance Subsidiary and not used to pay a dividend or retire Indebtedness owed to the Parent or another
Subsidiary, (v) the proceeds of new Indebtedness used by the Parent or any of its Subsidiaries to refinance any
permitted existing Indebtedness, provided that such refinancing is not otherwise restricted pursuant to this
Agreement, (vi) Indebtedness outstanding under this Agreement, and (vii) other Indebtedness not otherwise
excepted by the foregoing and aggregating not more than $25,000,000 at any one time outstanding.

                                                      19


          (iii)    Fixed Asset Proceeds. An amount equal to any and all net cash proceeds (i.e., gross cash
proceeds net of out of pocket expenses and property and transfer taxes incurred in effecting the sale or other
disposition in question and net of proceeds applied to repayment of liens on the assets sold or disposed of)
received by the Parent or any of its Subsidiaries from the sale or other disposition (whether voluntary or
involuntary) of fixed or capital assets (including the proceeds of a sale as part of sale/leaseback transaction
and proceeds (including insurance proceeds) received as a result of damage to or destruction of fixed or
capital assets and the proceeds of any taking, whether by eminent domain or otherwise, of any such assets)
shall be promptly paid over to the Administrative Agent as and for a mandatory prepayment on the Loans provided
however that (aa) the foregoing provision shall be inapplicable to funds received as a result of casualty
losses or condemnations in the event that either the amount received in respect of any particular occurrence is
less than $2,500,000 or the Parent notifies the Administrative Agent that the Parent or the applicable
Subsidiary intends to utilize the proceeds in question to repair or replace the asset damaged or destroyed and
such proceeds are in fact so utilized within 180 days of their receipt by the Parent or the applicable
Subsidiary, (ab) no prepayment shall be required with respect to net cash proceeds received from the ordinary
course of business, sale or other disposition of fixed or capital assets which are obsolete or worn out; (ac)
no prepayment shall be required with respect to such net cash proceeds received from the sale of the Borrower's
East Greenbush, New York facility, (ad) no prepayment shall be required with respect to such net cash proceeds
received by a Subsidiary engaged in the business of insurance if and to the extent that the proceeds are
required to be retained by the Subsidiary in question in order to satisfy a regulatory requirement to which it
is subject or to the extent that such retention is in the opinion of any applicable commissioner of insurance
or other regulatory body necessary or appropriate to maintain the soundness of such insurance Subsidiary
whether or not the opinion of such commissioner of insurance or regulatory body has the force of law; and (ae)
no prepayment shall be required out of the first $2,500,000 of such net cash proceeds received by the Parent
and its Subsidiaries in any fiscal year which are not otherwise excepted from prepayment hereunder.

          (iv)     Securitization Transactions. An amount equal to any and all net cash proceeds (i.e., gross
cash proceeds, net of out of pocket expenses including investment banking, advisory and legal fees) received by
the Parent or its Subsidiaries from the sale of accounts receivable, notes receivable or other financial assets
shall be paid over to the Administrative Agent as and for a mandatory prepayment on the Loans, provided,
however that (aa) there shall be exempted from the foregoing any amount of the proceeds of such a transaction
which is required by the parties to the transaction which are not Affiliates of the Parent to be retained to
assure performance of the transaction (including retentions of amounts in the nature of a debt service reserve
fund), (ab) no prepayment need be made out of the sale or liquidation of investments made in the ordinary
course of business of the Parent and its Subsidiaries substantially as now conducted, and (ac) any transaction
of the foregoing types by a Subsidiary engaged in the business of insurance shall not require prepayment
hereunder if and to the extent that the proceeds of the transaction are required to be retained by the
Subsidiary in question in order to satisfy a regulatory requirement to which it is subject or to the extent
that such retention is in the opinion of any applicable commissioner of insurance or other regulatory body
necessary or appropriate to maintain the soundness of such insurance Subsidiary whether or not the opinion of
such commissioner of insurance or regulatory body has the force of law. Notwithstanding the foregoing, in no
event shall the Parent or any of its Subsidiaries, including, without limitation, PLIC, be permitted to enter
into any transaction relating to the sale, transfer or other disposition

                                                      20




of the closed block of business of PLIC except as otherwise specifically permitted pursuant to Section 7.2(c)
hereof. If any transaction described in this clause (iv) could also be characterized as the incurrence of
Indebtedness the provisions of this clause (iv) shall control over the provisions of clause (ii) hereof.

          (v)      Sale of Other Assets. An amount equal to any and all net cash proceeds (i.e., gross cash
proceeds net of out of pocket expenses and property and transfer taxes incurred in effecting the sale or other
disposition in question and net of proceeds applied to repayment of liens on the assets sold or disposed of)
received by the Parent or any of its Subsidiaries from the sale or other disposition (whether voluntary or
involuntary) of any other assets of the Parent or any of its Subsidiaries not described in clauses (iii) or
(iv) above including, without limitation, the sale of any line of business of the Parent or any of its
Subsidiaries and the sale of any interest of the Parent or any of its Subsidiaries in any joint venture, shall
be promptly paid over to the Administrative Agent as and for a mandatory prepayment on the Loans provided
however that the foregoing provision shall be inapplicable (aa) to the sale of any such assets in the
ordinary course of business; or (bb) to the extent that the net cash proceeds from such sale are re-invested in
the Parent or its Subsidiaries and not used for the payment of dividends.

          (vi)     Breakage. If a mandatory prepayment could not be made without prepaying Eurodollar Rate
Loans and such a prepayment would result in a reimbursement obligation arising under Section 3.4 hereof, the
Parent or other depositor may, so long as no Default or Event of Default has occurred and is continuing, elect
to deposit the amount of the prepayment with the Administrative Agent to be held by the Administrative Agent
until such prepayment can be effected without triggering a reimbursement liability under Section 3.4 hereof.
The amounts so held by the Administrative Agent, may at the option of Parent or other depositor be invested in
an interest bearing account maintained with the Administrative Agent, or other high grade investments mutually
acceptable to the depositor and the Administrative Agent pending application of the proceeds thereof to
Eurodollar Rate Loans, all such investments to constitute collateral security for the Obligations to be prepaid
and with the earnings on such investments to be remitted to the depositor.

          (vii)    General Principles and Applications. If and to the extent that any transaction giving rise
to a requirement of prepayment under this Section 2.6(b) results in the receipt of funds by a Subsidiary which
is not a Borrower or receipt of funds by a Borrower in excess of the amount of its Loans hereunder, the Parent
shall nonetheless cause an amount equal to the amount required to be prepaid hereunder to be paid over to the
Administrative Agent as aforesaid and, without limiting the foregoing principles in any respect, nothing herein
contained shall be deemed to require any party to directly prepay Loans for which it is not the obligor or a
guarantor. All required prepayments under this Section 2.6(b) shall be applied to reduce the outstanding
balance of the Loans on a pro rata basis but such prepayment shall not reduce any of the Commitments.

     Section 2.7. Repayment. Each Borrower shall repay to the Lenders on the Termination Date the aggregate
principal amount of the Loans to it which are outstanding on such date.

                                                      21


     Section 2.8. Interest.

     (a)      Each Loan shall bear interest on the outstanding principal amount thereof from the applicable
Borrowing Date at a rate per annum equal to the Eurodollar Rate or the Base Rate, as the case may be (and
subject to the applicable Borrower's right to convert to other Types of Loans under Section 2.4), plus, in the
case of Eurodollar Rate Loans, the Applicable Percentage in effect therefor from time to time.

     (b)      Interest on each Loan shall be paid in arrears on each Interest Payment Date. Interest shall also
be paid on the date of any prepayment of Loans under Section 2.6 for the portion of any such Loans so prepaid
and upon payment (including prepayment) in full thereof and, with respect to any Loan during the existence of
any Event of Default, interest shall be paid on demand of the Administrative Agent at the request or with the
consent of the Majority Lenders.

     (c)      Notwithstanding subsection (a) of this Section with respect to any Loan, while any Event of
Default exists or after acceleration, the applicable Borrower shall pay interest (after as well as before entry
of judgment thereon to the extent permitted by law) on the principal amount of all outstanding Loans, at a rate
per annum which is determined by adding 2% per annum to the Applicable Percentage then in effect for such Loans
and, in the case of Base Rate Loans, at a rate per annum equal to the Base Rate plus 2%; provided, however,
that, on and after the expiration of any Interest Period applicable to any Eurodollar Rate Loan outstanding on
the date of occurrence of such Event of Default or acceleration, the principal amount of such Loan shall,
during the continuation of such Event of Default or after acceleration, bear interest at a rate per annum equal
to the Base Rate plus 2%.

     (d)      Highest Lawful Rate. At no time shall the interest rate payable on the Loans of any Lender,
together with the fees and all other amounts payable under the Loan Documents to such Lender, to the extent the
same are construed to constitute interest, exceed the Highest Lawful Rate applicable to such Lender. If with
respect to any Lender for any period during the terms of this Agreement, any amount paid to such Lender under
the Loan Documents, to the extent the same shall (but for the provisions of this Section) constitute or be
deemed to constitute interest, would exceed the maximum amount of interest permitted by the Highest Lawful Rate
applicable to such Lender during such period (such amount being hereinafter referred to as an "Unqualified
Amount"), then (i) such Unqualified Amount shall be applied or shall be deemed to have been applied as a
prepayment of the Loans of such Lender, and (ii) if in any subsequent period during the term of this Agreement,
all amounts payable under the Loan Documents to such Lender in respect of such period which constitute or shall
be deemed to constitute interest shall be less than the maximum amount of interest permitted by the Highest
Lawful Rate applicable to such Lender during such period, then the Borrowers shall pay to such Lender in
respect of such period an amount (each a "Compensatory Interest Payment") equal to the lesser of (x) a sum
which, when added to all such amounts, would equal the maximum amount of interest permitted by the Highest
Lawful Rate applicable to such Lender during such period, and (y) an amount equal to the Unqualified Amount
less all other Compensatory Interest Payments made in respect thereof.

                                                      22


     Section 2.9. Fees.

     (a)      Arrangement, Agency Fee. The Parent shall pay such fees to the Arranger and the Agents for their
own accounts as may be agreed to between the Parent and the Arranger and the Agents from time to time.

     (b)      Facility Fee. The Parent shall pay to the Administrative Agent for the account of each Lender a
facility fee (the "Facility Fee") on such Lender's Commitment, whether or not in use, computed on a quarterly
basis in arrears on the last Business Day of each calendar quarter as calculated by the Administrative Agent,
at the rate per annum equal to the Applicable Percentage then in effect for such fee from time to time during
such quarter. The Facility Fee shall accrue from the Effective Date to the Termination Date (including at any
time during which one or more conditions in Section 4.2 are not met) and shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter (commencing on March 31, 2005) through the
Termination Date, with the final payment to be made on the Termination Date; provided that, in connection with
any reduction or termination of the Commitments, the accrued Facility Fee calculated for the period ending on
such date shall also be paid on the date of such reduction or termination, with the following quarterly payment
being calculated on the basis of the period from such reduction or termination date to such quarterly payment
date.

     (c)      Facility Fee After Termination Date. If, for any reason, any Loans remain outstanding after the
Termination Date, the Parent shall pay the Facility Fee to the Administrative Agent for the account of each
Lender having such Loans outstanding after the Termination Date based on such Lender's Pro Rata Share of the
Loans outstanding.

     (d)      Upfront Fee. On the date hereof the Parent shall pay to each Lender a fee in the amount which has
been agreed upon between them.

     Section 2.10. Computation of Fees and Interest.

     (a)      All computations of interest for Base Rate Loans when the Base Rate is determined by the prime
commercial rate of Wachovia and all computations of the Facility Fees shall be made on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed. All other computations of interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year). Interest and fees shall accrue during each Interest Period or other
period during which interest or such fees are computed from the first day thereof to but excluding the last day
thereof.

     (b)      Each determination of an interest rate by the Administrative Agent shall be conclusive and
binding on the Borrowers and the Lenders in the absence of manifest error.

     Section 2.11. Payments.

     (a)      All payments to be made by the Borrowers or any of them shall be made without set-off, recoupment
or counterclaim. Except as otherwise expressly provided herein, all such payments shall be made to the
Administrative Agent for the account of the Lenders at the Administrative Agent's Payment Office, and shall be
made in Dollars and in immediately

                                                      23


available funds, no later than 12:00 p.m. (New York City time) on the date specified herein. With respect to
each Loan for which a payment has been received, the Administrative Agent will promptly distribute to each
Lender its Pro Rata Share (or other applicable share as expressly provided herein) of such payment in like
funds as received. Any payment received by the Administrative Agent later than 12:00 p.m. (New York City time)
shall be deemed to have been received on the following Business Day and any applicable interest or fee shall
continue to accrue.

     (b)      Subject to the provisions set forth in the definition of "Interest Period" herein, whenever any
payment is due on a day other than a Business Day, such payment shall be made the following Business Day, and
such extension of time shall in such case be included in the computation of interest or fees, as the case may
be.

     (c)      Unless the Administrative Agent receives notice from a Borrower prior to the date on which any
payment is due to any of the Lenders that such Borrower will not make such payment in full as and when
required, the Administrative Agent may assume that such Borrower has made such payment in full to the
Administrative Agent on such date in immediately available funds and the Administrative Agent may (but shall
not be so required), in reliance upon such assumption, distribute to each such Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent each Borrower has not made such payment
in full to the Administrative Agent, such Lender shall repay to the Administrative Agent on demand such amount
distributed to such Lender, together with interest thereon at the Federal Funds Rate for each day from the date
such amount is distributed to such Lender until the date repaid.

     Section 2.12. Payments by the Lenders to the Administrative Agent.

     (a)      Unless the Administrative Agent receives notice from a Lender on or prior to the Effective Date
or, with respect to any Borrowing after the Effective Date, at least one Business Day prior to the date of such
Borrowing, that such Lender will not make available as and when required hereunder to the Administrative Agent
for the account of a Borrower the amount of that Lender's Pro Rata Share of the Borrowing, the Administrative
Agent may assume that each Lender has made such amount available to the Administrative Agent in immediately
available funds on the Borrowing Date and the Administrative Agent may (but shall not be so required) in
reliance upon such assumption, make available to the applicable Borrower on such date a corresponding amount.
If and to the extent any Lender shall not have made its full amount available to the Administrative Agent in
immediately available funds and the Administrative Agent in such circumstances has made available to a Borrower
such amount, that Lender shall on the Business Day following such Borrowing Date make such amount available to
the Administrative Agent, together with interest at the Federal Funds Rate for each day during such period. A
notice of the Administrative Agent submitted to any Lender with respect to amounts owing under this subsection
(a) shall be conclusive, absent manifest error. If such amount is so made available, such payment to the
Administrative Agent shall constitute such Lender's Loan on the date of the Borrowing for all purposes of this
Agreement. If such amount is not made available to the Administrative Agent on the Business Day following the
Borrowing Date, the Administrative Agent will notify the applicable Borrower of such failure to fund and, upon
demand by the Administrative Agent, such Borrower shall pay such amount to the Administrative Agent for the
Administrative Agent's account, together with interest thereon for

                                                      24


each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at
the time to the Loans comprising such Borrowing.

     (b)      The failure of any Lender to make any Loan on any Borrowing Date shall not relieve any other
Lender of any obligation hereunder to make a Loan on such Borrowing Date, but no Lender shall be responsible
for the failure of any other Lender to make the Loan to be made by such other Lender on any Borrowing Date.

     Section 2.13. Sharing of Payments, Etc. If, other than as expressly provided elsewhere herein, any
Lender shall obtain on account of the Loans made by it any payment (other than through the exercise of any
right of set-off which shall be governed by Section 13.10 hereof) in excess of its Pro Rata Share with respect
to such Loans, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase
from the other Lenders such participations in the Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment pro rata with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from the purchasing Lender, such purchase shall to that
extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid
therefor, together with an amount equal to such paying Lender's ratable share (according to the proportion of
(i) the amount of such paying Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the
total amount so recovered. The Borrowers agree that any Lender so purchasing a participation from another
Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of
set-off, but subject to Section 13.10) with respect to such participation as fully as if such Lender were the
direct creditor of the applicable Borrower in the amount of such participation. The Administrative Agent will
keep records (which shall be conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Lenders following any such purchases or
repayments.

     Section 2.14. Commitment Increase. The Borrowers shall have the right, from time to time prior to the
Termination Date provided that no Default or Event of Default shall have occurred and be continuing at such
time, to request an increase in the Commitments in an aggregate amount of up to $50,000,000. Any such requested
increase in the Commitments hereunder shall be offered by the Borrowers first to the existing Lenders. If the
additional Commitments accepted by one or more of the existing Lenders are less than the amount requested by
the Borrowers, the Borrowers may invite other financial institutions that meet the qualifications for an
Eligible Assignee (including the reasonable approval of the Administrative Agent) to become Lenders under the
Agreement for the amount of the requested additional Commitments not provided by existing Lenders. Nothing
herein shall require any Lender to increase its Commitment without such Lender's express written consent given
in its sole discretion. In addition to the satisfaction of the foregoing conditions, each increase in the
Commitments pursuant to this Section 2.14 shall become effective upon the receipt by the Administrative Agent
of, as applicable (i) a joinder agreement by which each new Lender agrees to become a party to this Agreement
and (ii) written confirmation of its additional Commitment from each applicable existing Lender, in each case
in form and substance reasonably satisfactory to the Administrative Agent

                                                      25


                                                  ARTICLE III

                                     TAXES, YIELD PROTECTION AND ILLEGALITY

     Section 3.1. Taxes.

     (a)      Payments to be Free and Clear. All payments by each Borrower or any other Person under the Loan
Documents to or for the account of the Administrative Agent, or any Lender (each, an "Indemnified Tax Person")
shall be made free and clear of, and without any deduction or withholding for or on account of, any and all
current or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect
thereto (including interest, additions to tax, and penalties thereon) imposed, levied, collected, withheld or
assessed by the United States or any political subdivision or taxing authority thereof (collectively, "Taxes"),
excluding as to any Indemnified Tax Person, (i) a Tax on the Income imposed on such Indemnified Tax Person and
(ii) any interest, fees, additions to tax or penalties for late payment thereof (each such nonexcluded Tax, an
"Indemnified Tax"). For purposes hereof, "Tax on the Income" shall mean, as to any Person, a Tax imposed by one
of the following jurisdictions or by any political subdivision or taxing authority thereof: (i) the United
States, (ii) the jurisdiction in which such Person is organized, (iii) the jurisdiction in which such Person's
principal office is located, or (iv) in the case of each Lender, any jurisdiction in which such Lender's
applicable Lending Office is located; which Tax is an income tax or franchise tax imposed on all or part of the
net income or net profits of such Person or which Tax represents interest, fees, or penalties for late payment
of such an income tax or franchise tax.

     (b)      Grossing Up of Payments. If a Borrower or any other Person is required by law, rule, regulation,
order, directive, treaty or guideline to make any deduction or withholding (which deduction or withholding
would constitute an Indemnified Tax) from any amount required to be paid by it to or on behalf of an
Indemnified Tax Person under any Loan Document (i) it shall pay such Indemnified Tax before the date on which
penalties attach thereto, such payment to be made for its own account (if the liability to pay is imposed on
it) or on behalf of and in the name of such Indemnified Tax Person (if the liability is imposed on such
Indemnified Tax Person), and (ii) the sum payable to such Indemnified Tax Person shall be increased as may be
necessary so that after making all required deductions and withholdings (including deductions and withholdings
applicable to additional sums payable under this Section) such Indemnified Tax Person receives an amount equal
to the sum it would have received had no such deductions or withholdings been made.

     (c)      Other Taxes. Each Borrower or other Person agrees to pay any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment
made by it hereunder or from the execution, delivery or registration of, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, the Loan Documents or otherwise with respect
to, the Loan Documents (collectively, the "Other Taxes").

     (d)      Evidence of Payment. Within 30 days after the reasonable request therefor by the Administrative
Agent in connection with any payment of Indemnified Taxes or Other Taxes, the applicable Borrower or other
Person will furnish to the Administrative Agent the original or a

                                                      26


certified copy of an official receipt from the jurisdiction to which payment is made evidencing payment thereof
or, if unavailable, a certificate from a Responsible Officer that states that such payment has been made and
that sets forth the date and amount of such payment.

     (e)      U.S. Tax Certificates. Each Indemnified Tax Person that is organized under the laws of any
jurisdiction other than the United States or any political subdivision thereof that is exempt from United
States federal withholding tax, or that is subject to such tax at a reduced rate under an applicable treaty,
with respect to payments under the Loan Documents shall deliver to the Borrowers, on or prior to the Effective
Date (in the case of each Indemnified Tax Person listed on the signature pages hereof) or on the effective date
of the Assignment and Acceptance Agreement or other document pursuant to which it becomes an Indemnified Tax
Person (in the case of each other Indemnified Tax Person), and at such other times as the Borrowers or the
Administrative Agent may reasonably request, Internal Revenue Form W-8 ECI or Form W-8 BEN or other certificate
or document required under United States law to establish entitlement to such exemption or reduced rate. No
Borrower shall be required to pay any additional amount to any such Indemnified Tax Person under subsection (b)
above if such Indemnified Tax Person shall have failed to satisfy the requirements of the immediately preceding
sentence with respect to such Borrower; provided that if such Indemnified Tax Person shall have satisfied such
requirements on the Effective Date (in the case of each Indemnified Tax Person listed on the signature pages
hereof) or on the effective date of the Assignment and Acceptance Agreement or other document pursuant to which
it became an Indemnified Tax Person (in the case of each other Indemnified Tax Person), nothing in this
subsection shall relieve the Borrowers of their obligation to pay any additional amounts pursuant to subsection
(b) in the event that, as a result of any change in applicable law or treaty, such Indemnified Tax Person is no
longer properly entitled to deliver certificates, documents or other evidence at a subsequent date establishing
the fact that such Indemnified Tax Person is no longer entitled to such exemption or reduced rate.

     Section 3.2. Illegality.

     (a)      If any Lender determines that the introduction of any Requirement of Law, or any change in any
Requirement of Law, or in the interpretation or administration of any Requirement of Law, has made it unlawful,
or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Lender or
its applicable Lending Office to make Eurodollar Rate Loans, then, on notice thereof by the Lender to the
Borrowers through the Administrative Agent, any obligation of that Lender to make Eurodollar Rate Loans shall
be suspended until the Lender notifies the Administrative Agent and the Borrowers that the circumstances giving
rise to such determination no longer exist.

     (b)      If a Lender determines that it is unlawful to maintain any Eurodollar Rate Loan, the Borrowers
shall, upon receipt of notice of such fact and demand from such Lender (with a copy to the Administrative
Agent), prepay in full such Eurodollar Rate Loans of that Lender then outstanding, together with interest
accrued thereon and amounts required under Section 3.4, either on the last day of the Interest Period thereof,
if the Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if the
Lender may not lawfully continue to maintain such Eurodollar Rate Loan. If a Borrower is required to so prepay
any Eurodollar Rate Loan, then concurrently with such prepayment, such Borrower shall borrow from the affected
Lender, in the amount of such repayment, a Base Rate Loan.

                                                      27


     Section 3.3. Increased Costs and Reduction of Return.

     (a)      If any Lender determines that, due to either (i) the introduction of or any change (other than
any change by way of imposition of or increase in reserve requirements included in the calculation of the
Eurodollar Rate or in respect of the assessment rate payable by any Lender to the FDIC for insuring U.S.
deposits) in or in the interpretation of any law or regulation or (ii) the compliance by that Lender with any
guideline or request from any central bank or other Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to such Lender of agreeing to make or making, funding or
maintaining any Eurodollar Rate Loans, then the Borrowers shall be liable for, and shall from time to time,
upon demand (with a copy of such demand to be sent to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender, additional amounts as are sufficient to compensate such Lender for such
increased costs.

     (b)      If any Lender shall have determined that (i) the introduction of any Capital Adequacy Regulation,
(ii) any change in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Lender (or its Lending Office) or any
corporation controlling the Lender with any Capital Adequacy Regulation, affects or would affect the amount of
capital required or expected to be maintained by the Lender or any corporation controlling the Lender and
(taking into consideration such Lender's or such corporation's policies with respect to capital adequacy and
such Lender's desired return on capital) determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits or obligations under this Agreement, then, upon demand of such
Lender to the Parent through the Administrative Agent, the Parent shall pay to the Lender, from time to time as
specified by the Lender, additional amounts sufficient to compensate the Lender for such increase.

     Section 3.4. Funding Losses. Each Borrower shall reimburse each Lender and hold each Lender harmless
from any loss or expense which the Lender may sustain or incur as a consequence of:

     (a)      the failure of such Borrower to make on a timely basis any payment of principal of any Eurodollar
Rate Loan;

     (b)      the failure of such Borrower to borrow, continue or convert a Loan after such Borrower has given
(or is deemed to have given) a Notice of Borrowing or a Notice of Conversion/Continuation;

     (c)      the failure of such Borrower to make any prepayment in accordance with any notice delivered under
Section 2.6;

     (d)      the prepayment or other payment (including after acceleration thereof) of an Eurodollar Rate Loan
on a day that is not the last day of the relevant Interest Period; or

     (e)      the automatic conversion under Section 2.4 of any Eurodollar Rate Loan to a Base Rate Loan on a
day that is not the last day of the relevant Interest Period;

                                                      28


including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to
maintain its Eurodollar Rate Loans or from fees payable to terminate the deposits from which such funds were
obtained. For purposes of calculating amounts payable by the Borrowers to the Lenders under this Section and
under Section 3.3(a), each Eurodollar Rate Loan made by a Lender (and each related reserve, special deposit or
similar requirement) shall be conclusively deemed to have been funded at the LIBOR Rate used in determining the
Eurodollar Rate for such Eurodollar Rate Loan by a matching deposit or other borrowing in the interbank
eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan
is in fact so funded.

     Section 3.5. Inability to Determine Rates. If the Majority Lenders determine that for any reason adequate
and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with
respect to a proposed Eurodollar Rate Loan, or that the Eurodollar Rate applicable pursuant to Section 2.8(a)
for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to the Lenders of funding such Eurodollar Rate Loan, the Administrative Agent will
promptly so notify the Borrowers and each Lender. Thereafter, the obligation of the Lenders to make or maintain
Eurodollar Rate Loans, as the case may be, hereunder shall be suspended until the Administrative Agent upon the
instruction of the Majority Lenders revokes such notice in writing. Upon receipt of such notice, each Borrower
may revoke any Notice of Borrowing or Notice of Conversion/Continuation with respect to any Loans then
submitted by it. If the applicable Borrower does not revoke such Notice, the Lenders shall make, convert or
continue the Loans, as proposed by such Borrower, in the amount specified in the applicable notice submitted by
the applicable Borrower, but such Loans shall be made, converted or continued as Base Rate Loans instead of
Eurodollar Rate Loans.

     Section 3.6. Certificates of Lenders. Any Lender or Agent claiming reimbursement or compensation under
this Article III shall deliver to the applicable Borrower (with a copy to the Administrative Agent) a
certificate setting forth in reasonable detail the amount payable to the Lender or Agent hereunder and such
certificate shall be conclusive and binding on such Borrower in the absence of manifest error.

     Section 3.7. Survival. The agreements and obligations of the Borrowers in this Article III shall survive
the payment of all other Obligations.


                                                   ARTICLE IV

                                              CONDITIONS PRECEDENT

     Section 4.1. Conditions of Initial Loans. The obligation of each Lender to make its initial Loan hereunder
is subject to the following conditions:

     (a)      The Administrative Agent shall have received on or before the initial Borrowing Date all of the
following, in form and substance satisfactory to the Administrative Agent and each Lender, and in sufficient
copies for each Lender (except for the Notes (of which only the originals shall be signed)):

                                                      29


          (i)      Credit Agreement. This Agreement executed by each party hereto;

          (ii)     Notes. The Notes (if any);

          (iii)    Resolutions; Incumbency.

          (A)      Copies of the resolutions of the board of directors of each of the Parent, PLIC and PXP
     authorizing the transactions contemplated hereby, certified as of the Effective Date by the Secretary or
     an Assistant Secretary of each of them; and

          (B)      A certificate of the Secretary or Assistant Secretary of each of the Parent, PLIC and PXP
     certifying the names and true signatures of those of their officers authorized to execute, deliver and
     perform, as applicable, this Agreement, and all other Loan Documents to be delivered by them hereunder;

          (iv)     Organization Documents; Good Standing. Each of the following documents:

          (A)      the articles or certificate of incorporation and the bylaws of each of the Parent, PLIC and
     PXP as in effect on the Effective Date, certified by the Secretary or Assistant Secretary of each of them
     as of the Effective Date; and

          (B)      a good standing certificate for each of the Parent, PLIC and PXP from the Secretary of State
     (or similar, applicable Governmental Authority) of its state of incorporation and a good standing
     certificate for PLIC from the Insurance Department of the State of New York;

          (v)      Legal Opinions.

          (A)      An opinion of independent outside counsel to PXP, PLIC and the Parent and addressed to the
     Agents and the Lenders, in form and substance reasonably satisfactory to the Administrative Agent; and

          (B)      An opinion of internal counsel to PXP, PLIC and the Parent and addressed to the Agents and
     the Lenders, in form and substance reasonably satisfactory to the Administrative Agent.

          (vi)     Certificate. A certificate signed by a Responsible Officer of each of the Parent, PLIC and
     PXP, dated as of the Effective Date, stating that:

          (A)      the representations and warranties contained in Article V are true and correct on and as of
     such date, as though made on and as of such date;

          (B)      no Default or Event of Default exists or would result from the initial Borrowing;

                                                      30


          (C)      there has occurred since December 31, 2003, no event or circumstance that has resulted or
     could reasonably be expected to result in a Material Adverse Effect; and

          (D)      all material third party approvals and consents necessary in connection with the execution
     and delivery by each of the Parent, PLIC and PXP of the Loan Documents to which it is a party, and the
     performance by each of the Parent, PLIC and PXP of its obligations under the Loan Documents shall have
     been obtained and remain in effect and any applicable waiting periods shall have expired.

          (vii)    Payment of Fees. Evidence that the arrangement fee, agency fees and other fees due to the
     Agents, the Arranger and the Lenders by the Parent, PLIC and/or PXP on or before the date hereof have been
     paid.

          (viii)   Other Documents. Such other approvals, opinions, documents or materials as the
Administrative Agent or any Lender may request.

     (b)      The commitments to extend credit under the Existing Credit Agreement shall have been terminated
and the principal of and interest on all loans outstanding thereunder, together with all accrued and unpaid
commitment and/or facility fees, shall have been paid in full (it being acknowledged that such a repayment may
be out of the proceeds of the initial Borrowing hereunder). Each Lender party hereto which is also a party to
the Existing Credit Agreement hereby waives any requirements set forth in the Existing Credit Agreement to
which it is a party for prior notice of the termination of the commitments thereunder and/or the repayment of
the loans and/or fees due thereunder to the extent, but only to the extent, that the termination of such
commitments and/or the repayment of such loans is occurring substantially concurrently with this Agreement
becoming effective. The foregoing waivers shall not (i) constitute a waiver of any condition or requirement of
any Existing Credit Agreement that payments of principal or interest be received by a certain time on the date
of payment in order to avoid the imposition of additional interest for the payment date and for any
non-business days immediately following the payment date and (ii) the foregoing waiver shall not preclude the
right of the banks party to the Existing Credit Agreement to be compensated, in accordance with the terms of
the Existing Credit Agreement, for any loss, cost or expense (including loss of profit) incident to the
prepayment of the loans outstanding thereunder which bears interest at a fixed rate and which is being prepaid
on a day other than a date which, pursuant to the terms of the applicable Existing Credit Agreement, would
avoid the requirement that the applicable Borrower reimburse such banks for such losses, costs or expenses.

     Section 4.2. Conditions to All Borrowings. The obligation of each Lender to make any Loan to be made
by it (including its initial Loan) is subject to the satisfaction of the following conditions precedent on the
relevant Borrowing Date:

     (a)      Notice of Borrowing. The Administrative Agent shall have received a Notice of Borrowing;

     (b)      Continuation of Representations and Warranties. The representations and warranties in Article V
shall be true and correct on and as of such Borrowing Date with the same

                                                      31


effect as if made on and as of such Borrowing Date (except to the extent such representations and warranties
expressly refer to an earlier date); and

     (c)      No Existing Default. No Event of Default or Default shall exist or shall result from such
Borrowing.

Each Notice of Borrowing submitted hereunder shall constitute a representation and warranty by the applicable
Borrower hereunder, as of the date of each such notice and as of each Borrowing Date, that the conditions in
Section 4.2(b) are satisfied.


                                                   ARTICLE V

                                         REPRESENTATIONS AND WARRANTIES

         The Parent, PLIC and PXP represent and warrant to each Agent and each Lender that as of the Effective
Date and at all times thereafter except to the extent that any representation or warranty herein expressly
refers only to a certain date:

     Section 5.1. Corporate Existence and Power. The Parent, PLIC, PXP and each of their Subsidiaries:

     (a)      is a corporation duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation;

     (b)      has the power and authority and all governmental licenses, authorizations, consents and approvals
to own its assets, carry on its business and to execute, deliver, and perform its obligations under the Loan
Documents;

     (c)      is duly qualified as a foreign  corporation and is licensed and in good standing under the laws
of each jurisdiction where its ownership, lease or operation of property or the conduct of its business
requires such qualification or license; and

     (d)      is in compliance with all Requirements of Law; except, in each case referred to in clause (c) or
clause (d), to the extent that the failure to do so could not reasonably be expected to have a Material Adverse
Effect.

     Section 5.2. Corporate Authorization; No Contravention. The execution, delivery and performance by
the Parent, PLIC, PXP and their Subsidiaries of this Agreement and each other Loan Document to which such
Person is party, and each Borrowing hereunder, have been duly authorized by all necessary corporate action, and
do not and will not:

     (a)      contravene the terms of any of that Person's Organization Documents;

     (b)      conflict with or result in any breach or contravention of, or the creation of any Lien under, any
document evidencing any Contractual Obligation to which such Person is a party or any order, injunction, writ
or decree of any Governmental Authority to which such Person or its property is subject; or

                                                      32


     (c)      violate any Requirement of Law.

     Section 5.3. Governmental Authorization. No approval, consent, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental Authority is necessary or required in connection with
the execution, delivery or performance by, or enforcement against, the Parent, PLIC, PXP or any of their
Subsidiaries of this Agreement or any other Loan Document, except filings made prior to the date hereof and
other filings which will be made as required by law.

     Section 5.4. Binding Effect. This Agreement and each other Loan Document to which any of the Parent,
PLIC or PXP is a party constitutes the legal, valid and binding obligations of such Person, enforceable against
such Person in accordance with their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.

     Section 5.5. Litigation. There are no actions, suits, proceedings, claims or disputes pending, or to
the best knowledge of any of the Parent, PLIC or PXP threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Parent, PLIC or PXP or any of their Subsidiaries
or any of their respective properties which:

     (a)      purport to affect or pertain to this Agreement or any other Loan Document, or any of the
transactions contemplated hereby or thereby; or

     (b)      as to which there exists a reasonable possibility of an adverse determination, which
determination would reasonably be expected to have a Material Adverse Effect. No injunction, writ, temporary
restraining order or any order of any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any other Loan
Document, or directing that the transactions provided for herein or therein not be consummated as herein or
therein provided.

     Section 5.6. Contractual Obligation. As of the Effective Date neither the Parent, PLIC, PXP nor any
Subsidiary of any of them is or will be in default under or with respect to any Contractual Obligation in any
respect which, individually or together with all such defaults, could reasonably be expected to have a Material
Adverse Effect.

     Section 5.7. ERISA Compliance.

     (a)      Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the
Code and other federal or state law. The Parent, PLIC, PXP and each ERISA Affiliate has made all required
contributions to any Pension Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to
any Pension Plan.

     (b)      There are no pending or, to the best knowledge of the Parent, PLIC or PXP, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to any Plan which has resulted or
could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction
or violation of the fiduciary responsibility rules

                                                      33


with respect to any Pension Plan which has resulted or could reasonably be expected to result in a Material
Adverse Effect.

     (c)      (i)      No ERISA Event has occurred or is reasonably expected to occur; (ii) except as disclosed
on Schedule 5.7(c) hereto, no Pension Plan has any Unfunded Pension Liability; (iii) neither the Parent, PLIC,
PXP nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Parent, PLIC, PXP nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result
in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither
the Parent, PLIC, PXP nor any ERISA Affiliate has engaged in a transaction that could be subject to Section
4069 or 4212(c) of ERISA.

     Section 5.8. Use of Proceeds; Margin Regulations. The proceeds of the Loans are to be used solely for
the purposes set forth in and permitted by Section 6.12 and Section 7.6. Neither the Parent, PLIC, PXP nor any
Subsidiary of any of them is generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.

     Section 5.9. Title to Properties. The Parent, PLIC, PXP and their Subsidiaries have good record and
marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the
ordinary conduct of their respective businesses, except for such defects in title as could not, individually or
in the aggregate, have a Material Adverse Effect. As of the Effective Date, the property of the Parent, PLIC,
PXP and their Subsidiaries is and will be subject to no Liens, other than Permitted Liens.

     Section 5.10. Taxes. The Parent, PLIC, PXP and their Subsidiaries have filed all Federal and other
material tax returns and reports required to be filed, and have paid all Federal and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance with GAAP. There is no proposed
tax assessment against the Parent, PLIC, PXP or any of their Subsidiaries that would, if made, have a Material
Adverse Effect. In addition, the Borrowers have no present intention to treat any Loan, or any transactions
related to the Loans, as part of a transaction that is subject to Treasury Regulation Section 1.6011-4 or
Section 301.6112-1.

     Section 5.11. Financial Condition.

     (a)      The statutory financial statements of PLIC and its Primary Insurance Subsidiaries dated December
31, 2003 and the related statements of income or operations, surplus or capital and surplus and cash flows for
the fiscal periods ended on those dates:

          (i)      were prepared in accordance with SAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein;

                                                      34


          (ii)     fairly present the financial condition of PLIC and its Primary Insurance Subsidiaries as of
the date thereof and results of operations for the period covered thereby; and

          (iii)    show all material indebtedness and other liabilities, direct or contingent, of PLIC and its
Primary Insurance Subsidiaries as of the date thereof, including liabilities for taxes, material commitments
and Contingent Obligations.

     (b)      The audited consolidated financial statements of the Parent and its Subsidiaries dated December
31, 2003 and the unaudited, interim consolidated financial statements of the Parent and its Subsidiaries dated
September 30, 2004, and the related consolidated statements of income or operations, shareholders' equity and
cash flows for the fiscal periods ended on those dates:

          (i)      were prepared in accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein;

          (ii)     fairly present the financial condition of the Parent and its Subsidiaries as of the date
thereof and results of operations for the period covered thereby; and

          (iii)    show all material indebtedness and other liabilities, direct or contingent, of the Parent
and its consolidated Subsidiaries as of the date thereof, including liabilities for taxes, material commitments
and Contingent Obligations.

     Section 5.12. Environmental Matters. The Parent, PLIC, PXP and their Subsidiaries (i) are in
compliance with any and all applicable Environmental Laws, (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in
the aggregate, have a Material Adverse Effect.

     Section 5.13. Regulated Entities. The Parent, PLIC and PXP are not subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, any state
public utilities code, or any other Federal or state statute or regulation limiting their ability to incur
Indebtedness. No filings, approvals or consents are required under the Investment Company Act of 1940 for the
enforceability of this Agreement or any other Loan Document.

     Section 5.14. No Burdensome Restrictions. Neither the Parent, PLIC, PXP nor any Subsidiary of any of
them is a party to or bound by any Contractual Obligation, or subject to any restriction in any Organization
Document, or any Requirement of Law, which could reasonably be expected to have a Material Adverse Effect.

     Section 5.15. Copyrights, Patents, Trademarks and Licenses, Etc. The Parent, PLIC, PXP and their
Subsidiaries own or are licensed or otherwise have the right to use all of the patents, trademarks, service
marks, trade names, copyrights, contractual franchises, authorizations and other rights that are reasonably
necessary for the operation of their respective

                                                      35


businesses, without conflict with the rights of any other Person. To the best knowledge of the Parent, PLIC and
PXP, no slogan or other advertising device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by the Parent, PLIC and PXP or any Subsidiary thereof infringes
upon any rights held by any other Person. No claim or litigation regarding any of the foregoing is pending or
threatened, and no patent, invention, device, application, principle or any statute, law, rule, regulation,
standard or code is pending or, to the knowledge of the Parent, PLIC and PXP, proposed, which, in either case,
could reasonably be expected to have a Material Adverse Effect.

     Section 5.16. Subsidiaries PLIC and PXP are Wholly Owned Subsidiaries of the Parent. As of the date
hereof the Primary Subsidiaries are as identified on Schedule 5.16.

     Section 5.17. Insurance The properties of the Parent, PLIC, PXP and their Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of the Parent, PLIC or PXP, in such
amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where the Parent, PLIC, PXP or any such
Subsidiary operates.

     Section 5.18. Full Disclosure None of the representations or warranties made by the Parent, PLIC or
PXP in the Loan Documents as of the date such representations and warranties are made or deemed made, and none
of the statements contained in any exhibit, report, statement or certificate furnished by or on behalf of the
Parent, PLIC or PXP in connection with the Loan Documents (including the offering and disclosure materials
delivered by or on behalf of the Parent, PLIC or PXP to the Lenders prior to the Effective Date), contains any
untrue statement of a material fact or omits any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they are made, not misleading as of
the time when made or delivered.

     Section 5.19. Compliance. The Parent, PLIC, PXP and each of their Subsidiaries is in compliance with
all applicable laws and regulations, all applicable ordinances, decrees, requirements, orders and judgments of,
and all of the terms of any applicable licenses and permits issued by, any governmental body, agency or
official, and all agreements and instruments to which it may be subject or any of its properties may be bound,
in each case where the violation thereof may have a Material Adverse Effect.

     Section 5.20. OFAC; PATRIOT Act.

     (a)      Neither the Parent, PLIC, PXP nor any of their Subsidiaries: (i) is a person named on the list of
Specially Designated Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or as otherwise published from time to time; or (ii)
is (A) an agency of the government of a country, (B) an organization controlled by a country, or (C) a person
resident in a country that is subject to a sanctions program identified on the list maintained by OFAC and
available at http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html, or as otherwise published from
time to time, as such program may be applicable to such agency, organization or person; or (iii) derives more
than 15% of its assets or operating income from investments in or transactions with any such country, agency,
organization or person; and (iv) none of the proceeds from any Loan will be used to finance any operations,

                                                      36


investments or activities in, or make any payments to, any such country, agency, organization, or person.

     (b)      The Parent, PLIC, PXP and each of their Subsidiaries are in compliance in all material respects
with the PATRIOT Act. No part of the proceeds of the Loans hereunder shall be used, directly or indirectly, for
any payments to any governmental official or employee, political party, official of a political party,
candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices
Act of 1977, as amended.


                                                  ARTICLE VI

                                             AFFIRMATIVE COVENANTS

         From and after the Effective Date and so long as any Lender shall have any Commitment hereunder, or
any Loan or other Obligation shall remain unpaid or unsatisfied, unless the Majority Lenders waive compliance
in writing:

     Section 6.1. Financial Statements. The Parent or PLIC shall deliver to the Administrative Agent,
in form and detail satisfactory to the Administrative Agent and the Majority Lenders, with sufficient copies
for each Lender:

     (a)      as soon as available, but not later than 120 days after the end of each fiscal year, a copy of
the audited consolidated balance sheets of the Parent and its Subsidiaries as at the end of such year and the
related consolidated statements of income or operations, shareholders' equity and cash flows for such year,
setting forth in each case in comparative form the figures for the previous fiscal year, and accompanied by the
opinion of PricewaterhouseCoopers or another nationally-recognized independent public accounting firm
("Independent Auditor") which report shall state that such consolidated financial statements present fairly the
financial position for the periods indicated in conformity with GAAP applied on a basis consistent with prior
years. Such opinion shall not be qualified or limited because of a restricted or limited examination by the
Independent Auditor of any material portion of the Parent's or any Subsidiary's records;

     (b)      as soon as available, but not later than 60 days after the end of each of the first three fiscal
quarters of each fiscal year, a copy of the unaudited interim consolidated balance sheets of the Parent and its
Subsidiaries and of PXP and its Subsidiaries as of the end of such quarter and the related interim consolidated
statements of income, shareholders' equity and cash flows for the period commencing on the first day and ending
on the last day of such quarter, and certified by a Responsible Officer of the Parent and PXP (as applicable)
as fairly presenting, in accordance with GAAP (subject to ordinary, good faith year-end audit adjustments), the
financial positions and the results of operations of the Parent and its Subsidiaries, and of PXP and its
Subsidiaries;

     (c)      as soon as available, but not later than 120 days after the end of each fiscal year, (i) a copy
of the Annual Statement of PLIC for such fiscal year prepared in accordance with SAP and accompanied by the
certification of a Responsible Officer of PLIC that such Annual Statement presents fairly in accordance with
SAP the financial position of PLIC for the period

                                                      37



then ended and (ii) a copy of the unaudited consolidated balance sheet of PXP and its Subsidiaries as of the
end of such year and the related consolidated statements of income, shareholders' equity and cashflows for the
period commencing on the first day of such fiscal year and ending on the last day thereof and certified by a
Responsible Officer of PXP as fairly presenting, in accordance with GAAP, the financial positions and results
of operations of PXP and its Subsidiaries;

     (d)      as soon as possible, but no later than 60 days after the end of each of the first three fiscal
quarters of each fiscal year, a copy of the quarterly statement of PLIC for each such fiscal quarter, all
prepared in accordance with SAP and accompanied by the certification of a Responsible Officer of PLIC that all
such quarterly statements present fairly in accordance with SAP the financial position of PLIC for the period
then ended;

     (e)      as soon as available, a copy of PLIC's "Statement of Actuarial Opinion" which is provided to the
Department (or equivalent information should the Department no longer require such a statement) as to the
adequacy of policyholder reserves of PLIC, which opinion shall be in the format prescribed by the Insurance
Code; and

     (f)      as soon as available, a copy of the "Management Discussion and Analysis" filed with the
Department with respect to any of the foregoing financial statements and such other information.

     Section 6.2. Certificates; Other Information. The Parent or PLIC shall furnish to the Administrative
Agent, with sufficient copies for each Lender:

     (a)      concurrently with the delivery of the financial statements referred to in Sections 6.1(a) and
(b), a Compliance Certificate executed by a Responsible Officer of the Parent;

     (b)      promptly, copies of all financial statements and reports that the Parent or PLIC sends to its
policyholders or shareholders, and copies of all financial statements and regular, periodical or special
reports that the Parent or any Subsidiary may make to, or file with, the SEC other than filings made on behalf
of Persons which are not Subsidiaries of the Parent, PLIC or PXP and filings made in connection with investment
advisory, mutual fund and/or asset management activities;

     (c)      promptly, upon a change in any rating referred to in the definition of the term "Applicable
Percentage", written notice of such change by a Responsible Officer; and

     (d)      promptly, such additional information regarding the business, financial or corporate affairs of
the Parent, PLIC, PXP or any Subsidiary of any of them as the Administrative Agent, at the request of any
Lender, may from time to time reasonably request.

     Section 6.3. Notices. The Borrowers shall promptly notify the Administrative Agent and each Lender:

                                                      38


     (a)      of the occurrence of any Default or Event of Default and of the occurrence or existence of any
event or circumstance that foreseeably will become a Default or Event of Default;

     (b)      of any matter that has resulted or may result in a Material Adverse Effect, including (i) breach
or non-performance of, or any default under, a Contractual Obligation of the Parent, PLIC, PXP or any
Subsidiary of any of them; (ii) any dispute, litigation, investigation, proceeding or suspension between the
Parent, PLIC or PXP or any Subsidiary thereof and any Governmental Authority; or (iii) the commencement of, or
any material development in, any litigation or proceeding affecting the Parent, PLIC, PXP or any Subsidiary
thereof; including pursuant to any applicable Environmental Laws;

     (c)      of the occurrence of any of the following events affecting the Parent, PLIC or PXP or any ERISA
Affiliate (but in no event more than 10 days after such event), and deliver to the Administrative Agent and
each Lender a copy of any notice with respect to such event that is filed with a Governmental Authority and any
notice delivered by a Governmental Authority to the Parent or any ERISA Affiliate with respect to such event:

          (i)      an ERISA Event;

          (ii)     a material increase in the Unfunded Pension Liability of any Pension Plan;

          (iii)    the adoption of, or the commencement of contributions to, any Pension Plan subject to
Section 412 of the Code by the Parent or any ERISA Affiliate; or

          (iv)     the adoption of any amendment to a Pension Plan subject to Section 412 of the Code, if such
amendment results; in a material increase in contributions or Unfunded Pension Liability;

     (d)      of any material change in accounting policies or financial reporting practices by the Parent,
PLIC, PXP or any of their Primary Subsidiaries;

     (e)      of the intention of any Borrower to take any action that is inconsistent with the representations
contained in the last sentence of Section 5.10 hereof; and

     (f)      of any Acquisition by the Parent, PLIC, PXP or any of their Subsidiaries, the total consideration
for which shall exceed $25,000,000 (or its equivalent in any other currency), together with pro forma financial
statements giving effect to such Acquisition but subject to the requirements of any applicable confidentiality
agreement.

         Each notice under this Section shall be accompanied by a written statement by a Responsible Officer of
the Parent, PLIC or PXP setting forth details of the occurrence referred to therein, and stating what action
the Parent, PLIC, PXP or any affected Subsidiary proposes to take with respect thereto and at what time. Each
notice under Sections 6.3(a) or 6.3(b) shall describe with particularity any and all clauses or provisions of
this Agreement or other Loan Document that have been (or foreseeably will be) breached or violated.

                                                      39


     Section 6.4. Preservation of Corporate Existence, Etc. The Parent, PLIC and PXP each shall, and shall
cause each of their respective Subsidiaries to:

     (a)      preserve and maintain in full force and effect its corporate existence and good standing under
the laws of its state or jurisdiction of incorporation;

     (b)      preserve and maintain in full force and effect all governmental rights, privileges,
qualifications, permits, licenses and franchises necessary or desirable in the normal conduct of its business;

     (c)      use reasonable efforts, in the ordinary course of business, to preserve its business organization
and goodwill; and

     (d)      preserve or renew all of its registered patents, trademarks, trade names and service marks, the
nonpreservation of which could reasonably be expected to have a Material Adverse Effect.

         The foregoing provisions of this Section 6.4 shall not restrict or prohibit the liquidation or
dissolution of any Subsidiary (other than a Borrower) which is inactive or whose continued existence is not
necessary to the continued operation of the businesses of the Parent, PLIC, PXP and their Subsidiaries taken as
a whole.

     Section 6.5. Maintenance of Property. The Parent, PLIC and PXP each shall maintain, and shall cause
each of their respective Subsidiaries to maintain, and preserve all its property which is used or useful in its
business in good working order and condition, ordinary wear and tear excepted.

     Section 6.6. Insurance. The Parent, PLIC and PXP each shall maintain, and shall cause each of their
respective Subsidiaries to maintain, with financially sound and reputable independent insurers, insurance with
respect to its properties and business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried
under similar circumstances by such other Persons.

     Section 6.7. Payment of Obligations. The Parent, PLIC and PXP each shall, and shall cause each of
their respective Subsidiaries to, pay and discharge as the same shall become due and payable, all their
respective obligations and liabilities, including:

     (a)      all tax liabilities, assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the applicable Person;

     (b)      all lawful claims which, if unpaid, would by law become a Lien upon its property; and

     (c)      all indebtedness, as and when due and payable, but subject to any subordination provisions
contained in any instrument or agreement evidencing such Indebtedness.

                                                      40


     Section 6.8. Compliance with Laws. The Parent, PLIC and PXP shall each comply, and shall cause each
of their respective Subsidiaries to comply, in all material respects with all Requirements of Law of any
Governmental Authority having jurisdiction over it or its business (including the Federal Fair Labor Standards
Act), except such as may be contested in good faith or as to which a bona fide dispute may exist.

     Section 6.9. Compliance with ERISA. The Parent, PLIC and PXP each shall, and shall cause each of its
ERISA Affiliates to: (a) maintain each Plan in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state law; (b) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such qualification; and (c) make all required contributions to any
Pension Plan subject to Section 412 of the Code.

     Section 6.10. Inspection of Property and Books and Records. The Parent, PLIC and PXP shall each
maintain, and shall cause each of their respective Subsidiaries to maintain, proper books of record and
account, in which full, true and correct entries in conformity with GAAP or SAP, as applicable, consistently
applied shall be made of all financial transactions and matters involving the assets and business of the
Parent, PLIC and PXP and each such Subsidiary. The Parent, PLIC, PXP shall each permit, and shall cause each of
their respective Subsidiaries to permit, representatives and independent contractors of the Administrative
Agent or any Lender to visit and inspect any of their respective properties, to examine their respective
corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss
their respective affairs, finances and accounts with their respective directors, officers, and independent
public accountants, all at the expense of the applicable Person if a Default or Event of Default has occurred
and is continuing and at such reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the applicable Person; provided, however, when an Event of Default
or Default exists the Administrative Agent or any Lender may do any of the foregoing during normal business
hours and without advance notice.

     Section 6.11. Environmental Laws. The Parent, PLIC and PXP shall each, and shall cause each of their
respective Subsidiaries to, conduct its operations and keep and maintain its property in compliance with all
Environmental Laws.

     Section 6.12. Use of Proceeds. The Borrowers shall use the proceeds of the Loans (i) to refinance any
indebtedness outstanding under the Existing Credit Facility and (ii) for working capital and other general
corporate purposes; provided, however, that such proceeds shall not be used for any Acquisition if the board of
directors of the entity to be acquired shall not have approved such Acquisition.

     Section 6.13. PATRIOT Act Compliance. Each of the Parent, PLIC and PXP shall, and shall cause each of
their Subsidiaries to, provide, to the extent commercially reasonable, such information and take such actions
as are reasonably requested by the Administrative Agent or any Lender in order to assist the Administrative
Agent and the Lenders in maintaining compliance with the PATRIOT Act.

                                                      41


                                                  ARTICLE VII

                                               NEGATIVE COVENANTS

         From and after the Effective Date and so long as any Lender shall have any Commitment hereunder, or
any Loan or other Obligation shall remain unpaid or unsatisfied, unless the Majority Lenders waive compliance
in writing:

     Section 7.1. Limitation on Liens. The Parent, PLIC and PXP shall not, and shall not suffer or permit
any Subsidiary to, directly or indirectly, make, create, incur, assume or suffer to exist any Lien upon or with
respect to any part of its property, whether now owned or hereafter acquired or lease any property previously
owned by any of them other than the following ("Permitted Liens"):

     (a)      any Lien existing on property of the Parent, PLIC, PXP or any Subsidiary on the Effective Date
and set forth in Schedule 7.1 securing Indebtedness outstanding on such date;

     (b)      any Lien created under any Loan Document;

     (c)      Liens for taxes, fees, assessments or other governmental charges which are not delinquent or
remain payable without penalty, or to the extent that non-payment thereof is permitted by Section 6.7, provided
that no notice of lien has been filed or recorded under the Code;

     (d)      carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other similar
Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty;

     (e)      Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the
ordinary course of business in connection with workers' compensation, unemployment insurance and other social
security legislation;

     (f)      Liens consisting of judgment or judicial attachment liens, provided that the enforcement of such
Liens is effectively stayed and all such liens in the aggregate at any time outstanding for the Parent, PLIC,
PXP and their Subsidiaries do not exceed $50,000,000 (or its equivalent in any other currency);

     (g)      easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the
businesses of the Parent, PLIC, PXP and their Subsidiaries;

     (h)      Liens arising solely by virtue of any statutory or common law provision relating to banker's
liens, securities intermediary's liens, rights of set-off or similar rights and remedies as to deposit
accounts, securities accounts or other funds maintained with a creditor depository institution; provided that
(i) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against
access by the Parent, PLIC, PXP or the applicable Subsidiary in excess of those set forth by regulations
promulgated by the FRB, and (ii) such deposit account or

                                                      42


securities account is not intended by the Parent, PLIC, PXP or any Subsidiary to provide collateral to the
depository institution providing such account;

     (i)      Liens securing obligations under Swap Contracts of the Parent and/or its Subsidiaries entered
into in the ordinary course of business and not for speculation; and

     (j)      additional Liens securing: (A) Indebtedness and sale/leaseback transactions (other than the sale
and leaseback transactions referred to in clause (B) below) not in excess of $25,000,000 (or its equivalent in
any other currency) in the aggregate for all such Indebtedness and sale/leaseback transactions at any time
outstanding; and (B) sale/leaseback transactions not in excess of $35,000,000 (or its equivalent in any other
currency) in the aggregate for all such sale/leaseback transactions at any time outstanding relating to the
real property located at One American Row, Hartford, Connecticut and 56 Prospect Street, Hartford, Connecticut.

         For purposes of this Agreement, Liens on property held in a segregated separate account established
pursuant to the New York Insurance Code for the benefit of specified classes of policyholders, annuitants or
other third parties and securing Indebtedness for which the Parent, PLIC, PXP and their Subsidiaries have no
personal liability shall not be treated as a Lien upon the property of the Parent, PLIC, PXP or their
Subsidiaries nor shall such indebtedness be treated as Indebtedness thereof. In no event shall any Borrower
permit any Liens to exist on the assets of the closed block of business of PLIC for securitization purposes or
otherwise.

     Section 7.2. Mergers, Consolidations and Sales of Assets. The Parent, PLIC and PXP will not, and will
not permit any Primary Subsidiary to:

     (a)      consolidate with or be a party to a merger with any other Person or

     (b)      sell, lease or otherwise dispose of any substantial part of its assets provided that the
foregoing shall not apply to or operate to prevent (i) either (A) reinsurance and similar risk sharing
arrangements entered into in the ordinary course of business, or (B) reinsurance arrangements with respect to a
whole block of business, (ii) sales or other dispositions of assets acquired in satisfaction of obligations
owing the Parent, PLIC, PXP or a Primary Subsidiary, (iii) mergers of a Subsidiary with and into a Borrower and
other mergers of a Subsidiary not involving the Parent, PLIC or PXP, (iv) mergers constituting Acquisitions
which are permitted by Section 7.3(d) hereof, (v) the sale of all or any substantial part of the assets of, or
of the equity interests held by any of the Parent, PLIC or PXP in, any Subsidiary which is not a Borrower, (vi)
the sale of any partnership or similar interest by PXP, or (vii) the sale and leaseback of the real property
located at One American Row, Hartford, Connecticut or the sale and leaseback of the real property located at 56
Prospect Street, Hartford, Connecticut, so long as in the case of each of the matters described in clauses (i)
through (vi) above, no Default or Event of Default shall have occurred and be continuing or would occur as a
result thereof. Nothing herein contained shall be deemed to permit any transaction which constitutes a Change
of Control. PXP will not be or become a direct or indirect Subsidiary of PLIC or of any other person, firm or
corporation primarily engaged in the business of insurance or banking. All net proceeds from dispositions
permitted in clauses (i)(B), (v) and (vi) above shall be applied in accordance with the provisions of Section
2.6(b)(v) hereof. All net proceeds from the dispositions permitted in clause (vii) above shall be applied in
accordance with the provisions of Section 2.6(b)(iii) hereof.

                                                      43


     (c)      sell, transfer or otherwise dispose of the closed block of business of PLIC, provided that the
foregoing shall not apply to or operate to prevent (i) inter-company transactions among the Parent, PLIC and
PXP relating to the closed block of business of PLIC but only to the extent that such transactions would also
be permitted under Section 7.5 hereof, or (ii) PLIC from entering into co-insurance, modified co-insurance or
yearly renewable term re-insurance agreements with regard to the closed block of business of PLIC provided such
agreements are not for financing or securitization purposes.

     Section 7.3. Loans and Investments. The Parent, PLIC and PXP shall not purchase or acquire, or suffer
or permit any Subsidiary to purchase or acquire, or make any commitment therefor, any capital stock, equity
interest, or any obligations or other securities of, or any interest in, any Person or make or commit to make
any Acquisitions, or make or commit to make any advance, loan, extension of credit or capital contribution to
or any other investment in, any Person including any Affiliate of the Parent, PLIC or PXP, except for:

     (a)      investments in cash equivalents;

     (b)      investments by PLIC and other Subsidiaries primarily engaged in the business of insurance in
compliance with all applicable regulatory requirements;

     (c)      investments by PXP in the ordinary course of business consistent with past practices; and

     (d)      Acquisitions, so long as after giving effect thereto (i) the general nature of the business which
would then be engaged in by the Parent, PLIC, PXP and their Subsidiaries would not be substantially changed
from the general nature of the business engaged in by PLIC, PXP and their Subsidiaries on the date of this
Agreement, (ii) (A) no Default or Event of Default shall have occurred and be continuing and (B) the Parent,
PLIC and PXP would have been in compliance with all financial covenants hereof, calculated on a pro forma basis
at the time of the Acquisition as if the Acquisition had taken place at the beginning of the four fiscal
quarter period ending as of the last fiscal quarter end and as though this Agreement had been in effect
throughout such period, with the Parent providing a certificate with respect thereto and (iii) after giving
effect to each expenditure for Acquisitions the aggregate unused amount of the Commitments shall be not less
than $75,000,000; and

     (e)      Investments in Subsidiaries provided that (i) each such investment shall be made in compliance
with all applicable regulatory requirements, (ii) each such investment which constitutes an Acquisition shall
comply with the requirements of clause (d) hereof and (iii) after giving effect to each investment the
Borrowers shall be in compliance with all the requirements of this Agreement and no Default or Event of Default
shall have occurred or be continuing.

     Section 7.4. Limitation on Indebtedness. The Parent, PLIC and PXP shall not, and shall not suffer or
permit any Subsidiary to, create, incur, assume, suffer to exist, or otherwise become or remain directly or
indirectly liable with respect to, any Indebtedness if after giving effect thereto and to the application of
the proceeds thereof (i) a breach would have occurred under any provision of Article VIII or Article IX hereof
had the Indebtedness in question been incurred, and the proceeds thereof applied, as of the last day of the
fiscal quarter most recently

                                                      44


concluded prior to the incurrence of the Indebtedness in question or (ii) the aggregate amount of Indebtedness
of the Parent and its Subsidiaries (exclusive of Indebtedness owed by the Parent or a Subsidiary to a
Subsidiary or the Parent, Swap Contracts entered into in the ordinary course of business and not for
speculation and Indebtedness which is mandatorily convertible into equity within three years of issuance) would
exceed $750,000,000; provided, however, that for purposes of this Section 7.4 Indebtedness shall not include
any Surplus Notes to the extent that the Borrowers hold cash for the satisfaction of such Surplus Notes (such
cash to be maintained and accounted for in a manner reasonably acceptable to the Administrative Agent).

     Section 7.5. Transactions with Affiliates. The Parent, PLIC and PXP shall not, and shall not suffer
or permit any Subsidiary to, enter into any transaction with any Affiliate of the Parent, except upon fair and
reasonable terms no less favorable to the Parent, PLIC, PXP or such Subsidiary than would obtain in a
comparable arm's-length transaction with a Person not an Affiliate of the Parent, PLIC, PXP or such Subsidiary.

     Section 7.6. Use of Proceeds. The Borrowers shall not, and shall not suffer or permit any Subsidiary
to, use any portion of the Loan proceeds, directly or indirectly, (i) to purchase or carry Margin Stock, (ii)
to repay or otherwise refinance indebtedness of the Borrowers or others incurred to purchase or carry Margin
Stock, (iii) to extend credit for the purpose of purchasing or carrying any Margin Stock, or (iv) to acquire
any security in any transaction that is subject to Section 13 or 14 of the Exchange Act.

     Section 7.7. Contingent Obligations. The Parent, PLIC and PXP shall not, and shall not suffer or
permit any Subsidiary to, create, incur, assume or suffer to exist any Contingent Obligations except:

     (a)      endorsements for collection or deposit in the ordinary course of business;

     (b)      Contingent Obligations of the Parent, PLIC, PXP and their Subsidiaries existing as of the
Effective Date and listed in Schedule 7.7(a);

     (c)      Contingent Obligations included in the definition of the term "Indebtedness";

     (d)      the  undertakings by PLIC in existence on the date hereof and identified on Schedule  7.7(b)
hereto pursuant to which PLIC provides rating agencies with undertakings to maintain the net worth or capital
of the Subsidiaries in question and/or to assure that such Subsidiaries are able to meet their obligations on a
timely basis, provided that (i) such undertakings may be renewed or extended and may be modified if the
modifications in question will not increase the liability of PLIC thereunder in any material respect and (ii)
PLIC shall cause the undertakings as to any Subsidiary to be terminated if and when it ceases to be a
Subsidiary of PLIC (the undertakings above described shall not constitute "Indebtedness" of PLIC); and

     (e)      other Contingent Obligations in aggregate amounts not to exceed $50,000,000.

     Section 7.8. Joint Ventures. The Parent, PLIC and PXP shall not enter into or permit any Subsidiary
to enter into, any Joint Venture if after giving effect thereto the aggregate amount of investments by the
Parent, PLIC, PXP and their Subsidiaries (exclusive of investments in joint

                                                      45


ventures between any of them or any of them and their Subsidiaries or among such Subsidiaries) would exceed 10%
of the Parent's Shareholders Equity.

     Section 7.9. Restricted Payments. The Parent shall not, declare or pay any dividend or other
distribution on account of its equity securities or directly or indirectly, through a subsidiary or otherwise,
purchase, redeem or otherwise acquire or retire any such equity securities if after giving effect thereto a
Default or Event of Default shall have occurred and be continuing. The Parent will not permit any Subsidiary to
enter into, or permit to remain outstanding, any agreement prohibiting or limiting the amount of dividends or
other distributions which it may make to the holders of its equity securities.

     Section 7.10. ERISA. The Parent, PLIC or PXP shall not, and shall not suffer or permit any of its
ERISA Affiliates to: (a) engage in a prohibited transaction or violation of the fiduciary responsibility rules
with respect to any Plan which has resulted or could reasonably be expected to result in liability of the
Parent, PLIC or PXP in an aggregate amount in excess of $5,000,000 or (b) engage in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.

     Section 7.11. Change in Business. The Parent, PLIC and PXP shall not, and shall not suffer or permit
any Subsidiary to, engage in any material line of business substantially different from those lines of business
carried on by PLIC, PXP and their Subsidiaries on the date hereof.

     Section 7.12. Accounting Changes. The Parent, PLIC and PXP shall not, and shall not suffer or permit
any Subsidiary to, make any significant change in accounting treatment or reporting practices, except as
required by GAAP or SAP, or change the fiscal year of the Parent or of any Subsidiary.

     Section 7.13. Pari Passu. Each Borrower shall cause the Obligations to rank at least pari passu with
all other senior unsecured Indebtedness of such Borrower.

     Section 7.14. Phoenix. The Parent and PLIC shall retain the word "Phoenix" in their names.


                                                 ARTICLE VIII

                                          PARENT'S FINANCIAL COVENANTS

         So long as any Lender shall have any Commitments hereunder, or any Loan or other Obligations shall
remain unpaid or unsatisfied, unless the Majority Lenders waive compliance in writing:

     Section 8.1. Total Debt to Capitalization Ratio. The Parent shall at all times maintain the Parent
Total Debt to Capitalization Ratio at not more than 30%.

     Section 8.2. Shareholders' Equity. At all times from the date hereof through and including December
30, 2004, the Parent shall maintain its Shareholder's Equity at not less than $1,648,400,000. For the fiscal
quarter ending on December 31, 2004 and for each fiscal quarter thereafter, the Parent shall have a
Shareholder's Equity of not less than: (a) the minimum

                                                      46


Shareholder's Equity requirement for the immediately preceding fiscal quarter of the Parent; plus (b) fifty
percent (50%) of the Consolidated Net Income of the Parent for the then ended fiscal quarter of the Parent as
to which Consolidated Net Income is a positive amount; plus (c) one hundred percent (100%) of the proceeds
received in connection with the issuance of equity securities by the Parent and its Subsidiaries during the
then ended fiscal quarter of the Parent.


                                                  ARTICLE IX

                                            PLIC FINANCIAL COVENANTS

         From and after the Effective Date and so long as any Lender shall have any Commitments hereunder, or
any Loan or other Obligation shall remain unpaid or unsatisfied, unless the Majority Lenders waive compliance
in writing:

     Section 9.1. Risk Based Capital. PLIC shall as of the last day of each calendar quarter have a Risk
Based Capital Ratio of not less than 2.50 to 1.

     Section 9.2. A.M. Best Rating. PLIC shall at all times have an A.M. Best Financial Strength rating of
not less than "A-".


                                                   ARTICLE X

                                                   GUARANTIES

     Section 10.1. Guaranty. The Parent hereby unconditionally and irrevocably guarantees the full and
punctual payment (whether at stated maturity, upon acceleration or otherwise) of the principal of and interest
on each Note issued by PLIC or PXP pursuant to this Agreement, and the full and punctual payment of all
Obligations of PLIC or PXP under this Agreement. Upon failure by PLIC or PXP to pay punctually any such amount,
the Parent shall forthwith on demand pay the amount not so paid at the place and in the manner specified in
this Agreement.

     Section 10.2. Guaranty Unconditional. The obligations of the Parent under this Article X shall be
unconditional and absolute and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:

     (a)      any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of
PLIC or PXP under this Agreement or any Note, by operation of law or otherwise;

     (b)      any modification or amendment of or supplement to this Agreement or any Note;

     (c)      any release, impairment, non-perfection or invalidity of any direct or indirect security for any
obligation of PLIC or PXP under this Agreement or any Note;

     (d)      any change in the corporate existence, structure or ownership of PLIC or PXP or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting PLIC or PXP or

                                                      47


their assets or any resulting release or discharge of any obligation of PLIC or PXP contained in this Agreement
or any Note;

     (e)      the existence of any claim, set-off or other right which the Parent may have at any time against
PLIC or PXP, the Administrative Agent, any Lender or any other Person, whether in connection herewith or any
unrelated transaction, provided that nothing herein shall prevent the assertion of any such claim by separate
suit or compulsory counterclaim;

     (f)      any invalidity or unenforceability relating to or against PLIC or PXP for any reason of this
Agreement or any Note, or any provision of applicable law or regulation purporting to prohibit the payment by
PLIC or PXP of the principal of or interest on any Note or any other amount payable by PLIC or PXP under this
Agreement; or

     (g)      any other act or omission to act or delay of any kind by PLIC or PXP, the Administrative Agent,
any Lender or any other Person or any other circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of PLIC or PXP or of the Parent's obligations as guarantor
hereunder.

     Section 10.3. Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances. The
Parent's obligations as guarantor hereunder shall remain in full force and effect until all of the Commitments
shall have terminated and all Obligations shall have been indefeasibly paid in full in money. If at any time
any payment of principal, interest or any other amount payable by PLIC or PXP under this Agreement or any Note
is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of
PLIC or PXP or otherwise, the Parent's obligations hereunder with respect to such payment shall be reinstated
as though such payment had been due but not made at such time.

     Section 10.4. Waiver by the Parent. The Parent irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as well as any requirement that at any time any action
be taken by any Person against PLIC or PXP or any other Person.

     Section 10.5. Subrogation. Notwithstanding any payment made by or for the account of the Parent
pursuant to this Article X, the Parent shall not be subrogated to any right of the Administrative Agent or any
Lender until such time as the Administrative Agent and the Lenders shall have received final payment in cash of
the full amount of all Obligations.

     Section 10.6. Stay of Acceleration. If acceleration of the time for payment of any amount payable by
PLIC or PXP under this Agreement or any Note is stayed upon the insolvency, bankruptcy or reorganization of
PLIC or PXP, all such amounts otherwise subject to acceleration under the terms of this Agreement shall
nonetheless be payable by the Parent hereunder forthwith on demand by the Administrative Agent made at the
request of the Majority Lenders.

                                                      48


                                                  ARTICLE XI

                                               EVENTS OF DEFAULT

     Section 11.1. Event of Default. Any of the following shall constitute an "Event of Default":

     (a)      Non-Payment. Any of the Parent, PLIC or PXP fails to pay, (i) when and as required to be paid
herein, any amount of principal of any Loan, or (ii) within five days after the same becomes due, any interest,
fee or any other amount payable hereunder or under any other Loan Document; or

     (b)      Representation or Warranty. Any representation or warranty by any of the Parent, PLIC or PXP or
any other Subsidiary made or deemed made herein, in any other Loan Document, or which is contained in any
certificate, document or financial or other statement by the Parent, PLIC or PXP, any other Subsidiary, or any
Responsible Officer of the Parent, PLIC, PXP or any other Subsidiary, furnished at any time under this
Agreement, or in or under any other Loan Document, is incorrect in any material respect on or as of the date
made or deemed made; or

     (c)      Specific Defaults. Any of the Parent, PLIC or PXP fails to perform or observe any term, covenant
or agreement contained in any of Section 6.1 or 6.3 or in Article VII, VIII or IX hereof; or

     (d)      Other  Defaults. Any of the Parent, PLIC or PXP fails to perform or observe any other term or
covenant contained in this Agreement or any other Loan Document, and such default shall continue unremedied for
a period of 20 days after the date upon which written notice thereof is given to the Parent, PLIC or PXP (as
applicable) by the Administrative Agent or any Lender; or

     (e)      Cross-Default. The Parent, PLIC, PXP or any other Subsidiary thereof (i) fails to make any
payment in respect of any Indebtedness or Contingent Obligation having an aggregate principal amount (including
undrawn committed or available amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $10,000,000 (or its equivalent in any other currency) with respect
to the Parent or PLIC, or $5,000,000 (or its equivalent in any other currency) with respect to PXP or any other
Subsidiary of the Parent (other than PLIC) or of PLIC, when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise); or (ii) fails to perform or observe any other condition or
covenant, or any other event shall occur or condition exist, under any agreement or instrument relating to any
such Indebtedness or Contingent Obligation, if the effect of such failure, event or condition is to cause, or
to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior to its stated maturity, or such Contingent Obligation
to become payable or cash collateral in respect thereof to be demanded; provided that paying an amount on a
Swap Contract entered into in the ordinary course of business and not for speculation when due shall not be
treated as subject to this clause (ii); or

                                                      49


     (f)      Insolvency, Voluntary Proceedings. The Parent, PLIC, PXP or any other Subsidiary (i) ceases or
fails to be solvent, or generally fails to pay, or admits in writing its inability to pay, its debts as they
become due, subject to applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary course other than, in the case of a Subsidiary other
than PLIC or PXP, as a result of a decision of the Parent that the continued operation of the Subsidiary in
question is no longer necessary to the conduct of the business of the Parent and its Subsidiaries taken as a
whole; (iii) commences any Insolvency Proceeding with respect to itself or its property; or (iv) takes any
action to effectuate or authorize any of the foregoing; or

     (g)      Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is commenced or filed against
the Parent, PLIC or PXP or any other Subsidiary or its property, or any writ, judgment, warrant of attachment,
execution or similar process, is issued or levied against a substantial part of the properties of any of them,
and any such proceeding or petition shall not be dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or fully bonded within 60 days after commencement,
filing or levy; (ii) the Parent, PLIC or PXP or any other Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or similar order under non-U.S. law)
is ordered in any Insolvency Proceeding; or (iii) the Parent, PLIC or PXP or any other Subsidiary acquiesces in
the appointment of a receiver, trustee, custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of its property or business; or

     (h)      ERISA. (i) An  ERISA Event shall occur with respect to a Pension Plan or Multiemployer Plan which
has resulted or could reasonably be expected to result in liability of the Parent under Title IV of ERISA to
the Pension Plan, Multiemployer Plan or the PBGC; (ii) there exists an Unfunded Pension Liability (other than
as disclosed on Schedule 5.7(c) hereto); or (iii) the Parent, PLIC or PXP or any ERISA Affiliate shall fail to
pay when due, after the expiration of any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan; or

     (i)      Monetary Judgments. One or more non-interlocutory judgments, non-interlocutory orders, decrees or
arbitration awards is entered against the Parent, PLIC, PXP or any other Subsidiary involving in the aggregate
a liability (to the extent not covered by independent third-party insurance as to which the insurer does not
dispute coverage) as to any single or related series of transactions, incidents or conditions, of $25,000,000
(or its equivalent in any other currency) or more, and the same shall remain unsatisfied, unvacated and
unstayed pending appeal for a period of 30 days after the entry thereof; or

     (j)      Non-Monetary Judgments. Any non-monetary judgment, order or decree is entered against the Parent,
PLIC, PXP or any other Subsidiary which does or would reasonably be expected to have a Material Adverse Effect,
and there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or

     (k)      Change of Control. Any Change of Control occurs; or

                                                      50



     (l)      Loss of Licenses. Any Governmental Authority revokes or fails to renew any license, permit or
franchise of the Parent, PLIC, PXP or any other Subsidiary, or the Parent, PLIC, PXP or any other Subsidiary
for any reason loses any license, permit or franchise, or the Parent or any Subsidiary suffers the imposition
of any restraining order, escrow, suspension or impound of funds in connection with any proceeding (judicial or
administrative) with respect to any license, permit or franchise, if the effect of any thereof involves a
reasonable possibility of a Material Adverse Effect or any Governmental Authority intervenes in the management
of any Subsidiary engaged in the business of insurance.

     Section 11.2. Remedies. If any Event of Default occurs, the Administrative Agent shall, at the request
of, or may, with the consent of, the Majority Lenders,

     (a)      declare the commitments of each Lender to make Loans to be terminated, whereupon such commitments
shall be terminated;

     (b)      declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid
thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately
due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby
expressly waived by the Borrowers; and

     (c)      exercise on behalf of itself and the Lenders all rights and remedies available to it and the
Lenders under the Loan Documents or applicable law;

provided, however, that upon the occurrence of any event specified in subsection (f) or (g) of Section 11.1 (in
the case of clause (i) of subsection (g) upon the expiration of the 60-day period mentioned therein) with
respect to the Parent, PLIC, PXP or any other Primary Subsidiary, the obligation of each Lender to make Loans
shall automatically terminate and the unpaid principal amount of all outstanding Loans, and all interest and
other amounts as aforesaid shall automatically become due and payable without further act of the Administrative
Agent or any Lender.

     Section 11.3. Rights Not Exclusive. The rights provided for in this Agreement and the other Loan
Documents are cumulative and are not exclusive of any other rights, powers, privileges or remedies provided by
law or in equity, or under any other instrument, document or agreement now existing or hereafter arising.


                                                  ARTICLE XII

                                            THE ADMINISTRATIVE AGENT

     Section 12.1. Appointment. Subject to Section 12.9 hereof, each Lender hereby irrevocably designates
and appoints Wachovia as the Administrative Agent of such Lender under the Loan Documents and each Lender
hereby irrevocably authorizes the Administrative Agent to take such action on its behalf under the provisions
of the Loan Documents and to exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of the Loan Documents, together with such powers as are reasonably incidental
thereto. The duties of the Administrative Agent shall be mechanical and administrative in nature, and,

                                                      51


notwithstanding any provision to the contrary elsewhere in any Loan Document, the Administrative Agent shall
not have any duties or responsibilities other than those expressly set forth therein, or any fiduciary
relationship with, or fiduciary duty to, any Lender, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into the Loan Documents or otherwise exist against the
Administrative Agent.

     Section 12.2. Delegation of Duties. The Administrative Agent may execute any of its duties under the
Loan Documents by or through agents or attorneys in fact and shall be entitled to rely upon, and shall be fully
protected in, and shall not be under any liability for, relying upon, the advice of counsel concerning all
matters pertaining to such duties.

     Section 12.3. Exculpatory Provisions. Neither the Administrative Agent nor any of its officers,
directors, employees, agents attorneys-in-fact, or affiliates shall be (i) liable for any action lawfully taken
or omitted to be taken by it or such Person under or in connection with the Loan Documents (except the
Administrative Agent for its own gross negligence or willful misconduct), or (ii) responsible in any manner to
any of the Lenders for any recitals, statements, representations or warranties made by the Parent, PLIC or PXP
or any officer thereof contained in the Loan Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent under or in connection with,
the Loan Documents or for the value, validity, effectiveness, genuineness, perfection, enforceability or
sufficiency of any of the Loan Documents or for any failure of the Parent, PLIC, PXP or any other Person to
perform its obligations thereunder. The Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the agreements contained in, or
conditions of, the Loan Documents, or to inspect the property, books or records of the Parent, PLIC or PXP. The
Lenders acknowledge that the Administrative Agent shall not be under any duty to take any discretionary action
permitted under the Loan Documents unless the Administrative Agent shall be instructed in writing to do so by
the Majority Lenders, and such instructions shall be binding on the Lenders and all holders of any Obligations;
provided, however, that the Administrative Agent shall not be required to take any action which exposes the
Administrative Agent to personal liability or is contrary to law or any provision of the Loan Documents. The
Administrative Agent shall not be under any liability or responsibility whatsoever, as Administrative Agent, to
the Parent, PLIC, PXP or any other Person as a consequence of any failure or delay in performance, or any
breach, by any Lender of any of its obligations under any of the Loan Documents.

     Section 12.4. Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit,
opinion, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document
or conversation (including any electronic message, internet or intranet website posting or other distribution)
in good faith believed by it to be genuine and correct and to have been signed, sent or made by a proper Person
or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to Parent,
PLIC or PXP), independent accountants and other experts selected by the Administrative Agent. The
Administrative Agent may treat each Lender, or the Person designated in the last notice filed with it under
this Section, as the holder of all of the interests of such Lender, in its Loans and Notes, until written
notice of transfer, signed by such Lender (or the Person designated in the last notice filed with the
Administrative Agent) and by the Person designated in such written notice

                                                      52


of transfer, in form and substance satisfactory to the Administrative Agent, shall have been filed with the
Administrative Agent. The Administrative Agent shall not be under any duty to examine or pass upon the
validity, effectiveness, enforceability or genuineness of the Loan Documents or any instrument, document or
communication furnished pursuant thereto or in connection therewith, and the Administrative Agent shall be
entitled to assume that the same are valid, effective and genuine, have been signed or sent by the proper
parties and are what they purport to be. The Administrative Agent shall be fully justified in failing or
refusing to take any action under the Loan Documents unless it shall first receive such advice or concurrence
of the Majority Lenders as it deems appropriate. The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under the Loan Documents in accordance with a request or direction of
the Majority Lenders, and such request or direction and any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders and all future holders of the Notes.

     Section 12.5. Notice of Default. The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless the Administrative Agent has received
written notice thereof from a Lender or a Borrower. In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall promptly give notice thereof to the Lenders and the Parent, PLIC and
PXP. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall
be directed by the Majority Lenders; provided, however, that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of Default as it shall deem to be in
the best interests of the Lenders.

     Section 12.6. Non-Reliance on Administrative Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Administrative Agent nor any of its respective officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the
Administrative Agent hereinafter, including any review of the affairs of the Parent, PLIC and PXP, shall be
deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender
represents to the Administrative Agent that it has, independently and without reliance upon the Administrative
Agent or any Lender, and based on such documents and information as it has deemed appropriate, made its own
evaluation of and investigation into the business, operations, property, financial and other condition and
creditworthiness of the Parent, PLIC and PXP and made its own decision to enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the Administrative Agent or any
Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make
its own credit analysis, evaluations and decisions in taking or not taking action under any Loan Document, and
to make such investigation as it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Parent, PLIC and PXP. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide the Lender with any credit or other
information concerning the business, operations, property, financial and other condition or creditworthiness of
the Parent, PLIC or PXP which at any time may come into the possession of the

                                                      53


Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates.

     Section 12.7. Indemnification. Each Lender agrees to indemnify and hold harmless the Administrative
Agent in its capacity as such (to the extent not promptly reimbursed by the Parent, PLIC and PXP and without
limiting the obligation of the Parent, PLIC and PXP to do so), pro rata according to its Pro Rata Share, from
and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever, including, without limitation, any amounts paid to the
Lenders (through the Administrative Agent) by any of the Parent, PLIC or PXP pursuant to the terms of the Loan
Documents, that are subsequently rescinded or avoided, or must otherwise be restored or returned) which may at
any time (including, without limitation, at any time following the payment of the Loans or the Notes) be
imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of
the Loan Documents or any other documents contemplated by or referred to therein or the transactions
contemplated thereby or any action taken or omitted to be taken by the Administrative Agent under or in
connection with any of the foregoing; provided, however, that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting solely from the finally adjudicated gross negligence or
willful misconduct of the Administrative Agent. Without limitation of the foregoing, each Lender agrees to
reimburse the Administrative Agent promptly upon demand for its pro rata share of any unpaid fees owing to the
Administrative Agent, and any costs and expenses (including, without limitation, reasonable fees and expenses
of counsel) payable by the Parent, PLIC or PXP under Section 13.4, to the extent that the Administrative Agent
has not been paid such fees or has not been reimbursed for such costs and expenses by the Parent, PLIC or PXP.
The failure of any Lender to reimburse the Administrative Agent promptly upon demand for its pro rata share of
any amount required to be paid by the Lenders to the Administrative Agent as provided in this Section shall not
relieve any other Lender of its obligation hereunder to reimburse the Administrative Agent for its pro rata
share of such amount, but no Lender shall be responsible for the failure of any other Lender to reimburse the
Administrative Agent for such other Lender's pro rata share of such amount. If, after having been indemnified
or reimbursed by the Lenders as provided by this Section, the Administrative Agent shall have received payment
from the obligor in respect of the obligation or liability for which it received such indemnification or
reimbursement from the Lenders, the Administrative Agent shall disburse to the Lenders an amount equal to the
amount of the payment so received on a pro rata basis. The agreements in this Section shall survive the
termination of the Commitments of all of the Lenders, and the payment of all amounts payable under the Loan
Documents.

     Section 12.8. Administrative Agent in Its Individual Capacity. Wachovia and its affiliates may make
secured or unsecured loans to, accept deposits from, issue letters of credit for the account of, act as trustee
under indentures of, and generally engage in any kind of business with, the Parent, PLIC, PLP or their
Subsidiaries as though Wachovia were not an Agent hereunder. With respect to any Commitment made or renewed by
Wachovia and the Obligations owing it, Wachovia shall have the same rights and powers under the Loan Documents
as any Lender and may exercise the same as though it were not the Administrative Agent, and the terms "Lender"
and "Lenders" shall in each case include Wachovia.

                                                      54


     Section 12.9. Successor Administrative Agent. If at any time the Administrative Agent deems it
advisable, in its discretion, it may submit to the Lenders a written notice of its resignation as
Administrative Agent under the Loan Documents, such resignation to be effective upon the earlier of (i) the
written acceptance of the duties of the Administrative Agent under the Loan Documents by a successor
Administrative Agent and (ii) on the 30th day after the date of such notice. Upon any such resignation, the
Majority Lenders shall have the right to appoint from among the Lenders a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Majority Lenders and accepted such
appointment in writing within 30 days after the retiring Administrative Agent's giving of notice of
resignation, then the retiring Administrative Agent may, on behalf of the Lender, appoint a successor
Administrative Agent, which successor Administrative Agent shall be a commercial bank organized or licensed
under the laws of the United States or any State thereof and having a combined capital, surplus, and undivided
profits of at least $500,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent's rights, powers, privileges and duties as Administrative Agent under the Loan
Documents shall be terminated. The Parent, PLIC, PXP and the Lenders shall execute such documents as shall be
necessary to effect such appointment. After any retiring Administrative Agent's resignation as Administrative
Agent, the provisions of the Loan Documents shall inure to its benefit as to any actions taken or omitted to be
taken by it, and any amounts owing to it, while it was Administrative Agent under the Loan Documents. If at any
time there shall not be a duly appointed and acting Administrative Agent, the Parent, PLIC and PXP agree to
make each payment due under the Loan Documents directly to the Lenders entitled thereto during such time.

     Section 12.10. Syndication Agent and Documentation Agent. The Lenders identified on the facing page or
signature pages of this Agreement as a "syndication agent" or "documentation agent" shall have no right, power,
obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders
as such. Without limiting the foregoing, none of the Lenders so identified as a "co-agent" or "lead manager"
shall have or be deemed to have any fiduciary relationship with any Lender or the Parent, PLIC or PXP. Each
Lender acknowledges that it has not relied, and will not rely, on any of the Lenders so identified in deciding
to enter into this Agreement or in taking or not taking action hereunder. The parties identified on the facing
pages hereof as having arranged this transaction are not parties to this Agreement and have no liabilities
hereunder.


                                                 ARTICLE XIII

                                                 MISCELLANEOUS

     Section 13.1. Amendments and Waivers. No amendment or waiver of any provision of this Agreement or any
other Loan Document, and no consent with respect to any departure by the Parent, PLIC or PXP therefrom, shall
be effective unless the same shall be in writing and signed by the Majority Lenders (or by the Administrative
Agent at the written request of the Majority Lenders) and the Parent, PLIC and PXP and acknowledged by the
Administrative

                                                      55


Agent, and then any such waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such waiver, amendment, or consent shall, unless
in writing and signed by all the Lenders, the Parent, PLIC and PXP and acknowledged by the Administrative
Agent, do any of the following:

     (a)      increase, decrease or extend the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 11.2); provided, however, that (i) a decrease of any Commitment by the Borrowers pursuant
to Section 2.5 hereof shall not require the written consent of the Administrative Agent or any Lender and (ii)
an increase of the Commitments pursuant to Section 2.14 shall require only such consents as are specified in
such Section;

     (b)      postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other
Loan Document;

     (c)      reduce the principal of, or the rate of interest specified herein on any Loan, or any fees or
other amounts payable hereunder or under any other Loan Document;

     (d)      change the percentage of any of the Commitments or of the aggregate unpaid principal amount of
any of the Loans which is required for the Lenders or any of them to take any action hereunder (excluding any
changes caused by an increase in the Commitments pursuant to Section 2.14;

     (e)      amend this Section, or Section 2.13 or any provision herein providing for consent or other action
by all Lenders; or

     (f)      amend or terminate any guaranty, including the guaranties pursuant to Article X;

and, provided, further, that no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent, in addition to the Majority Lenders or all the Lenders, as the case may be, affect the
rights or duties of the Administrative Agent under this Agreement or any other Loan Document.

     Section 13.2. Notices.

     (a)      All notices, requests and other communications under the Loan Documents shall be in writing
(including, unless the context expressly otherwise provides, by facsimile transmission, provided that any
matter transmitted by the Parent, PLIC or PXP by facsimile (i) shall be immediately confirmed by a telephone
call to the recipient at the number specified on the signature pages hereof or on an Assignment and Acceptance
to which it is a party, and (ii) shall be followed promptly by delivery of a hard-copy original thereof) and
mailed, faxed or delivered, to the address or facsimile number specified for notices on the signature pages
hereof or on an Assignment and Acceptance to which it is a party; or, as directed to the Parent, PLIC, PXP or
the Administrative Agent, to such other address as shall be designated by such party in a written notice to the
other parties, and as directed to any other party, at such other address as shall be designated by such party
in a written notice to the other parties.

                                                      56


     (b)      All such notices, requests and communications shall, when transmitted by overnight delivery, or
faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by
facsimile machine, respectively, or, if mailed, upon the third Business Day after the date deposited into the
U.S. mail, or, if delivered, upon delivery; except that notices pursuant to Article II or XII shall not be
effective until actually received by the Administrative Agent.

     (c)      Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communication (including e-mail and internet or intranet websites) pursuant to procedures approved
by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender if such
Lender has notified the Administrative Agent that it is incapable of receiving notices by electronic
communication. The Administrative Agent or any of the Borrowers may, in its discretion, agree to accept notices
and other communications to it hereunder by electronic communication pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices or communications. Unless the
Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall
be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the
"return receipt requested" function, as available, return e-mail or other written acknowledgement), provided
that if such notice or other communication is not sent during the normal business hours of the recipient, such
notice or communication shall be deemed to have been sent at the opening of business on the next business day
for the recipient, and (ii) notices or other communications posted to an internet or intranet website shall be
deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the
foregoing clause (i) of notification that such notice or communication is available and identifying the website
address therefor.

     (d)      Any agreement of the Administrative Agent and the Lenders herein to receive certain notices by
telephone, electronic communication or facsimile is solely for the convenience and at the request of the
Parent, PLIC and/or PXP. The Administrative Agent and the Lenders shall be entitled to rely on the authority of
any Person purporting to be a Person authorized by the Parent, PLIC and/or PXP to give such notice and the
Administrative Agent and the Lenders shall not have any liability to the Parent, PLIC, PXP or other Persons on
account of any action taken or not taken by the Administrative Agent or the Lenders in reliance upon such
telephonic or facsimile notice. The obligation of the Borrowers to repay the Loans shall not be affected in any
way or to any extent by any failure by the Administrative Agent and the Lenders to receive written confirmation
of any telephonic or facsimile notice or the receipt by the Administrative Agent and the Lenders of a
confirmation which is at variance with the terms understood by the Administrative Agent and the Lenders to be
contained in the telephonic or facsimile notice.

     Section 13.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on
the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or
privilege.

     Section 13.4. Costs and Expenses. The Borrowers shall:

                                                      57


     (a)      whether or not the transactions contemplated hereby are consummated, pay or reimburse the
Administrative Agent for all reasonable costs and expenses incurred by the Administrative Agent in connection
with the development, preparation, delivery, administration and execution of, and any amendment, supplement,
waiver or modification to (in each case, whether or not consummated), this Agreement, any Loan Document and any
other documents prepared in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs incurred by the Administrative Agent with
respect thereto; and

     (b)      pay or reimburse the Administrative Agent, the Arranger and each Lender for all costs and
expenses (including reasonable Attorney Costs) incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or any other Loan Document during
the existence of an Event of Default or after acceleration of the Loans (including in connection with any
"workout" or restructuring regarding the Loans, and including in any Insolvency Proceeding or appellate
proceeding).

     Section 13.5. Indemnity. Whether or not the transactions contemplated hereby are consummated, the
Parent, PLIC and PXP shall indemnify and hold the Agent-Related Persons, and each Lender and each of its
respective officers, directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified
Person") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature
whatsoever, including, but not limited to, any civil penalty or fine assessed by OFAC against, and all
reasonable costs and expenses (including counsel fees and disbursements) incurred in connection with defense
thereof by the Administrative Agent or any Lender as a result of the funding of Loans, which may at any time
(including at any time following repayment of the Loans and the termination, resignation or replacement of the
Administrative Agent or replacement of any Lender) be imposed on, incurred by or asserted against any such
Person in any way relating to or arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in
connection with any of the foregoing, including with respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding or appellate proceeding) related to or arising out of this Agreement or
the Loans or the use of the proceeds thereof, whether or not any Indemnified Person is a party thereto, (all of
the foregoing, collectively, the "Indemnified Liabilities"); provided, that the Parent, PLIC and PXP shall have
no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities resulting solely from
the gross negligence or willful misconduct of such Indemnified Person; and provided, further, that the
Indemnified Persons shall, at the request of the Parent, PLIC and PXP only use one counsel among them unless
any such Indemnified Person determines in its sole discretion that its interests may differ from any other
Indemnified Person. The agreements in this Section shall survive payment of all other Obligations.

     Section 13.6. Payments Set Aside. To the extent that any of the Parent, PLIC or PXP makes a payment to
the Administrative Agent or the Lenders, or the Administrative Agent or the Lenders exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered
into by the Administrative Agent or such

                                                      58


Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any
Insolvency Proceeding or otherwise, then (a) to the extent of such recovery the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force and effect as if such payment
had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the
Administrative Agent upon demand its pro rata share of any amount so recovered from or repaid by the
Administrative Agent.

     Section 13.7. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns, except that the Parent, PLIC
and PXP may not assign or transfer any of their rights or obligations under this Agreement without the prior
written consent of the Administrative Agent and each Lender.

     Section 13.8. Assignments, Participations, etc.

     (a)      Any Lender may, subject to the written consent of the Borrowers at all times other than during
the existence of an Event of Default, and the Administrative Agent, which consents shall not be unreasonably
withheld, at any time assign and delegate to one or more Eligible Assignees (provided that no written consent
of the Borrowers or the Administrative Agent shall be required in connection with any assignment and delegation
by a Lender to an Eligible Assignee that is an Affiliate of such Lender and the assignee need not be an
Eligible Assignee if an Event of Default has occurred and is continuing) (each an "Assignee") all, or any
ratable part of all, of any Loan, all, or any ratable part of all, of any Commitment and the other rights and
obligations of such Lender hereunder, in a minimum amount such that the Assignee after giving effect to such
assignment shall hold at least $5,000,000 of the Commitments (or, if less, the aggregate amount of the
Commitments of the Lender so assigning); provided, however, that the Borrowers and the Administrative Agent may
continue to deal solely and directly with such Lender in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Borrowers and the Administrative Agent
by such Lender and the Assignee; (ii) such Lender and its Assignee shall have delivered to the Borrowers and
the Administrative Agent an Assignment and Acceptance in the form of Exhibit E, or in such other form as shall
be acceptable to them (each an "Assignment and Acceptance") and (iii) the assignor Lender or Assignee has paid
to the Administrative Agent a processing fee in the amount of $3,500 (such processing fee to be payable,
without limitation, in connection with assignments from a Lender to another Lender).

     (b)      From and after the date that the Administrative Agent notifies the assignor Lender that it has
received (and provided its consent with respect to) an executed Assignment and Acceptance and payment of the
above-referenced processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall
have the rights and obligations of a Lender under the Loan Documents, and (ii) the assignor Lender shall, to
the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under
the Loan Documents.

                                                      59


     (c)      Within five Business Days after its receipt of notice by the Administrative Agent that it has
received an executed Assignment and Acceptance and payment of the processing fee, (and provided that it
consents to such assignment in accordance with Section 13.8(a)), the Borrowers shall at the request of the
Assignee execute and deliver to the Administrative Agent, a new Note evidencing such Assignee's assigned Loans
and applicable Commitments. Immediately upon each Assignee's making its processing fee payment under the
Assignment and Acceptance, this Agreement shall be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting adjustment of the applicable Commitment
arising therefrom. The amount of the Commitments allocated to each Assignee shall reduce the applicable
Commitments of the assigning Lender in an equal amount.

     (d)      Any Lender may at any time sell to one or more commercial banks or other Persons not Affiliates
of the Borrowers (a "Participant") participating interests in any of the Loans of that Lender, any of the
Commitments of that Lender and the other interests of that Lender (the "originating Lender") hereunder and
under the other Loan Documents; provided, however, that (i) the originating Lender's obligations under this
Agreement shall remain unchanged, (ii) the originating Lender shall remain solely responsible for the
performance of such obligations, (iii) the Borrowers and the Administrative Agent shall continue to deal solely
and directly with the originating Lender in connection with the originating Lender's rights and obligations
under this Agreement and the other Loan Documents, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or any consent or waiver with
respect to, this Agreement or any other Loan Document, except to the extent such amendment, consent or waiver
would require, unanimous consent of the Lenders as described in the first proviso to Section 13.1. In the case
of any such participation, the Participant shall be entitled to the benefit of Sections 3.1, 3.3 and 13.5 as
though it were also a Lender hereunder, and not have any other rights under this Agreement, or any of the other
Loan Documents, and all amounts payable by the Borrowers hereunder shall be determined as if such Lender had
not sold such participation; except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement.

     (e)      Notwithstanding any other provision in this Agreement, any Lender may at any time create a
security interest in, or pledge, all or any portion of its rights under and interest in this Agreement and the
Note(s) held by it in favor of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR §203.14, and such Federal Reserve Bank may enforce such pledge or security interest
in any manner permitted under applicable law.

     (f)      (i)      Notwithstanding anything to the contrary contained herein, any Lender, (a "Granting
Lender") may grant to a special purpose funding vehicle (an "SPV"), identified as such in writing from time to
time by such Granting Lender to the Administrative Agent and the Borrowers, the option to fund all or any part
of any Loan that such Granting Lender would otherwise be obligated to fund pursuant to this Credit Agreement;
provided that (aa) nothing herein shall constitute a commitment by any SPV to fund any Loan, (ab) if an SPV
elects not to

                                                      60


exercise such option or otherwise fails to fund all or any part of such Loan, the Granting Lender shall be
obligated to fund such Loan pursuant to the terms hereof, (ac) no SPV shall have any voting rights pursuant to
Section 13.1 and (ad) with respect to notices, payments and other matters hereunder, the Borrowers, the
Administrative Agent and the Lenders shall not be obligated to deal with an SPV, but may limit their
communications and other dealings relevant to such SPV to the applicable Granting Lender. The funding of a Loan
by an SPV hereunder shall utilize the applicable Commitment of the Granting Lender to the same extent that, and
as if, such Loan were funded by such Granting Lender.

          (ii)     As to any Loans or portion thereof made by it, each SPV shall have all the rights that its
applicable Granting Lender making such Loans or portion thereof would have had under this Credit Agreement;
provided, however, that each SPV shall have granted to its Granting Lender an irrevocable power of attorney, to
deliver and receive all communications and notices under this Agreement (and any related documents) and to
exercise on such SPV's behalf, all of such SPV's voting rights under this Credit Agreement. No additional
Note(s) shall be required to evidence the Loans or portion thereof made by an SPV; and the related Granting
Lender shall be deemed to hold its Note(s) as agent for such SPV to the extent of the Loans or portion thereof
funded by such SPV. In addition, any payments for the account of any SPV shall be paid to its Granting Lender
as agent for such SPV.

          (iii)    Each party hereto hereby agrees that no SPV shall be liable for any indemnity or payment
under this Agreement for which a Lender would otherwise be liable for so long as, and to the extent, the
Granting Lender provides such indemnity or makes such payment. In furtherance of the foregoing, each party
hereto hereby agrees (which agreements shall survive the termination of this Credit Agreement) that, prior to
the date that is one year and one day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPV, it will not institute against, or join any other person in instituting against,
such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under the laws of
the United States or any State thereof.

          (iv)     In addition, notwithstanding anything to the contrary contained in this Agreement, but
subject to the other provisions of Section 13.8(f), any SPV may (i) at any time and without paying any
processing fee therefor, assign or participate all or a portion of its Loans to the Granting Lender or to any
financial institutions providing liquidity and/or credit support to or for the account of such SPV to support
the funding or maintenance of Loans and (ii) disclose on a confidential basis any non-public information
relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancements to such SPV. This Section 13.8(f) may not be amended without the written
consent of any Granting Lender affected thereby if the existence of such Granting Lender has been identified to
the Borrowers and Administrative Agent pursuant to Section 13.8(f)(i).

     Section 13.9. Confidentiality. Each Lender agrees to take and to cause its Affiliates to take normal
and reasonable precautions and exercise due care to maintain the confidentiality of all information identified
as "confidential" or "secret" by the Parent, PLIC or PXP and provided to it by the Parent, PLIC or PXP or any
other Subsidiary, or by any Agent or the Arranger on their behalf, under this Agreement or any other Loan
Document, and neither it nor any of its Affiliates shall use any such information other than in connection with
the enforcement of this

                                                      61


Agreement and the other Loan Documents or in connection with other business now or hereafter existing or
contemplated with the Parent, PLIC, PXP or any Subsidiary thereof; except to the extent such information (i)
was or becomes generally available to the public other than as a result of disclosure by the Lender, or (ii)
was or becomes available on a nonconfidential basis from a source other than the Parent, PLIC or PXP, provided
that such source is not bound by a confidentiality agreement with the Parent, PLIC or PXP known to the Lender;
provided, however, that any Lender may disclose such information (A) at the request or pursuant to any
requirement of any Governmental Authority to which the Lender is subject or in connection with an examination
of such Lender by any such authority; (B) pursuant to subpoena or other court process; (C) when required to do
so in accordance with the provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Administrative Agent, any Lender or their
respective Affiliates may be party; (E) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (F) to such Lender's independent auditors and other
professional advisors; (G) to any Participant or Assignee, actual or potential, provided that such Person
agrees in writing to keep such information confidential to the same extent required of the Lenders hereunder;
(H) as to any Lender or its Affiliate, as expressly permitted under the terms of any other document or
agreement regarding confidentiality to which the Parent or any Subsidiary is party or is deemed party with such
Lender or such Affiliate; (I) to its Affiliates; and (J) to regulatory Governmental Authorities in connection
with any regulatory examination of the Lender. Notwithstanding anything to the contrary contained in this
Section or otherwise in the Loan Documents, the information subject to any confidentiality requirement shall
not include, and each Agent and each Lender may disclose without limitation of any kind, any information with
respect to the "tax treatment" and "tax structure" (in each case, within the meaning of Treasury Regulation
Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinion or
other tax analyses) that are provided to either of the Agents or such Lender relating to such tax treatment and
tax structure; provided that with respect to any document or similar item that in either case contains
information concerning the tax treatment or tax structure of the transactions as well as other information,
this sentence shall only apply to such portions of the document or similar item that relate to the tax
treatment or tax structure of the Loans and other transactions contemplated hereby.

     Section 13.10. Set-off. In addition to any rights and remedies of the Lenders provided by law, if an
Event of Default exists or the Loans have been accelerated, each Lender is authorized at any time and from time
to time, without prior notice to the Parent, PLIC or PXP, any such notice being waived by the Parent, PLIC and
PXP to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Lender
to or for the credit or the account of any of the Parent, PLIC or PXP against any and all obligations owing to
such Lender by the depositor, now or hereafter existing, irrespective of whether or not the Administrative
Agent or such Lender shall have made demand under this Agreement or any Loan Document and although such
Obligations may be contingent or unmatured. Each Lender agrees promptly to notify the applicable party and the
Administrative Agent after any such set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and application. In addition, each
Lender agrees that if it shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due with respect to any Loans made

                                                      62


by it which is greater than the proportion received by any other Lender in respect of the aggregate amount of
principal and interest due with respect to any Loans made by it, the Lender receiving such proportionately
greater payment shall purchase such participations in the Loans, and such other adjustments shall be made, as
may be required so that all such payments of principal and interest with respect to the Loans made by such
other Lenders shall be shared by the Lenders pro rata based on the ratio of the outstanding principal balance
of all Loans made by each Lender to the aggregate outstanding principal balance of all Loans made by all
Lenders; provided, however that nothing in this Section shall impair the right of any Lender to exercise any
right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of
Indebtedness of the Parent, PLIC or PXP other than Indebtedness of the Parent, PLIC or PXP under the Loans.
Each of the Parent, PLIC and PXP agree, to the fullest extent that it may effectively do so under applicable
law, that any holder of a participation in any Loan, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct creditor of the Parent, PLIC and/or
PXP, as the case may be, in the amount of such participation.

     Section 13.11. Automatic Debits of Fees. With respect to any fee, or any other cost or expense
(including Attorney Costs) due and payable to the Agents or the Arranger under the Loan Documents, the Parent,
PLIC and PXP hereby irrevocably authorize them to debit any deposit account of an obligor in an amount such
that the aggregate amount debited from all such deposit accounts does not exceed such fee, or other cost or
expense. If there are insufficient funds in such deposit accounts to cover the amount of the fee or other cost
or expense then due, such debits will be reversed (in whole or in part, in the debtor's sole discretion) and
such amount not debited shall be deemed to be unpaid. No such debit under this Section shall be deemed a
set-off.

     Section 13.12. Notification of Addresses, Lending Offices, Etc. Each Lender shall notify the
Administrative Agent in writing of any changes in the address to which notices to the Lender should be
directed, of addresses of any Lending Office, of payment instructions in respect of all payments to be made to
it hereunder and of such other administrative information as the Administrative Agent shall reasonably request.

     Section 13.13. Counterparts. This Agreement may be executed in any number of separate, counterparts,
each of which, when so executed, shall be deemed an original, and all of said counterparts taken together shall
be deemed to constitute but one and the same instrument.

     Section 13.14. Severability. The illegality or unenforceability of any provision of this Agreement or
any instrument or agreement required hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or any instrument or agreement required hereunder.

     Section 13.15. No Third Parties Benefits. This Agreement is made and entered into for the sole
protection and legal benefit of the Parent, PLIC, PXP, the Lenders, the Agents and the Agent- Related Persons,
and their permitted successors and assigns, and no other Person shall be a direct or indirect legal beneficiary
of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the
other Loan Documents.

                                                      63


     Section 13.16. Governing Law and Jurisdiction.

     (a)      THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK; PROVIDED THAT THE AGENTS AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL
LAW.

     (b)      ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARENT, PLIC, PXP, THE AGENTS AND THE LENDERS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF
THE PARENT, PLIC, PXP, THE AGENTS AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT TO THIS AGREEMENT OR ANY DOCUMENT RELATED
HERETO. THE PARENT, PLIC, PXP, THE AGENTS AND THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

     Section 13.17. Waiver of Jury Trial; Consequential Damages. THE PARENT, PLIC, PXP, THE LENDERS AND THE
AGENTS EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY
OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. IN ADDITION, EXCEPT AS PROHIBITED BY LAW, THE PARENT, PLIC, PXP AND EACH LENDER EACH
HEREBY WAIVE ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE PARENT, PLIC, PXP, THE
LENDERS AND THE AGENTS EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A
TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH
SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. EACH OF THE PARENT, PLIC AND PXP
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF

                                                      64


ANY LENDER OR ANY AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDERS AND/OR THE AGENTS WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH OF THE PARENT, PLIC AND PXP
ACKNOWLEDGES AND STIPULATES THAT THE WAIVERS GRANTED ABOVE ARE MADE KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
AND AFTER FULL CONSULTATION WITH COUNSEL AND CONSTITUTE A MATERIAL INDUCEMENT FOR THE LENDERS TO MAKE THE
LOANS.

     Section 13.18. Entire Agreement. This Agreement, together with the other Loan Documents, embodies the
entire agreement and understanding among the Borrowers, the Lenders and the Agents, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.

     Section 13.19. PATRIOT Act Notice. Each Lender that is subject to the PATRIOT Act and the
Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrowers that pursuant
to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies
the Borrowers, which information includes the name and address of the Borrowers and other information that will
allow such Lender or the Administrative Agent, as applicable, to identify the Borrowers in accordance with the
PATRIOT Act.

                                    REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                                         THE NEXT PAGE IS A SIGNATURE PAGE


                                                      65



          In Witness Whereof, the parties hereto have caused this Agreement to be duly executed and delivered
by their proper and duly authorized officers as of the day and year first above written.

                                                     THE PHOENIX COMPANIES, INC.



                                                     By:  /s/ Katherine P. Cody
                                                          Its:  Vice President and Treasurer



                                                     PHOENIX LIFE INSURANCE COMPANY



                                                     By:  /s/ Katherine P. Cody
                                                          Its:  Vice President and Treasurer

                                                     PHOENIX INVESTMENT PARTNERS, LTD



                                                     By:  /s/ Katherine P. Cody
                                                          Its: Vice President and Asst. Treasurer


                                                     Address for Notices to the Above Parties:

                                                     One American Row
                                                     Hartford, Connecticut 06115
                                                     Attention:  Katherine Cody
                                                     Phone:  860-403-6763
                                                     Fax:  860-403-5009

                                                     With copies also marked "Attention: General Counsel"



                                                      S-1


                                                     WACHOVIA BANK, NATIONAL ASSOCIATION,
                                                     as the Administrative Agent and as a Lender



                                                     By:  /s/ William R. Goley
                                                         Its:  Director


                                                     Lending Office

                                                     Wachovia Bank, National Association
                                                     201 South College Street
                                                     Charlotte, North Carolina 28288
                                                     Attn:  Mindy Yost
                                                     Phone:  (704) 383-6882
                                                     Fax:  (704) 383-0288


                                                     Address for Notices as a Lender

                                                     Same as above


                                                     Address for Notices as Administrative Agent

                                                     Same as above





                                                      S-2


                                                     THE BANK OF NEW YORK, as Syndication Agent
                                                     and as a Lender



                                                     By:  /s/ Scott Schaffer
                                                         Its:  Vice President


                                                     Lending Office

                                                     101 Barclay Street
                                                     New York, New York 10286


                                                     Address for Notices

                                                     One Wall Street
                                                     New York, New York 10286
                                                     Attn:  Tonny G. Pinilla
                                                     Phone:  (212) 635-7912
                                                     Fax:  (212) 809-9520




                                                      S-3


                                                     PNC BANK, NATIONAL ASSOCIATION, as a
                                                     Documentation Agent and as a Lender



                                                     By:  /s/ Kirk Seagers
                                                         Its:  Vice President


                                                     Lending Office

                                                     500 First Avenue
                                                     Pittsburgh, Pennsylvania 15219
                                                     Attn: Marc Accamando
                                                     Phone: (412) 768-7647
                                                     Fax: (412) 768-4586


                                                     Address for Notices

                                                     Same as Above





                                                      S-4


                                                     JPMORGAN CHASE BANK, as a Documentation
                                                     Agent and as a Lender



                                                     By:  /s/ Lawrence Palumbo, Jr.
                                                         Its:  Vice President


                                                     Lending Office

                                                     270 Park Avenue, 4th Floor
                                                     New York, New York 10017
                                                     Attn:  Lawrence Palumbo
                                                     Phone:  (212) 270-7525
                                                     Fax:  (212) 270-1511


                                                     Address for Notices

                                                     Same as Above




                                                      S-5


                                                     HARRIS NESBITT FINANCING, INC., as a
                                                     Documentation Agent and as a Lender



                                                     By:  /s/ Joseph W. Linder
                                                         Its:  Vice President


                                                     Lending Office

                                                     115 S. LaSalle Street
                                                     Chicago, Illinois 60603
                                                     Attn:  Stephen A. Maenhout
                                                     Phone:  (312) 750-6043
                                                     Fax:  (312) 750-6057


                                                     Address For Notices

                                                     Same as above




                                                      S-6


                                                     5TH/3RD BANK, as a Lender



                                                     By:  /s/  Brooke Balcom
                                                         Its:  Relationship Manager


                                                     Lending Office

                                                     38 Fountain Square Plaza
                                                     MD: 109046
                                                     Cincinnati, OH 45202
                                                     PH: 513-534-0836
                                                     FX: 513-534-5947


                                                     Address for Notices

                                                     Same as Above




                                                      S-7


                                                     STATE STREET BANK AND TRUST
                                                     COMPANY, as a Lender



                                                     By:  /s/ Anne Muita
                                                         Its:  Assistant Vice President


                                                     Lending Office

                                                     225 Franklin Avenue MAO 11
                                                     Boston, Massachusetts 02110
                                                     Attn:  Nicole Bertone
                                                     Phone:  (617) 664-3833
                                                     Fax:  (617) 664-3941


                                                     Address for Notices

                                                     Same as above




                                                      S-8


                                                     WEBSTER BANK, as a Lender



                                                     By:  /s/ Lawrence Davis
                                                         Its:  Vice President


                                                     Lending Office

                                                     CityPlace II, 5th Floor
                                                     185 Asylum Street
                                                     Hartford, Connecticut 06103
                                                     Attn:  Donna A. Long
                                                     Phone:  (860) 692-1353
                                                     Fax:  (860) 947-1872


                                                     Address for Notices

                                                     Same as above




                                                      S-9


                                                   EXHIBIT A

                                          FORM OF NOTICE OF BORROWING

                                           Date:               ,     

To:  Wachovia Bank, National Association, as Administrative Agent for the Lenders party to the Credit Agreement
     dated as of November 22, 2004 (as extended, renewed, amended or restated from time to time, the "Credit
     Agreement") among The Phoenix Companies, Inc., Phoenix Life Insurance Company, Phoenix Investment
     Partners, Ltd., certain Lenders which are signatories thereto, Wachovia Bank, National Association as
     Administrative Agent, and certain other agents named therein.

Ladies and Gentlemen:

     The undersigned, [Insert Name of Applicable Borrower] (the "Borrower"), refers to the Credit
Agreement, the terms defined therein being used herein as therein defined, and hereby gives you notice
irrevocably, pursuant to Section 2.3(a) of the Credit Agreement, of the Borrowing of Loans specified below:

          1.    The Business Day of the proposed Borrowing is               , 20   .

          2.    The aggregate amount of the proposed Borrowing is $       

          3.    The Borrowing is to be comprised of $               of [Base Rate] [Eurodollar Rate] Loans.

          [4.   The duration of the Interest Period for the Eurodollar Rate Loans included in the Borrowing
     shall be       months.]

     The undersigned hereby certifies that the following statements are true on the date hereof, and will
be true on the date of the proposed Borrowing, before and after giving effect thereto and to the application of
the proceeds therefrom:

          (a)   the representations and warranties of the Borrowers contained in Article V of the Credit
     Agreement are true and correct as though made on and as of such date (except to the extent such
     representations and warranties relate to an earlier date, in which case they are true and correct as of
     such date);

          (b)   no Default or Event of Default has occurred and is continuing or would result from such
     proposed Borrowing; and

          (c)   The proposed Borrowing will not cause the aggregate principal amount of all outstanding Loans
     to exceed the combined Commitments of the Lenders.



                                                     [NAME OF APPLICABLE BORROWER]


                                                     By: _______________________________________________
                                                         Title: ________________________________________








                                                   EXHIBIT B

                                   FORM OF NOTICE OF CONVERSION/CONTINUATION

                                             Date:          , ____

To:  Wachovia Bank, National Association, as Administrative Agent for the Lenders party to the Credit Agreement
     dated as of November 22, 2004 (as extended, renewed, amended or restated from time to time, the "Credit
     Agreement") among The Phoenix Companies, Inc., Phoenix Life Insurance Company, Phoenix Investment
     Partners, Ltd., certain Lenders which are signatories thereto, Wachovia Bank, National Association as
     Administrative Agent, and certain other agents named therein.

Ladies and Gentlemen:

     The undersigned, [Name of Applicable Borrower] (the "Borrower"), refers to the Credit Agreement, the terms
defined therein being used herein as therein defined, and hereby gives you notice irrevocably, pursuant to
Section 2.4 of the Credit Agreement, of the [conversion] [continuation] of the Loans specified herein, that:

          1.    The Conversion/Continuation Date is               , 20   .

          2.    The aggregate amount of the Loans to be [converted] [continued] is $              .

          3.    The Loans are to be [converted into] [continued as] [Eurodollar Rate] [Base Rate] Loans.

          4.    [If applicable:] The duration of the Interest Period for the Loans included in the [conversion]
     [continuation] shall be ____ months.

                                                     [NAME OF APPLICABLE BORROWER]


                                                     By: _______________________________________________
                                                         Title: ________________________________________





                                                   EXHIBIT C

                                         FORM OF COMPLIANCE CERTIFICATE

                                    Financial Statement Date:       , 200_

     Reference is made to that certain Credit Agreement dated as of November 22, 2004 (as extended, renewed,
amended or restated from time to time, the "Credit Agreement") among The Phoenix Companies, Inc., Phoenix Life
Insurance Company, Phoenix Investment Partners, Ltd., the several financial institutions from time to time
parties to the Credit Agreement (the "Lenders"), Wachovia Bank, National Association as Administrative Agent,
and certain other agents named therein. Unless otherwise defined herein, capitalized terms used herein have the
respective meanings assigned to them in the Credit Agreement.

     The undersigned Responsible Officer of the Parent, hereby certifies as of the date hereof that he/she is
the                   of the Parent, and that, as such, he/she is authorized to execute and deliver this
Certificate to the Lenders and the Administrative Agent on behalf of the Parent and its Subsidiaries, and that:

          1.    1.    Enclosed herewith is a copy of the [annual/quarterly] report of the Parent as at
                   (the "Computation Date") which report fairly presents the financial condition and
     results of operation of the Parent and its Subsidiaries, as of the Computation Date.

          2.    The undersigned has reviewed and is familiar with the terms of the Credit Agreement and has
     made, or has caused to be made under his/her supervision, a detailed review of the transactions and
     conditions (financial or otherwise) of the Parent during the accounting period covered by the attached
     financial statements.

          3.    To the best of the undersigned's knowledge, the Parent, PLIC and PXP, during such period, have
     observed, performed or satisfied all of their covenants and other agreements, and satisfied every
     condition in the Credit Agreement to be observed, performed or satisfied by the Parent, PLIC and PXP, and
     the undersigned has no knowledge of any Default of Event of Default.

          4.    The following financial covenant analyses and information set forth on Schedule I attached
     hereto are true and accurate on and as of the date of this Certificate.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of                200  .

                                                     THE PHOENIX COMPANIES, INC.


                                                     By: _______________________________________________
                                                         Title: ________________________________________





                                                   SCHEDULE 1

                                           TO COMPLIANCE CERTIFICATE
                                        FINANCIAL COVENANT CALCULATIONS






                                                   EXHIBIT D

                                            FORM OF PROMISSORY NOTE

                                                                                                  , 2004

     For Value Received, the undersigned, [Insert Name of Applicable Borrower] (the "Borrower"), hereby
promises to pay to the order of              (the "Lender"), the aggregate unpaid principal amount of all
Loans made by the Lender to the Borrower pursuant to the Credit Agreement, dated as of November 22, 2004, as it
may be amended, restated, supplemented or otherwise modified from time to time (the "Credit Agreement"), among
The Phoenix Companies, Inc., Phoenix Life Insurance Company and Phoenix Investment Partners, Ltd., the Lender,
the other lenders parties thereto, Wachovia Bank, National Association, as Administrative Agent, certain other
agents named therein, on the dates and in the amounts provided in the Credit Agreement. The Borrower further
promises to pay interest on the unpaid principal amount of the Loans evidenced hereby from time to time at the
rates, on the dates, and otherwise as provided in the Credit Agreement.

     The Lender is authorized to endorse or record the amount and the date on which each Loan is made, the
maturity date therefor and each payment of principal with respect thereto on a schedule annexed hereto and made
a part hereof, or on continuations thereof which shall be attached hereto and made a part hereof or on its
books and records; provided, that any failure to so endorse or record such information shall not in any manner
affect any obligation of the Borrower under the Credit Agreement and this Promissory Note (the "Note").

     This Note is one of the Notes referred to in, and is entitled to the benefits of, the Credit Agreement,
which Credit Agreement, among other things, contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.

     Terms defined in the Credit Agreement are used herein with their defined meanings therein unless otherwise
defined herein. This Note shall be governed by, and construed and interpreted in accordance with, the laws of
the State of New York applicable to contracts made and to be performed entirely within such State.

                                                     [NAME OF APPLICABLE BORROWER].


                                                     By: _______________________________________________
                                                         Title: ________________________________________




                                                   EXHIBIT E

                                  FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

     This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and Acceptance") dated as of
                  ,      is made between                            (the "Assignor") and
                                (the "Assignee").

                                                    RECITALS

     WHEREAS, the Assignor is party to that certain Credit Agreement dated as of November 22, 2004 (as amended,
amended and restated, modified, supplemented or renewed, the "Credit Agreement") among The Phoenix Companies,
Inc., Phoenix Life Insurance Company, Phoenix Investment Partners, Ltd., the several financial institutions
from time to time party thereto (including the Assignor, the "Lenders"), Wachovia Bank, National Association,
as Administrative Agent, and certain other agents named therein. Any terms defined in the Credit Agreement and
not defined in this Assignment and Acceptance are used herein as defined in the Credit Agreement;

     WHEREAS, as provided under the Credit Agreement, the Assignor has committed to making Loans (the "Loans")
to the Borrowers in an aggregate amount not to exceed $                   (its "Commitment");

     WHEREAS, the Assignor wishes to assign to the Assignee [part of the] [all] rights and obligations of the
Assignor under the Credit Agreement in respect of its Commitments, together with a corresponding portion of
each of its outstanding Loans, in an amount equal to $                 (the "Assigned Amount") on the terms and
subject to the conditions set forth herein and the Assignee wishes to accept assignment of such rights and to
assume such obligations from the Assignor on such terms and subject to such conditions;

     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties
hereto agree as follows:

SECTION 1.  ASSIGNMENT AND ACCEPTANCE.

     (a)   Subject to the terms and conditions of this Assignment and Acceptance, (i) the Assignor hereby
sells, transfers and assigns to the Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes
from the Assignor, without recourse and without representation or warranty (except as provided in this
Assignment and Acceptance) the Assigned Amount, which constitutes         % (the "Assignee's Percentage Share")
of (A) the Commitment and the Loans of the Assignor and (B) all related rights, benefits, obligations,
liabilities and indemnities of the Assignor under and in connection with the Credit Agreement and the Loan
Documents.



     (b)   With effect on and after the Effective Date (as defined in Section 5 hereof), the Assignee shall be
a party to the Credit Agreement and succeed to all of the rights and be obligated to perform all of the
obligations of a Lender under the Credit Agreement, including the requirements concerning confidentiality and
the payment of indemnification, with a Commitment in an amount equal to the Assigned Amount. The Assignee
agrees that it will perform in accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender. It is the intent of the parties hereto that
the Commitments of the Assignor shall, as of the Effective Date, be reduced by an amount equal to the Assigned
Amount and the Assignor shall relinquish its rights and be released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee; provided, however, the Assignor
shall not relinquish its rights under Sections 13.4 and 13.5 of the Credit Agreement to the extent such rights
relate to the time prior to the Effective Date.

     (c)   After giving effect to the assignment and assumption set forth herein, on the Effective Date the
Assignee's Commitment will be $                .

     (d)   After giving effect to the assignment and assumption set forth herein, on the Effective Date the
Assignor's Commitment will be $               .

SECTION 2.  PAYMENTS.

     (a)   As consideration for the sale, assignment and transfer contemplated in Section 1 hereof, the
Assignee shall pay to the Assignor on the Effective Date in immediately available funds $           .*

     (b)   The [Assignor] further agrees to pay to the Administrative Agent a processing fee in the amount
specified in Section 13.8 of the Credit Agreement.

SECTION 3.  REALLOCATION OF PAYMENTS.

     Any interest, fees and other payments accrued to the Effective Date with respect to the Commitment and
assigned Loans shall be for the account of the Assignor. Any interest, fees and other payments accrued on and
after the Effective Date with respect to the Assigned Amounts shall be for the account of the Assignee. Each of
the Assignor and the Assignee agrees that it will hold in trust for the other party any interest, fees and
other amounts which it may receive to which the other party is entitled pursuant to the preceding sentence and
pay to the other party any such amounts which it may receive promptly upon receipt.

SECTION 4.  INDEPENDENT CREDIT DECISION.

     The Assignee (a) acknowledges that it has received a copy of the Credit Agreement and the Schedules and
Exhibits thereto, together with copies of the most recent financial statements referred to in Section 6.1 of
the Credit Agreement, and such other documents and information as it has deemed appropriate to make its own
credit and legal analysis and decision to enter into this Assignment and Acceptance; and (b) agrees that it
will, independently and without reliance upon

                      
*$ blank may be deleted and the phrase "the amount separately agreed to by Assignor and Assignee" substituted



the Assignor, any Agent or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit and legal decisions in taking or not taking action
under the Credit Agreement.

SECTION 5.  EFFECTIVE DATE; NOTICES.

     (a)    As between the Assignor and the Assignee, the effective date for this Assignment and Acceptance
shall be                      , 20__ (the "Effective Date"); provided that the following conditions
precedent have been satisfied on or before the Effective Date:

           (i)   this Assignment and Acceptance shall be executed and delivered by the Assignor and the
     Assignee;

           (ii)  the consent of the Borrowers and the Administrative Agent required for an effective assignment
     of the Assigned Amounts by the Assignor to the Assignee, under Section 13.8 of the Credit Agreement shall
     have been duly obtained and shall be in full force and effect as of the Effective Date;

           (iii) the Assignee shall pay to the Assignor all amounts due to the Assignor under this Assignment
     and Acceptance;

           (iv)  the processing fee referred to in Section 2(b) hereof and in Section 13.8 of the Credit
     Agreement shall have been paid to the Administrative Agent; and

           (v)   the Assignor shall have assigned and the Assignee shall have assumed a percentage equal to the
                 Assignee's Percentage Share of the rights and obligations of the Assignor with respect to the
                 Loans under the Credit Agreement (if such agreement exists).

     (b)    Promptly following the execution of this Assignment and Acceptance, the Assignor shall deliver to
the Borrowers and the Administrative Agent for acknowledgment by the Administrative Agent, a Notice of
Assignment substantially in the form attached hereto as Schedule 1.

SECTION 6.  [ADMINISTRATIVE AGENT [INCLUDE ONLY IF ASSIGNOR IS ADMINISTRATIVE AGENT]

     (a)    The Assignee hereby appoints and authorizes the Assignor to take such action as administrative
agent on its behalf and to exercise such powers under the Credit Agreement as are delegated to the
Administrative Agent by the Lenders pursuant to the terms of the Credit Agreement.

     (b)    The Assignee shall assume no duties or obligations held by the Assignor in its capacity as
Administrative Agent under the Credit Agreement.



SECTION 7.  WITHHOLDING TAX.

    The Assignee (a) represents and warrants to the Lenders, the Administrative Agent, the Parent, PLIC and PXP
that under applicable law and treaties no tax will be required to be withheld by the Lender with respect to any
payments to be made to the Assignee hereunder, (b) agrees to furnish (if it is organized under the laws of any
jurisdiction other than the United States or any State thereof) to the Administrative Agent and the Parent,
PLIC and PXP prior to the time that the Administrative Agent or the Parent, PLIC or PXP are required to make
any payment of principal, interest or fees hereunder, duplicate executed originals of either U.S. Internal
Revenue Service Form W-8 ECI or U.S. Internal Revenue Service Form W-8 BEN (wherein the Assignee claims
entitlement to the benefits of a tax treaty that provides for a complete exemption from U.S. federal income
withholding tax on all payments hereunder) and agrees to provide new Forms W-8 ECI or W-8 BEN upon the
expiration of any previously delivered form or comparable statements in accordance with applicable U.S. law and
regulations and amendments thereto, duly executed and completed by the Assignee, and (c) agrees to comply with
all applicable U.S. laws and regulations with regard to such withholding tax exemption.

SECTION 8.  REPRESENTATIONS AND WARRANTIES.

    (a)     The Assignor represents and warrants that (i) it is the legal and beneficial owner of the interest
being assigned by it hereunder and that such interest is free and clear of any Lien or other adverse claim;
(ii) it is duly organized and existing and it has the full power and authority to take, and has taken, all
action necessary to execute and deliver this Assignment and Acceptance and any other documents required or
permitted to be executed or delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or approvals of, any Person are
required (other than any already given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance, and apart from any agreements or undertakings or filings required by the Credit
Agreement, no further action by, or notice to, or filing with, any Person is required of it for such execution,
delivery or performance; and (iv) this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable against the Assignor in
accordance with the terms hereof, subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting creditors' rights and to general
equitable principles.

    (b)     The Assignor makes no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any other
instrument or document furnished pursuant thereto. The Assignor makes no representation or warranty in
connection with, and assumes no responsibility with respect to, the solvency, financial condition or statements
of the Borrowers, or the performance or observance by the Borrowers, of any of its respective obligations under
the Credit Agreement or any other instrument or document furnished in connection therewith.

    (c)     The Assignee represents and warrants that (i) it is duly organized and existing and it has full
power and authority to take, and has taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed





or delivered by it in connection with this Assignment and Acceptance, and to fulfill its obligations hereunder;
(ii) no notices to, or consents, authorizations or approvals of, any Person are required (other than any
already given or obtained) for its due execution, delivery and performance of this Assignment and Acceptance;
and apart from any agreements or undertakings or filings required by the Credit Agreement, no further action
by, or notice to, or filing with, any Person is required of it for such execution, delivery or performance;
(iii) this Assignment and Acceptance has been duly executed and delivered by it and constitutes the legal,
valid and binding obligation of the Assignee, enforceable against the Assignee in accordance with the terms
hereof, subject, as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and other laws of
general application relating to or affecting creditors' rights and to general equitable principles; and (iv) it
is an Eligible Assignee.

SECTION 9.  FURTHER ASSURANCES.

    The Assignor and the Assignee each hereby agree to execute and deliver such other instruments, and take
such other action, as either party may reasonably request in connection with the transactions contemplated by
this Assignment and Acceptance, including the delivery of any notices or other documents or instruments to the
Borrowers or the Administrative Agent, which may be required in connection with the assignment and assumption
contemplated hereby.

SECTION 10. MISCELLANEOUS.

    (a)     Any amendment or waiver of any provision of this Assignment and Acceptance shall be in writing and
signed by the parties hereto. No failure or delay by either party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof and any waiver of any breach of the provisions of this
Assignment and Acceptance shall be without prejudice to any rights with respect to any other or further breach
thereof.

    (b)     All payments made hereunder shall be made without any set-off or counterclaim.

    (c)     The Assignor and the Assignee shall each pay its own costs and expenses incurred in connection with
negotiation, preparation, execution and performance of this Assignment and Acceptance.

    (d)     This Assignment and Acceptance may be executed in any number of counterparts and all of such
the counterparts taken together shall be deemed to constitute one and the same instrument.

    (e)     THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK. The Assignor and the Assignee each irrevocably submits to the non-exclusive jurisdiction of
any State or Federal court sitting in New York over any suit, action or proceeding arising out of or relating
to this Assignment and Acceptance and irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State or Federal court. Each party to this Assignment
and Acceptance hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding.




    (f)     THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND AGREEMENTS OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).

    [Other provisions to be added as may be negotiated between the Assignor and the Assignee, provided that
such provisions are not inconsistent with the Credit Agreement.]

    IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment and Acceptance to be executed
and delivered by their duly authorized officers as of the date first above written.

                                                     [ASSIGNOR]

                                                     By: _______________________________________________
                                                         Title: ________________________________________

                                                     Address:

                                                     [ASSIGNEE]

                                                     By: _______________________________________________
                                                         Title: ________________________________________

                                                     Address:




                                                    SCHEDULE A

                                        NOTICE OF ASSIGNMENT AND ACCEPTANCE

                                                                                                           200_

To:      The Administrative Agent
         and the Borrowers under
         the Credit Agreement
         Referenced to below

Ladies and Gentlemen:

We refer to the Credit Agreement dated as of November 22, 2004 (as amended, amended and restated, modified,
supplemented or renewed from time to time the "Credit Agreement") among The Phoenix Companies, Inc., Phoenix
Life Insurance Company, Phoenix Investment Partners, Ltd., the Lenders referred to therein, Wachovia Bank,
National Association, as Administrative Agent, certain other agents named therein. Terms defined in the Credit
Agreement are used herein as therein defined.

    1.      We hereby give you notice of, and request your consent to, the assignment by
                            (the "Assignor") to                              (the "Assignee ") of         
% of the right, title and interest of the Assignor in and to the Credit Agreement to the extent related to the
Loans (including, without limitation, the extension, administration and enforcement of the Loans and further
including, without limitation, the right, title and interest of the Assignor in and to the Commitments of the
Assignor and all outstanding Loans made by the Assignor) pursuant to the Assignment and Acceptance Agreement
attached hereto (the "Assignment and Acceptance").

    2.      The Assignee agrees that, upon receiving the consent of the Administrative Agent and, if applicable,
the Borrowers to such assignment, the Assignee will be bound by the terms of the Credit Agreement as fully and
to the same extent as if the Assignee were the Lender originally holding such interest in the Credit Agreement.

    3.      The following administrative details apply to the Assignee:

                  (A)      Notice Address:
                           Assignee Name:__________________________________________
                           Address:________________________________________________
                                   ________________________________________________
                                   ________________________________________________
                           Attention:______________________________________________
                           Telephone: (___)________________________________________
                           Telecopier:(___)________________________________________



                  (B)      Payment Instructions:
                           Account No.:____________________________________________
                                    At:____________________________________________
                                       ____________________________________________
                                       ____________________________________________
                           Reference:______________________________________________
                           Attention:______________________________________________

    4.      You are entitled to rely upon the representations, warranties and covenants of each of the Assignor
and Assignee contained in the Assignment and Acceptance.

    IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice of Assignment and Acceptance to
be executed by their respective duly authorized officials, officers or agents as of the date first above
mentioned.

                                                     Very truly yours,

                                                     [NAME OF ASSIGNOR]

                                                     By: _______________________________________________
                                                         Title: ________________________________________


                                                     [NAME OF ASSIGNEE]


                                                     By: _______________________________________________
                                                         Title: ________________________________________




ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:

THE PHOENIX COMPANIES, INC.


By:_______________________________________________
     Title:_______________________________________


PHOENIX LIFE INSURANCE COMPANY


By:_______________________________________________
     Title:_______________________________________


PHOENIX INVESTMENT PARTNERS, LTD.


By:_______________________________________________
     Title:_______________________________________


WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent


By:_______________________________________________
     Title:_______________________________________




                                                  SCHEDULE 2.1(a)

                                                    COMMITMENTS

___________________________________________________________________________ __________________
                      BANK                                COMMITMENT          PRO RATA SHARE
                                                            AMOUNT                            
 Wachovia Bank, National Association                    $25,000,000.00            16.7%       
 Bank of New York                                       $20,000,000.00            13.3%       
 PNC Bank National Association                          $20,000,000.00            13.3%       
 JPMorgan Chase Bank                                    $20,000,000.00            13.3%       
 Bank of Montreal                                       $20,000,000.00            13.3%       
 5th/3rd Bank                                           $20,000,000.00            13.3%       
 State Street Bank and Trust Company                    $15,000,000.00            10.0%       
 Webster Bank                                           $10,000,000.00             6.7%       

 Total:                                                $150,000,000.00           100.0%       




                                                 SCHEDULE 5.7(c)

                                     ERISA EVENTS; UNFUNDED PENSION LIABILITY

    (i)     The Phoenix Companies, Inc. Agent Pension Plan, The Phoenix Companies, Inc. Agent Savings and
Investment Plan and The Phoenix Companies, Inc. Nonqualified Supplemental Agent Retirement Plan were each
terminated, effective July 30, 2004.

    (ii)    The Unfunded Pension Liability of The Phoenix Companies, Inc. Employee Pension Plan is set forth in
Footnote 9 of the Parent's Form 10-Q for the quarterly period ended September 30, 2004.




                                                   SCHEDULE 5.16

                                               PRIMARY SUBSIDIARIES

____________________________________________________________  _______________________
 Name                                                         State of Domicile

____________________________________________________________  _______________________
 PM Holdings, Inc.                                            Connecticut

____________________________________________________________  _______________________
 American Phoenix Life and Reassurance Company                Connecticut

____________________________________________________________  _______________________
 PHL Variable Insurance Company                               Connecticut

____________________________________________________________  _______________________
 Phoenix Investment Partners, Ltd.                            Delaware

____________________________________________________________  _______________________
 Phoenix Life Insurance Company                               New York

____________________________________________________________  _______________________
 Phoenix Investment Management Company                        Connecticut

____________________________________________________________  _______________________





                                                   SCHEDULE 7.1

                                             SCHEDULED PERMITTED LIENS

                                                       None


                                                  SCHEDULE 7.7(a)

                                         SCHEDULED CONTINGENT OBLIGATIONS

Contractual Obligations and Commercial Commitments

As of September 30, 2004, our outstanding contractual obligations and commercial commitments were as follows:

Contractual Obligations and
Commercial Commitments:
($ amounts in millions)                                       Remainder    2005 -       2007 -       2009
                                                   Total       of 2004      2006         2008      and Later
                                               ------------- ----------- -----------  ----------- -----------
Contractual Obligations Due

Indebtedness (1)..............................   $     653.7   $    25.0   $   175.0    $   153.7   $   300.0
Stock purchase contracts (2)..................          --          --          --           --          --
Operating lease obligations..................          --          --          --           --          --
Other purchase liabilities (3)(7) .............         114.3         7.7        39.2         34.2        33.2
Other long-term liabilities (8)...............      11,533.8        --          --           --          --
                                               ------------- ----------- -----------  ----------- -----------
Subtotal.....................................   $  12,301.8   $    32.7   $   214.2    $   187.9   $   333.2
Non-recourse collateralized obligations (4)...       1,254.1        --          --           --       1,254.1
                                               ------------- ----------- -----------  ----------- -----------
Total contractual obligations................   $  13,555.9   $    32.7   $   214.2    $   187.9   $ 1,587.3
                                               ============= =========== ===========  =========== ===========

Commercial Commitment Expirations
Standby letters of credit (5).................   $       9.0   $     9.0   $    --      $    --     $    --
Other commercial commitments(6)(7)  ...........         183.6        57.3         3.7         19.2       103.4
                                               ------------- ----------- -----------  ----------- -----------
Total Commercial Commitments.................   $     192.6   $    66.3   $     3.7    $    19.2   $   103.4
                                               ============= =========== ===========  =========== ===========

(1)  Indebtedness amounts include principal only. $153.7 million of indebtedness represents mandatorily
    convertible debt to be settled with our stock in November 2005.
(2)  Stock purchase contracts are prepaid forward contracts issued by us that will be settled in shares of HRH,
    as further described in Note 6 of our consolidated financial statements in Form 10-Q for the quarterly
    period ended September 30, 2004.
(3)  Other purchase liabilities relate to open purchase orders and other contractual obligations.
(4)  Non-recourse obligations are not direct liabilities of ours as they will be repaid from investments pledged
    as collateral recorded on our consolidated balance sheet. See Note 7 to our consolidated financial
    statements in Form 10-Q for the quarterly period ended September 30, 2004 for additional information.
(5)  Our standby letters of credit automatically renew on an annual basis.
(6)  Other commercial commitments relate to venture capital partnerships ($129.1 million) and private placements
    ($54.5 million). The venture capital commitments can be drawn down by private equity funds as necessary to
    fund their portfolio investments through the end of the funding period as stated in each agreement. The
    amount collectively drawn down by the private equity funds in our portfolio during the nine months ended
    September 30, 2004 was $42.8 million. The obligations related to private placements total $54.5 million and
    are due to be funded during the remainder of 2004.
(7)  Obligations and commitments related to post-employment benefit plans and commitments related to recent
    business combinations are not included in amounts presented in this table.
(8)  We offer various investment-type products through which customers deposit funds with us. These products



    typically provide for a rate of interest on the amount invested through the maturity or termination of the
    contract. These obligations are backed by our general account assets, and we bear all of the investment and
    asset/liability management risk on these contracts. Examples of these types of products include annuities
    without life contingencies and universal life insurance policies. These liabilities are reflected within
    "Policy liabilities and accruals" and "Policyholder deposit funds" on our consolidated balance sheet. All
    of these contracts can be surrendered at anytime, some with surrender charges and some without. Because the
    timing of payments under these contracts is subject to significant contractholder discretion, it is not
    possible to segregate the liability into time periods with any certainty.

In addition, on July 29, 2004, we announced the signing of a seven-year $122.0 million services agreement with
EDS under which we will receive information technology infrastructure services.

         Commitments Related to Recent Business Combinations

Under the terms of purchase agreements related to certain recent business combinations, we are subject to
contractual obligations and commitments related to additional purchase consideration and put/call arrangements
summarized as follows:

Kayne Anderson Rudnick

PXP has an arrangement in which existing non-Phoenix members of Kayne Anderson Rudnick will sell a portion of
their membership interests in Kayne Anderson Rudnick, representing 14.7%, to Phoenix at a rate of 33.3% per
year at December 31, 2004, 2005 and 2006. The total purchase price will equal net investment advisory fees for
each year times 4.5 times 4.9% (the proportionate interest purchased). Such amounts are paid during the
following quarter. Under certain circumstances, the purchases may be accelerated.

There is also an arrangement (in the form of a "put/call") with respect to the remaining 25% of the total
membership interests. The purchase price for these interests will be equal to investment advisory fees for the
relevant contract year multiplied by 4.5 multiplied by the amount of membership interest purchased. The
contract year is defined as the twelve months ending December 31, 2006 and each calendar year thereafter. The
pricing on the put/calls will be determined within 60 days after each such year-end and can be exercised within
60 days of the finalization of the price. All of these membership interests acquired will be reissued to
members/employees of Kayne Anderson Rudnick. The reissuance process involves PXP contributing the interests to
Kayne Anderson Rudnick and then Kayne Anderson Rudnick selling the interests to the members/employees. The
members/employees will not pay cash for these purchases but will enter into a note payable agreement with Kayne
Anderson Rudnick. PXP will have preferential distribution rights with respect to payments of principal and
interest on these notes. Under certain circumstances, these interests can be issued without a note payable or
other consideration. In addition, in certain circumstances, the purchases may be accelerated. Once these
interests are purchased and then reissued, the amount of cash that PXP will need to pay to repurchase them in
the future will be based on the growth in Kayne Anderson Rudnick's revenues since the reissuance dates. There
is no expiration date for the put/call agreements. There is no cap or floor on the put/call price.

In January 2004 and August 2003, certain members of Kayne Anderson Rudnick accelerated their put/call
arrangements. The purchase price for their interests totaled $1.7 million and $4.5



million, respectively, which was recorded as additional purchase price by PXP and allocated to goodwill and
definite-lived intangible assets. A portion of the January 2004 put/call effectively increased our ownership
interest in Kayne Anderson Rudnick to 60.3%.

PFG

In May 2003, the Parent acquired the remaining interest in PFG Holdings, Inc. ("PFG") not already owned by the
Parent for initial consideration of $16.7 million. Under the terms of the purchase agreement, the Parent may be
obligated to pay additional consideration of up to $89.0 million to the selling shareholders, including $10.0
million during the remainder of 2004 through 2007, based on certain financial performance targets being met,
and the balance in 2008, based on the appraised value of PFG as of December 31, 2007. During the nine months
ended September 30, 2004, the Parent paid $3.0 million under this obligation.

The Parent has accounted for its acquisition of the remaining interest in PFG as a step-purchase acquisition.
Accordingly, the Parent recorded a definite-lived intangible asset of $9.8 million related to the present value
of future profits acquired and a related deferred tax liability of $3.4 million. The PVFP intangible asset will
be amortized over the remaining estimated life of the underlying insurance inforce acquired, estimated to be 40
years. The remaining acquisition price and transaction costs, totaling $7.6 million, have been assigned to
goodwill.

Seneca

We have an arrangement (in the form of a "put/call") with respect to the membership interests in Seneca not
owned by PXP. The purchase price for these interests is equal to Seneca's investment advisory fees for the
relevant year multiplied by 3.5 multiplied by the amount of the interest purchased. The pricing on the
put/calls will be determined within 60 days after each calendar year-end and can be exercised within 60 days of
the finalization of the price. All of these interests acquired will be reissued to members/employees of Seneca.
The reissuance process involves PXP contributing the interests to Seneca and then Seneca selling them to the
members/employees. The members/employees do not pay cash for these purchases, but enter into a note payable
agreement with Seneca. PXP has preferential distribution rights with respect to payments of principal and
interest on these notes. Since these interests have already been purchased by PXP and reissued at least once,
the amount of cash that PXP will need to pay to repurchase them in the future will be the amount related to the
growth in Seneca's revenues since the various reissuance dates. There is no cap or floor on the put/call price.
The put/call agreements will expire after the year ended December 31, 2007. The estimated amount that will be
payable in 2005 by PNX under these agreements is approximately $4.9 million.



                                                  SCHEDULE 7.7(b)

                                               CERTAIN UNDERTAKINGS

                                          PHOENIX LIFE INSURANCE COMPANY
                                          CAPITAL AND SURPLUS GUARANTEES

- ----------------------------- --------------- -------------------- --------------------------------------------
          Company Name          Board Vote       Guaranteed To               Details of Guarantee
                                   Date
- ----------------------------- --------------- -------------------- --------------------------------------------
AGL Life Assurance Company     December 1999   Standard & Poor's   The Board of Directors commit that for as
                                                                   long as AGL remains a majority-owned
                                                                   subsidiary or until such earlier times as:
                                                                   (1) AGL requests a separate rating from
                                                                   S&P; or (2) S&P on its own initiative
                                                                   determines that AGL requires a separate
                                                                   rating: (a) PLIC shall maintain a net worth
                                                                   of AGL in accordance with the following
                                                                   standard: As of the last day of each
                                                                   calendar quarter, the S&P capital adequacy
                                                                   ratio for AGL will be at least 125%. In the
                                                                   event that this standard is not met, then
                                                                   PLIC shall promptly contribute capital in an
                                                                   amount sufficient to satisfy the standard;
                                                                   and (b) PLIC shall ensure that AGL will have
                                                                   sufficient funds to meet all of its current
                                                                   obligations on a timely basis, including,
                                                                   but not limited to, obligations to pay
                                                                   policy benefits and to provide policyholder
                                                                   services.

                                                                   Until such time as AGL requests a
                                                                   separate rating from S&P or S&P on its
                                                                   own initiative determines that AGL
                                                                   requires a separate rating: (a) in the
                                                                   event that PLIC decides to cause PM
                                                                   Holdings, Inc. to sell AGL, PLIC's
                                                                   officers shall give S&P advance notice
                                                                   of any pending sale; and (b) PLIC shall
                                                                   cause PM Holdings to sell shares of AGL
                                                                   only (i) to another entity(ies) having
                                                                   a rating from S&P equal to or higher
                                                                   than PLIC's; (ii) to the public in a
                                                                   public offering; (iii) to any person,
                                                                   provided that if such person has an S&P
                                                                   rating lower than PLIC's, PLIC agrees
                                                                   to assumptively reinsure all then
                                                                   outstanding policies of AGL to the
                                                                   extent permitted by then applicable
                                                                   laws and regulations; or (iv) under
                                                                   circumstances where PLIC remains the
                                                                   majority shareholder of AGL.

                                                                   PLIC officers shall promptly notify the
                                                                   Board of each capital contribution, if
                                                                   any, that becomes required as a result
                                                                   of this vote.



- ---------------------------------------------------------------------------------------------------------------
          Company Name          Board Vote       Guaranteed To               Details of Guarantee
                                   Date
- ----------------------------- --------------- -------------------- --------------------------------------------
                               December 1999      Other Rating     The Board of Directors commit PLIC to
                                                                   maintaining the net worth of AGL in
                                                                   accordance Agencies with the following
                                                                   standards so long as it remains a
                                                                   majority-owned subsidiary or until
                                                                   such earlier time as: (1) AGL requests a
                                                                   separate rating from such rating agencies;
                                                                   or (2) any such agencies on their own
                                                                   initiative determine that AGL requires a
                                                                   separate rating: As of the last day of each
                                                                   calendar quarter, AGL's "total adjusted
                                                                   capital", as then defined by the NAIC, shall
                                                                   equal at least 200% of the "authorized
                                                                   control level risk-based capital" (as then
                                                                   defined by the NAIC). In the event that this
                                                                   standard is not met, PLIC shall promptly
                                                                   contribute capital in an amount sufficient
                                                                   to satisfy this standard.

                                                                   At least sixty (60) days prior to the
                                                                   effective date of a sale by PLIC of its
                                                                   interest in AGL, the officers shall notify
                                                                   each rating agency relying on this vote
                                                                   about such sale.

                                                                   The officers shall promptly notify the Board
                                                                   of each capital contribution, if any, that
                                                                   becomes required as a result of the vote.
- ----------------------------- --------------- -------------------- --------------------------------------------
AGL Life Assurance Company     February 2000       A.M. Best       The Board of Directors commit PLIC to
                                                                   maintaining the net worth of AGL in
                                                                   accordance with the following standards so
                                                                   long as AGL remains a majority-owned
                                                                   subsidiary of Phoenix or until such earlier
                                                                   time as: (1) AGL requests a separate rating
                                                                   from A.M. Best; or (2) A.M. Best on its own
                                                                   initiative determines that AGL requires a
                                                                   separate rating: As of the last day of each
                                                                   calendar quarter, AGL's "total adjusted
                                                                   capital" shall equal or exceed the minimum
                                                                   level required for an "A" (excellent) rating
                                                                   by A.M. Best.

                                                                   If at any time AGL fails to meet this
                                                                   standard, PLIC shall promptly contribute
                                                                   capital to AGL to an amount sufficient to
                                                                   enable it to do so.

                                                                   The officers shall promptly inform A.M. Best
                                                                   of any definitive agreement to reduce its
                                                                   ownership in AGL.

                                                                   The officers must notify the board of each
                                                                   capital contribution, if any, that becomes
                                                                   required as a result of such votes.
                              --------------- -------------------- --------------------------------------------
                                 June 2001            Maine        That PLIC, as the parent of AGL, will
                                                                   guarantee paid up capital in the amount of
                                                                   $2,500,000 and surplus at $2,500,000 in
                                                                   accordance with Attachment 1 (the
                                                                   Unconditional Guaranty Agreement).

                                                                   PLIC will make any needed contributions from
                                                                   the date of admission of AGL to do business
                                                                   in Maine, in accordance with Attachment 1,
                                                                   should AGL fall below its commitment.



- ---------------------------------------------------------------------------------------------------------------
          Company Name          Board Vote       Guaranteed To               Details of Guarantee
                                   Date
- ----------------------------- --------------- -------------------- --------------------------------------------
                                  May 2002         New Jersey      That PLIC, so long as it continues to be
                                                                   the parent of AGL, will maintain for a
                                                                   minimum of ten years commencing on the
                                                                   effective date of the extension, capital and
                                                                   surplus within AGL that meet or exceed the
                                                                   requirements of the State of New Jersey, as
                                                                   amended at any time during the ten-year
                                                                   period.

                                                                   The obligation imposed by this resolution
                                                                   shall be made binding upon any succeeding
                                                                   parent of AGL as a condition of sale and
                                                                   shall not be modified, revoked or rescinded
                                                                   without the prior approval by the New Jersey
                                                                   Department of Banking and Insurance.

                                                                   AGL was admitted to New Jersey on June 22,
                                                                   1994.
- ----------------------------- --------------- -------------------- --------------------------------------------
American Phoenix Life and       October 1991      New Jersey       That PLIC, as long as it continues to be
Reassurance Company                                                the parent of APLAR, will maintain for a
                                                                   minimum of ten years, commencing on the date
                                                                   of admission in New Jersey, capital and
                                                                   surplus within APLAR that meet or exceed the
                                                                   requirements of the State of New Jersey, as
                                                                   amended at any time during the ten-year
                                                                   period.

                                                                   The obligation imposed by this resolution
                                                                   shall be made binding upon any succeeding
                                                                   parent of APLAR and shall not be modified,
                                                                   revoked or rescinded without prior approval
                                                                   by the New Jersey Insurance Department.

                                                                   APLAR was admitted into New Jersey in April
                                                                   of 1997.
- ----------------------------- --------------- -------------------- --------------------------------------------
American Phoenix Life and      December 1991          Maine        That PLIC, so long as it continues to be
Reassurance Company                                 (Inactive)     the parent of APLAR, will maintain at all
                                                                   times, commencing on the date of admission
                                                                   to the State of Maine, capital and surplus
                                                                   that meet or exceed the requirements of the
                                                                   State of Maine as amended at any time.

                                                                   The obligations imposed by this resolution
                                                                   shall be made binding upon any succeeding
                                                                   parent of APLAR and shall not be modified,
                                                                   revoked or rescinded without prior approval
                                                                   by the Maine Insurance Department.

                                                                   It does not appear that APLAR was ever
                                                                   actually qualified in Maine.



- ---------------------------------------------------------------------------------------------------------------
          Company Name          Board Vote       Guaranteed To               Details of Guarantee
                                   Date
- ----------------------------- --------------- -------------------- --------------------------------------------
                               December 1991        New York       That PLIC, so long as it continues to be
                                                   (Inactive)      the parent of APLAR, will maintain for a
                                                                   minimum of ten years, commencing on the date
                                                                   of admission in New York, capital and
                                                                   surplus within APLAR that meet or exceed the
                                                                   requirements of New York as amended at any
                                                                   time during the ten year period.

                                                                   The obligation imposed by this resolution
                                                                   shall be made binding upon any succeeding
                                                                   parent of APLAR and shall not be modified,
                                                                   revoked or rescinded without prior approval
                                                                   of the New York Insurance Department.

                                                                   APLAR was never admitted in New York.
- ----------------------------- --------------- -------------------- --------------------------------------------
American Phoenix Life and        June 1993           Alaska        That PLIC, so long as it continues to be
Reassurance Company                                                the parent of APLAR, will maintain at all
                                                                   times, commencing on the date of admission
                                                                   in Alaska, capital and surplus within APLAR
                                                                   that meet or exceed the requirements of the
                                                                   State of Alaska.

                                                                   The obligation imposed by this resolution
                                                                   shall be made binding upon any succeeding
                                                                   parent of APLAR and shall not be modified,
                                                                   revoked or rescinded without prior approval
                                                                   by the Alaska Insurance Department.

                                                                   APLAR was admitted into Alaska in September
                                                                   of 1993.
- ---------------------------------------------------------------------------------------------------------------


- ---------------------------------------------------------------------------------------------------------------
          Company Name          Board Vote       Guaranteed To               Details of Guarantee
                                   Date
- ----------------------------- --------------- -------------------- --------------------------------------------
American Phoenix Life and        April 1996    Standard & Poor's   That in order to assure that Standard &
Reassurance Company                                                Poor's Corporation ("S&P") provides a
                                                                   rating for APLAR equal to the rating it
                                                                   gives for PLIC, this Board of Directors
                                                                   hereby commits that for so long as APLAR
                                                                   remains a wholly-owned subsidiary or until
                                                                   such earlier time as: (1) such company
                                                                   requests a separate rating from S&P; or
                                                                   (2) S&P on its own initiative determines
                                                                   that such company requires a separate
                                                                   rating: (a) PLIC shall maintain the net
                                                                   worth of APLAR in accordance with the
                                                                   following standard: As of the last day of
                                                                   each calendar quarter, the S&P capital
                                                                   adequacy ratio for APLAR will be at least
                                                                   150%. In the event that this standard is not
                                                                   met, then PLIC shall promptly contribute
                                                                   capital in an amount sufficient to satisfy
                                                                   this standard; and (b) PLIC shall ensure
                                                                   that APLAR will have sufficient funds to
                                                                   meet all of its current obligations on a
                                                                   timely basis, including, but not limited to,
                                                                   obligations to pay policy benefits and to
                                                                   provide policyholder services.

                                                                   That the Board of Directors hereby agrees
                                                                   that it has no present intentions to cause
                                                                   PM Holdings, Inc., a wholly-owned
                                                                   subsidiary, to sell APLAR and that, until
                                                                   such time as APLAR requests a separate
                                                                   rating from S&P or S&P on its own initiative
                                                                   determines that such company requires a
                                                                   separate rating: (a) in the event that PLIC
                                                                   at any time decides to cause PM Holdings,
                                                                   Inc. to sell APLAR, PLIC's officers shall
                                                                   give S&P advance notice of any pending sale;
                                                                   and (b) PLIC shall cause PM Holdings to sell
                                                                   shares of APLAR only: (i) to another entity
                                                                   or entities having a rating from S&P equal
                                                                   to or higher than PLIC's; (ii) to the public
                                                                   in a public offering; (iii) to any person,
                                                                   provided that if such person has an S&P
                                                                   rating lower than PLIC's, PLIC agrees to
                                                                   assumptively reinsure all then outstanding
                                                                   policies of APLAR to the extent permitted by
                                                                   then applicable laws and regulations; or
                                                                   (iv) under circumstances where the Company
                                                                   remains the majority shareholder of APLAR.

                                                                   Officers shall promptly notify the PLIC
                                                                   Board of each capital contribution, if any,
                                                                   that becomes required as a result of such
                                                                   resolutions.



- ---------------------------------------------------------------------------------------------------------------
          Company Name          Board Vote       Guaranteed To               Details of Guarantee
                                   Date
- ----------------------------- --------------- -------------------- --------------------------------------------
                                April 1996       Other Rating      That, in order to assure that various
                                                   Agencies        rating agencies provide a rating for APLAR
                                                                   equal to the rating they give for PLIC, the
                                                                   PLIC Board of Directors hereby commits PLIC
                                                                   to maintaining the net worth of APLAR in
                                                                   accordance with the following standards so
                                                                   long as it remains a wholly-owned subsidiary
                                                                   or until such earlier time as: (1) such
                                                                   company requests a separate rating from such
                                                                   agencies; or (2) any such agencies on their
                                                                   own initiative determine that APLAR requires
                                                                   a separate rating.

                                                                   As of the last day of each calendar quarter,
                                                                   APLAR's "total adjusted capital", as then
                                                                   defined by the NAIC, shall equal at least
                                                                   300% of the "authorized control level
                                                                   risk-based capital" (as then defined by the
                                                                   NAIC). In the event that this standard is
                                                                   not met, then PLIC shall promptly contribute
                                                                   capital in an amount sufficient to satisfy
                                                                   this standard.

                                                                   Officers shall promptly notify the PLIC
                                                                   Board of each capital contribution, if any,
                                                                   that becomes required as a result of such
                                                                   resolutions.
- ----------------------------- --------------- -------------------- --------------------------------------------
American Phoenix Life and       October 1996      New Jersey       That PLIC, so long as it continues to be
Reassurance Company                                                the parent of APLAR, will maintain for a
                                                                   minimum of ten years, commencing on the date
                                                                   of admission in New Jersey, capital and
                                                                   surplus within APLAR that meet or exceed the
                                                                   requirements of the State of New Jersey, as
                                                                   amended at any time during the ten-year
                                                                   period.

                                                                   That the obligation imposed by this
                                                                   resolution shall be made binding upon any
                                                                   succeeding parent of APLAR and shall not be
                                                                   modified, revoked or rescinded without prior
                                                                   approval by the New Jersey Insurance
                                                                   Department.

                                                                   APLAR was admitted into New Jersey in May of
                                                                   1997.
- ---------------------------------------------------------------------------------------------------------------


- ---------------------------------------------------------------------------------------------------------------
          Company Name          Board Vote       Guaranteed To               Details of Guarantee
                                   Date
- ----------------------------- --------------- -------------------- --------------------------------------------
PHL Variable Insurance          August 1994     Standard & Poor's  That, in order to assure that Standard &
Company                                                            Poor's Corporation ("S&P") provides a
                                                                   rating for PHLVIC, a wholly-owned subsidiary
                                                                   of this Company, equal to the rating it
                                                                   gives for PLIC, the PLIC board of directors
                                                                   hereby commits that for so long as PHLVIC
                                                                   remains a wholly-owned subsidiary or until
                                                                   such earlier time as: (1) APLAR requests a
                                                                   separate rating from S&P; or (2) S&P on its
                                                                   own initiative determines that such company
                                                                   requires a separate rating: (a) PLIC shall
                                                                   maintain the net worth of PHLVIC in
                                                                   accordance with the following standard: As
                                                                   of the last day of each calendar quarter,
                                                                   the sum of PHLVIC's statutory surplus and
                                                                   its Asset Valuation Reserve (AVR) shall be
                                                                   such that the resulting adjusted surplus,
                                                                   calculated in accordance with the
                                                                   methodology employed by S&P, shall be at
                                                                   least 50% greater than S&P's calculated
                                                                   risk-adjusted capital for said subsidiary.
                                                                   In the event that upon completion of the
                                                                   preparation of any quarter's financial
                                                                   statements, PHLVIC determines that as of the
                                                                   last day of such quarter the preceding
                                                                   standard was not met, then PLIC shall
                                                                   promptly cause a capital contribution to be
                                                                   made to PHLVIC in an amount sufficient to
                                                                   cause PHLVIC to again comply with the
                                                                   standard; and (b) PLIC shall ensure that
                                                                   PHLVIC has sufficient funds to meet all of
                                                                   its current obligations on a timely basis,
                                                                   including, but not limited to, obligations
                                                                   to pay policy benefits and to provide
                                                                   policyholder services.

                                                                   That the PLIC board of directors hereby
                                                                   agrees that it has no present intentions to
                                                                   cause PM Holdings, Inc., a wholly-owned
                                                                   subsidiary, to sell PHVLIC and that, until
                                                                   such time as PHLVIC requests a separate
                                                                   rating from S&P or S&P on its own initiative
                                                                   determines that PHLVIC requires a separate
                                                                   rating: (a) in the event that PLIC at any
                                                                   time decides to cause PM Holdings to sell
                                                                   PHLVIC, PLIC's officers shall give S&P
                                                                   advance notice of any pending sale; and (b)
                                                                   PLIC shall cause PM Holdings to sell shares
                                                                   of PHLVIC only: (i) to another entity or
                                                                   entities having a rating from S&P equal to
                                                                   or higher than the Company's; (ii) to the
                                                                   public in a public offering; (iii) to any
                                                                   person, provided that if such person has an
                                                                   S&P rating lower than the Company's, the
                                                                   Company agrees to assumptively reinsure all
                                                                   then outstanding policies of PHLVIC to the
                                                                   extent permitted by then applicable laws and
                                                                   regulations; or (iv) under circumstances
                                                                   where PLIC remains the majority shareholder
                                                                   of PHLVIC.

                                                                   PLIC officers shall promptly notify the PLIC
                                                                   board of each capital contribution, if any,
                                                                   that becomes required as a result of such
                                                                   resolutions.
- ---------------------------------------------------------------------------------------------------------------


- ---------------------------------------------------------------------------------------------------------------
          Company Name          Board Vote       Guaranteed To               Details of Guarantee
                                   Date
- ----------------------------- --------------- -------------------- --------------------------------------------
PHL Variable Insurance          August 1994         A.M. Best      That, in order to ensure that the rating
Company                                                            agencies each provide a rating for PHLVIC,
                                                                   a wholly-owned subsidiary of PLIC, equal to
                                                                   the rating they give for PLIC, the PLIC
                                                                   board of directors hereby commits PLIC to
                                                                   maintaining the net worth of PHLVIC in
                                                                   accordance with the following standard so
                                                                   long as it remains a wholly-owned subsidiary
                                                                   or until such earlier time as: (1) PHLVIC
                                                                   requests a separate rating from such
                                                                   agencies; or (2) any of such agencies on
                                                                   their own initiative determine that PHLVIC
                                                                   requires a separate rating.

                                                                   As of the last day of the calendar quarter,
                                                                   the officers shall calculate PHLVIC's
                                                                   risk-based capital level, as then defined by
                                                                   the NAIC. In the event that PHLVIC's "total
                                                                   adjusted capital", as then defined by the
                                                                   NAIC, is not, as of any such date, at least
                                                                   200% greater than PHLVIC's "authorized
                                                                   control level risk-based capital" (as
                                                                   defined by the NAIC), then this Company
                                                                   shall cause a capital contribution to be
                                                                   made to PHLVIC in an amount sufficient to
                                                                   cause PHLVIC to comply with such standard.

                                                                   Officers shall promptly notify the PLIC
                                                                   Board of each capital contribution, if any,
                                                                   that becomes required as a result of such
                                                                   resolution.

                                                                   These resolutions shall supersede in all
                                                                   respects the resolutions passed on June 20,
                                                                   1994 concerning an A.M. Best rating for
                                                                   PHLVIC.
- ------------------------------ --------------- -------------------- -------------------------------------------
PHL Variable Insurance          August 2002        California      That, in order to enable PHLVIC to obtain a
Company                                                            certificate of authority to market variable
                                                                   life insurance products in California,
                                                                   PLIC's board of directors hereby commits
                                                                   that for so long as PHLVIC remains a
                                                                   wholly-owned subsidiary of PLIC, it shall
                                                                   maintain PHLVIC according to the following
                                                                   standards: (1) At all times, PHLVIC shall
                                                                   maintain a combined capital and surplus of
                                                                   at least $10,000,000 as required by
                                                                   California Insurance Code Section 10506;
                                                                   and/or (2) At all times, PHLVIC's adjusted
                                                                   capital, as defined by California Insurance
                                                                   Code Section 739, shall be at least 250% of
                                                                   the authorized control level RBC, as defined
                                                                   in California Insurance Code Section 739. If
                                                                   at any time PHLVIC determines that the
                                                                   preceding standard was not met, then this
                                                                   Company shall promptly cause a capital
                                                                   contribution to be made to PHLVIC in an
                                                                   amount sufficient to cause PHLVIC to again
                                                                   comply with the standards.

                                                                   That the officers shall promptly notify
                                                                   PLIC's board of each capital contribution,
                                                                   if any, that becomes required as a result of
                                                                   such resolution.
- ---------------------------------------------------------------------------------------------------------------


- ---------------------------------------------------------------------------------------------------------------
          Company Name          Board Vote       Guaranteed To               Details of Guarantee
                                   Date
- ----------------------------- --------------- -------------------- --------------------------------------------
Phoenix Life and Annuity        April 1996     Standard & Poor's   That in order to assure that Standard &
Company                                                            Poor's Corporation ("S&P") provides a
                                                                   rating for PLAC equal to the rating it gives
                                                                   for PLIC, this Board of Directors hereby
                                                                   commits that for so long as PLAC remains a
                                                                   wholly-owned subsidiary or until such
                                                                   earlier time as: (1) such company requests a
                                                                   separate rating from S&P; or (2) S&P on its
                                                                   own initiative determines that such company
                                                                   requires a separate rating: (a) PLIC shall
                                                                   maintain the net worth of PLAC in accordance
                                                                   with the following standard: As of the last
                                                                   day of each calendar quarter, the S&P
                                                                   capital adequacy ratio for PLAC will be at
                                                                   least 150%. In the event that this standard
                                                                   is not met, then PLIC shall promptly
                                                                   contribute capital in an amount sufficient
                                                                   to satisfy this standard; and (b) PLIC shall
                                                                   ensure that PLAC will have sufficient funds
                                                                   to meet all of its current obligations on a
                                                                   timely basis, including, but not limited to,
                                                                   obligations to pay policy benefits and to
                                                                   provide policyholder services.

                                                                   That the Board of Directors hereby agrees
                                                                   that it has no present intentions to cause
                                                                   PM Holdings, Inc., a wholly-owned
                                                                   subsidiary, to sell PLAC and that, until
                                                                   such time as PLAC requests a separate rating
                                                                   from S&P or S&P on its own initiative
                                                                   determines that such company requires a
                                                                   separate rating: (a) in the event that PLIC
                                                                   at any time decides to cause PM Holdings,
                                                                   Inc. to sell PLAC, PLIC's officers shall
                                                                   give S&P advance notice of any pending sale;
                                                                   and (b) PLIC shall cause PM Holdings to sell
                                                                   shares of PLAC only: (i) to another entity
                                                                   or entities having a rating from S&P equal
                                                                   to or higher than PLIC's; (ii) to the public
                                                                   in a public offering; (iii) to any person,
                                                                   provided that if such person has an S&P
                                                                   rating lower than PLIC's, PLIC agrees to
                                                                   assumptively reinsure all then outstanding
                                                                   policies of PLAC to the extent permitted by
                                                                   then applicable laws and regulations; or
                                                                   (iv) under circumstances where the Company
                                                                   remains the majority shareholder of PLAC.

                                                                   Officers shall promptly notify the PLIC
                                                                   Board of each capital contribution, if any,
                                                                   that becomes required as a result of such
                                                                   resolutions.
- ---------------------------------------------------------------------------------------------------------------


- ---------------------------------------------------------------------------------------------------------------
          Company Name          Board Vote       Guaranteed To               Details of Guarantee
                                   Date
- ----------------------------- --------------- -------------------- --------------------------------------------
Phoenix Life and Annuity        April 1996       Other Rating      That, in order to assure that various
Company                                            Agencies        rating agencies  provide a rating for PLAC
                                                                   equal to the rating they give for PLIC, the
                                                                   PLIC Board of Directors hereby commits PLIC
                                                                   to maintaining the net worth of PLAC in
                                                                   accordance with the following standards so
                                                                   long as it remains a wholly-owned subsidiary
                                                                   or until such earlier time as: (1) such
                                                                   company requests a separate rating from such
                                                                   agencies; or (2) any such agencies on their
                                                                   own initiative determine that PLAC requires
                                                                   a separate rating.

                                                                   As of the last day of each calendar quarter,
                                                                   PLAC's "total adjusted capital", as then
                                                                   defined by the NAIC, shall equal at least
                                                                   300% of the "authorized control level
                                                                   risk-based capital" (as then defined by the
                                                                   NAIC). In the event that this standard is
                                                                   not met, then PLIC shall promptly contribute
                                                                   capital in an amount sufficient to satisfy
                                                                   this standard.

                                                                   Officers shall promptly notify the PLIC
                                                                   Board of each capital contribution, if any,
                                                                   that becomes required as a result of such
                                                                   resolutions.
                              --------------- -------------------- --------------------------------------------
                               February 1997        Virginia       That PLIC, so long as it continues to have
                                                                   management control over PLAC and until PLAC
                                                                   has achieved three (3) consecutive years of
                                                                   profitable operations as a direct writer,
                                                                   will maintain, commencing on the date of
                                                                   admission in Virginia, capital and surplus
                                                                   within PLAC that meets or exceeds the
                                                                   requirements of the State of Virginia, as
                                                                   amended at any time during that period.

                                                                   That the obligation imposed by this
                                                                   resolution shall be made binding upon any
                                                                   succeeding entity having management control
                                                                   over PLAC and shall not be modified, revoked
                                                                   or rescinded without prior approval by the
                                                                   Virginia Bureau of Insurance.

                                                                   PLAC was admitted to do business in Virginia
                                                                   in September of 1997.
                              --------------- -------------------- --------------------------------------------
                                August 1999        New Jersey      That PLIC, so long as it continues to be
                                                                   the parent of PLAC, will maintain for a
                                                                   minimum of ten years, commencing on the date
                                                                   of admission in New Jersey, capital and
                                                                   surplus within PLAC that meets or exceeds
                                                                   the requirements of the State of New Jersey,
                                                                   as amended at any time during the ten-year
                                                                   period.

                                                                   That the obligation imposed by this
                                                                   resolution shall be made binding upon any
                                                                   succeeding parent of PLAC and shall not be
                                                                   modified, revoked or rescinded without prior
                                                                   approval by the New Jersey Department of
                                                                   Banking and Insurance.

                                                                   PLAC was admitted to New Jersey on July 30,
                                                                   2001.
- ---------------------------------------------------------------------------------------------------------------


- ---------------------------------------------------------------------------------------------------------------
          Company Name          Board Vote       Guaranteed To               Details of Guarantee
                                   Date
- ----------------------------- --------------- -------------------- --------------------------------------------
Phoenix Life and Reassurance     April 1996     Standard & Poor's  That in order to assure that Standard &
Company of New York                                                Poor's Corporation ("S&P") provides a
                                                                   rating for PLARNY equal to the rating it
                                                                   gives for PLIC, this Board of Directors
                                                                   hereby commits that for so long as PLARNY
                                                                   remains a wholly-owned subsidiary or until
                                                                   such earlier time as: (1) such company
                                                                   requests a separate rating from &P; or (2)
                                                                   S&P on its own initiative determines that
                                                                   such company requires a separate rating: (a)
                                                                   PLIC shall maintain the net worth of PLARNY
                                                                   in accordance with the following standard:
                                                                   As of the last day of each calendar quarter,
                                                                   the S&P capital adequacy ratio for PLARNY
                                                                   will be at least 150%. In the event that
                                                                   this standard is not met, then PLIC shall
                                                                   promptly contribute capital in an amount
                                                                   sufficient to satisfy this standard; and (b)
                                                                   PLIC shall ensure that PLARNY will have
                                                                   sufficient funds to meet all of its current
                                                                   obligations on a timely basis, including,
                                                                   but not limited to, obligations to pay
                                                                   policy benefits and to provide policyholder
                                                                   services.

                                                                   That the Board of Directors hereby agrees
                                                                   that it has no present intentions to cause
                                                                   PM Holdings, Inc., a wholly-owned
                                                                   subsidiary, to sell PLARNY and that, until
                                                                   such time as PLARNY requests a separate
                                                                   rating from S&P or S&P on its own initiative
                                                                   determines that such company requires a
                                                                   separate rating: (a) in the event that PLIC
                                                                   at any time decides to cause PM Holdings,
                                                                   Inc. to sell PLARNY, PLIC's officers shall
                                                                   give S&P advance notice of any pending sale;
                                                                   and (b) PLIC shall cause PM Holdings to sell
                                                                   shares of PLARNY only: (i) to another entity
                                                                   or entities having a rating from S&P equal
                                                                   to or higher than PLIC's; (ii) to the public
                                                                   in a public offering; (iii) to any person,
                                                                   provided that if such person has an S&P
                                                                   rating lower than PLIC's, PLIC agrees to
                                                                   assumptively reinsure all then outstanding
                                                                   policies of PLARNY\ to the extent permitted
                                                                   by then applicable laws and regulations; or
                                                                   (iv) under circumstances where the Company
                                                                   remains the majority shareholder of PLARNY.

                                                                   Officers shall promptly notify the PLIC
                                                                   Board of each capital contribution, if any,
                                                                   that becomes required as a result of such
                                                                   resolutions.
- ---------------------------------------------------------------------------------------------------------------


- ---------------------------------------------------------------------------------------------------------------
          Company Name          Board Vote       Guaranteed To               Details of Guarantee
                                   Date
- ----------------------------- --------------- -------------------- --------------------------------------------
Phoenix Life and Reassurance     April 1996       Other Rating     That, in order to assure that various
Company of New York                                 Agencies       rating agencies provide a rating for PLARNY
                                                                   equal to the rating they give for PLIC, the
                                                                   PLIC Board of Directors hereby commits PLIC
                                                                   to maintaining the net worth of PLARNY in
                                                                   accordance with the following standards so
                                                                   long as it remains a wholly-owned subsidiary
                                                                   or until such earlier time as: (1) such
                                                                   company requests a separate rating from such
                                                                   agencies; or (2) any such agencies on their
                                                                   own initiative determine that PLARNY
                                                                   requires a separate rating.

                                                                   As of the last day of each calendar quarter,
                                                                   PLARNY's "total adjusted capital", as then
                                                                   defined by the NAIC, shall equal at least
                                                                   300% of the "authorized control level
                                                                   risk-based capital" (as then defined by the
                                                                   NAIC). In the event that this standard is
                                                                   not met, then PLIC shall promptly contribute
                                                                   capital in an amount sufficient to satisfy
                                                                   this standard.

                                                                   Officers shall promptly notify the PLIC
                                                                   Board of each capital contribution, if any,
                                                                   that becomes required as a result of such
                                                                   resolutions.
- ----------------------------- --------------- -------------------- --------------------------------------------
Phoenix National Insurance      August 1998        New Jersey      That PLIC, so long as it continues to be
Company                                                            the parent of PNIC, will maintain for a
                                                                   minimum of ten years, commencing on the date
                                                                   of admission in New Jersey, capital and
                                                                   surplus within PNIC that meet or exceed the
                                                                   requirements of the State of New Jersey, as
                                                                   amended at any time during the ten year
                                                                   period.

                                                                   That the obligation imposed by this
                                                                   resolution shall be made binding upon any
                                                                   succeeding parent of PNIC and shall not be
                                                                   modified, revoked or rescinded without prior
                                                                   approval by the New Jersey Department of
                                                                   Banking and Insurance.

                                                                   PNIC was admitted to New Jersey on July 1,
                                                                   1999.
- ---------------------------------------------------------------------------------------------------------------

EX-99.10.31

                                                                                                Exhibit 10.31

                                                    PHOENIX
                                                 Mike Haylon's

                                      INDIVIDUAL LONG-TERM INCENTIVE PLAN

                                                  2004 - 2006






                                                    PHOENIX
                                                 Mike Haylon's
                                      INDIVIDUAL LONG-TERM INCENTIVE PLAN
                                                   2004-2006

                                                    PURPOSE

To provide a meaningful reward in recognition of your new responsibilities as Chief Financial Officer. To
further align your interests with the interests of shareholders.

                                              BASIC PLAN CONCEPTS

This plan is a Long-Term Performance Unit plan. A Long-Term Performance Unit plan provides a contingent grant
of RSUs at the beginning of the performance Cycle that represents the Target Units to be earned at the end of
the performance cycle. A RSU represents the right to receive one share of PNX common stock. The Target Units
are based on a $___ million target award divided by PNX's stock price as of January 2, 2004. The number of RSUs
actually earned at the end of the cycle may be higher than the Target Units, depending on the extent to which
the performance objectives are achieved. The maximum units are based on a $___ million maximum award divided by
PNX's stock price as of January 2, 2004. The ultimate value of the award depends on both the number of RSUs
earned and PNX's stock price at the end of the cycle.

PERFORMANCE CRITERIA:
Your actual RSUs awarded at the end of the Performance Cycle will be based on the achievement of the following
performance criteria:

75% BASED UPON ACHIEVEMENT OF KEY FINANCIAL GOALS:

                                            Maximum Award                      Target Award
                                            (   RSUs)                          (   RSUs)
o    Return on Equity*                      ___%                                ___%
o    EPS Growth**                           ___% CAGR***                        ___% CAGR***
o    Statutory Capital Growth               ___% CAGR***                        ___% CAGR***


*Cash ROE from continuing operations including the Closed Block; excluding Venture Capital and FAS 115 Reserve
**EPS defined using cash operating income from continuing operations including the Closed Block, excluding
Venture Capital
***CAGR defined as compound annual growth rate measured from the year ended 2003 through December 31, 2006.

This component of the plan will not pay unless target financial goals are reached and RBC ratio is maintained
at ___%. Awards between target and maximum will be calculated on a pro-rata basis.

                                                       2


25% based upon individual performance (maximum award = ___ RSUS, target = ___ RSUS)

     o  Individual contribution to achievement of company objectives
     o  Successful establishment of Corporate Risk Management function


Actual Award Determination:
The Performance Cycle is a three-year cycle from January 1, 2004 through December 31, 2006, with awards
determined in the first quarter following the end of the cycle. This award will be reviewed by the Compensation
Committee of the Board of Directors.

Payment of Awards and Retention Requirements:
Awards for this Performance Cycle will be determined in first quarter 2007 and paid in PNX restricted stock
units. Unless you elect otherwise, RSUs will immediately convert into shares of PNX common stock. Based on the
share ownership and retention guidelines, you will be required to hold a fixed percentage of the shares to help
you attain your ownership guideline of a multiple of your base salary; you will be able to sell the remaining
award upon receipt.

You may elect to receive delivery of the shares when awarded, or may defer delivery of all or some of the
shares until retirement or a specified future date. Consistent with the share ownership guidelines, RSUs that
you elect to defer will count as share holdings for the purpose of meeting the guidelines. This election to
defer must be made during an open trading window, but in any event, by December 31, 2006 and is subject to the
withdrawal requirements required by deferred compensation rules.

If you leave the company due to death, disability or approved retirement during this Performance Cycle, your
award will be determined by prorating the percentage of your Target Units according to the number of months
that you were actively at work. You will receive full credit for your last month even if you only worked part
of that month. Any shares of PNX Common Stock that would have been issuable, shall be delivered to you or your
beneficiary or estate as soon as practical following the determination of results.

If your employment with the company is terminated during the Performance Cycle for any other reason, you will
not receive an award.

Impact On Benefits:

Long-Term incentive payments made under the plan will not be used for determining pay-related benefits under
either qualified or nonqualified benefit plans maintained by Phoenix.

                                                       3

EX-99.10.35

                                                                                                    Exhibit 10.35

                                          CHANGE IN CONTROL AGREEMENT

         This Change in Control Agreement (this "Agreement") is as of January 1, 2003, and is between The Phoenix
Companies, Inc., a Delaware corporation (the "Company"), and John F. Sharry (the "Executive").

         The Company or one of its Affiliates (as defined below) has employed the Executive in an officer
position and has determined that the Executive holds a critical position with the Company and/or such
Affiliate.

         The Company believes that, in the event it is confronted with a situation that could result in a
change in ownership or control of the Company, continuity of management will be essential to its ability to
evaluate and respond to such situation in the best interests of its shareholders.

         The Company understands that any such situation will present significant concerns for the Executive
with respect to the Executive's financial and job security. The Company desires to assure the Company and its
Affiliates of the Executive's services during the period in which it is confronting such a situation, and to
provide the Executive certain financial assurances to enable the Executive to perform the responsibilities of
the Executive's position without undue distraction and to exercise the Executive's judgment without bias due to
the Executive's personal circumstances. To achieve these objectives, the Company and the Executive desire to
enter into an agreement providing the Company and its Affiliates and the Executive with certain rights and
obligations upon the occurrence of a Change of Control (as defined below).

         The Company and the Executive therefore agree as follows:

         1. Operation of Agreement. (a) Term. The initial term of this Agreement shall commence on the date of
this Agreement and continue until the third anniversary of the date of this Agreement. Thereafter, the term of
this Agreement will automatically renew for up to two successive and consecutive additional one-year periods
following the end of its initial term and any extended term, unless the Company or the Executive gives the
other party written notice at least 12 months prior to the date the term would otherwise renew that it or the
Executive does not want the term to be so extended; provided that the Company may not deliver a notice of
nonrenewal after a Change of Control. At the option of the Company, which shall be exercised by the affirmative
action of its Board of Directors (the "Board") or a duly authorized committee thereof, the term of this
Agreement may also be extended after such two renewal periods for such period or periods as the Board or such
committee shall specify. Notwithstanding anything to the contrary in this Agreement, the term of this Agreement
shall in all events expire (regardless of when the term would otherwise have expired) on the second anniversary
of a Change of Control; provided that any payment obligations hereunder resulting from the Executive's
termination of employment prior to the expiration of the term shall continue in full force and effect following
the expiration of the term.



      (b)   Effective Date.  If a Change of Control occurs during the term of this Agreement, this Agreement shall
            govern the terms and conditions of the Executive's employment and the benefits and compensation to
            be provided to the Executive commencing on the date on which a Change of Control occurs (the
            "Effective Date") and ending on the second anniversary of the Effective Date; provided that if the
            Executive is not employed by the Company or one of its Affiliates on the Effective Date, this
            Agreement shall be void and without effect, shall not constitute a contract of employment or a
            guarantee of employment for any period of time, and shall not limit in any way the right of the
            Company or its Affiliates to change the terms and conditions of the Executive's employment or to
            terminate the Executive's employment. Notwithstanding the preceding sentence, in the event that the
            Executive's employment with the Company and its Affiliates is terminated in connection with a
            Change of Control (which shall in all events be deemed the case if such termination is within 90
            days prior to the Effective Date and deemed not to be the case if such termination is more than 180
            days before the Effective Date) without Cause or for Good Reason (as such terms are defined in
            Sections 6(c) and 6(d) below, but without regard to the requirement under Section 6(d) that such
            termination occur after the Effective Date), the Executive shall be entitled to receive the
            benefits provided under Section 7(c), but only to the extent that such benefits are in excess of
            those previously received by the Executive as a result of the Executive's prior termination.

            2. Definitions.

            (a)  Affiliate. An "Affiliate" shall mean any corporation, partnership, limited liability company,
      trust or other entity which directly, or indirectly through one or more intermediaries, controls, is under
      common control with, or is controlled by, the Company.

            (b)  Change of Control. For the purposes of this Agreement, a "Change of Control" shall mean
      the first occurrence of:

                 (i) any Person acquires "beneficial ownership" (within the meaning of Rule 13d-3 under the
            Securities Exchange Act of 1934, as amended (the "Exchange Act")), directly or indirectly, of
            securities of the Company representing 25% or more of the combined Voting Power of the Company's
            securities;

                 (ii) within any 24-month period, the persons who were directors of the Company at the
            beginning of such period (the "Incumbent Directors") shall cease to constitute at least a majority
            of the Board or the board of directors of any successor to the Company; provided that any director
            elected or nominated for election to the Board by a

                                                       2


            majority of the Incumbent Directors then still in office shall be deemed to be an Incumbent Director for
            purposes of this subclause 2(b)(ii);

                 (iii) the effective date of any merger, consolidation, share exchange, division, sale or other
            disposition of all or substantially all of the assets of the Company which is consummated (a
            "Corporate Event"), if immediately following the consummation of such Corporate Event the
            stockholders of the Company immediately prior to such Corporate Event do not hold, directly or
            indirectly, a majority of the Voting Power, in substantially the same proportion as prior to such
            Corporate Event, of (x) in the case of a merger or consolidation, the surviving or resulting
            corporation or (y) in the case of a division or a sale or other disposition of assets, each
            surviving, resulting or acquiring corporation which, immediately following the relevant Corporate
            Event, holds more than 25% of the consolidated assets of the Company immediately prior to such
            Corporate Event;

                 (iv) the approval by stockholders of the Company of a plan of liquidation with respect to the
            Company; or

                 (v) any other event occurs which the Board declares to be a Change of Control.

            (c) Person. For purposes of the definition of Change of Control, "Person" shall have the same
      meaning ascribed to such term in Section 3(a)(9) of the Exchange Act, as supplemented by Section 13(d)(3)
      of the Exchange Act, and shall include any group (within the meaning of Rule 13d-5(b) under the Exchange
      Act); provided that "Person" shall not include (i) the Company or any of its Affiliates, or (ii) any
      employee benefit plan (including an employee stock ownership plan) sponsored by the Company or any of its
      Affiliates.

            (d) Voting Power. "Voting Power" shall mean such number of Voting Securities as shall enable the
      holders thereof to cast all the votes which could be cast in an annual election of directors of a
      company, and "Voting Securities" shall mean all securities entitling the holders thereof to vote in an
      annual election of directors of a company.

            3. Employment Period. The period during which the Executive remains employed with the Company or
any Affiliate following the Effective Date through the expiration of the term of this Agreement shall be referred
to herein as the "Employment Period."

            4. Business Time. During the Employment Period, the Executive shall devote substantially Executive's
full business time and efforts to the performance of Executive's duties on behalf of the Company, except for
(i) time spent in managing the Executive's personal, financial and legal affairs and serving on civic or
charitable boards or committees, in each case only if and to the extent not substantially interfering with the

                                                       3


performance of such responsibilities, and (ii) periods of vacation and sick leave to which the Executive is
entitled. It is expressly understood and agreed that the Executive's continuing to serve on any boards and
committees on which the Executive is serving or with which the Executive is otherwise associated immediately
preceding the Effective Date shall not be deemed to interfere with the performance of the Executive's services
to the Company and its Affiliates. Moreover, so long as the following activities do not (individually or in the
aggregate) materially interfere with the performance of the Executive's duties with the Company and are
conducted in compliance with the Company's Code of Conduct (as in effect from time to time), the Executive may
(i) participate in charitable, civic, educational, professional, community or industry affairs or serve on the
boards of directors or advisory boards of other not for profit companies, and (ii) manage his/her and his/her
family's personal investments. Executive may serve on the boards of directors or similar governing bodies of
any for profit entity with the prior written consent of the Company's Chief Executive Officer as long as such
service is not in violation of the Company's Code of Conduct.

            5. Compensation. (a) Base Salary. During the Employment Period, the Executive shall receive a base
salary at a monthly rate at least equal to the monthly salary paid to the Executive immediately prior to the
Effective Date. The base salary may be increased (but not decreased) at any time and from time to time by
action of the Board or any committee thereof, the board of directors of any Affiliate or any committee thereof
in the event the Executive is employed by an Affiliate, and any individual having authority to take such action
in accordance with the Company's or any Affiliate's regular practices. The Executive's base salary, as it may
be increased from time to time, shall hereafter be referred to as the "Base Salary".

            (b) Total Compensation. During the Employment Period, the total compensation opportunities made
available to the Executive in such year in the form of short-term incentive compensation and long-term
incentive compensation ("Total Compensation") shall not be less than the Total Compensation made available to the
Executive immediately prior to the Effective Date. For purposes of this Section 5(b), the amount of Total
Compensation made available to the Executive, whether prior to or after a Change of Control, shall be
conclusively determined by an independent compensation consultant selected by the Company prior to the
occurrence of a Change of Control (or, if that entity is no longer able to serve or declines to serve in such
capacity, such other independent compensation consultant that has no existing client relationship with the
Company and its Affiliates as shall be selected by the designated consultant and reasonably acceptable to the
Board (either such consultant hereinafter referred to as the "Compensation Consultant")), using methods of
valuation and comparison commonly used in competitive compensation practices, which shall be consistently
applied. The Company shall provide the Compensation Consultant with any and all data that the consultant shall
reasonably request in order to make its evaluations hereunder.

            6. Termination. (a) Death, Disability or Retirement. This Agreement shall terminate automatically upon
the Executive's death, termination due to "Disability" (as defined below), or voluntary retirement (other than
for Good Reason, as defined below) under any of the retirement plans of the Company or its Affiliates
applicable to the

                                                       4


Executive as in effect from time to time. For purposes of this Agreement, "Disability" shall
mean the Executive's inability to perform his or her material duties for six consecutive months due to a
physical or mental incapacity.

            (b) Voluntary Termination. Notwithstanding anything in this Agreement to the contrary, the Executive
may voluntarily terminate employment for any reason (including early retirement pursuant to any retirement plan
of the Company or any of its Affiliates as in effect from time to time and applicable to the Executive), upon
not less than 60 days' written notice (or such lesser period of notice as the Company shall specify) to the
Company or the entity employing the Executive, as applicable; provided that any termination by the Executive
pursuant to Section 6(d) hereof on account of Good Reason (as defined below) shall not be treated as a
voluntary termination under this Section 6(b).

            (c) Cause. The Company and each of its Affiliates that employs the Executive may terminate the
Executive's employment for Cause. For purposes of this Agreement, "Cause" means (i) the Executive's conviction
or plea of nolo contendere to a felony (other than with respect to a traffic violation or an incident of
vicarious liability); (ii) an act of willful misconduct (including, without limitation, a willful material
violation of the Company's Code of Conduct) on Executive's part with regard to the Company or its Affiliates
having a material adverse impact on the Company or its Affiliates, and (iii) the Executive's failure in good
faith to attempt or refusal to perform legal directives of the Board or executive officers of the Company, as
applicable, which directives are consistent with the scope and nature of the Executive's employment duties and
responsibilities and which failure or refusal is not remedied by the Executive within thirty (30) days after
notice of such non-performance is given to the Executive. The Executive shall be provided an opportunity,
together with his or her counsel, to be heard before the Board prior to termination and after such notice. If
the majority of the members of the Board do not confirm, through a duly-adopted resolution following such
opportunity, that the Company had grounds for a "Cause" termination, the Executive shall have the option to
treat his or her employment as not having terminated or as having been terminated pursuant to a termination
without Cause. No event shall constitute grounds for a "Cause" termination in the event that the Company fails
to take action within 90 days after the Company's Chairman or the Chairman of the Company's Audit Committee
obtains knowledge of the occurrence of such event. Additionally, for purposes of clause (ii) of this
definition, no act, or failure to act, on the Executive's part shall be deemed "willful" unless done, or
omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive's act,
or failure to act, was in the best interest of the Company and its subsidiaries.

            (d) Good Reason. After the Effective Date, the Executive may resign from employment at any time for
Good Reason. For purposes of this Agreement, "Good Reason" means the occurrence after the Effective Date of any
of the following, without the express written consent of the Executive:

                  (i) the assignment to the Executive of duties inconsistent with the Executive's position or
         any reduction in the Executive's title or any material

                                                       5


         reduction in the Executive's position, duties or responsibilities from the title, position, duties
         or responsibilities held or exercised by the Executive prior to the Effective Date;

                  (ii) any requirement that the Executive change the location where the Executive regularly
         provides services to the Company outside of the Hartford, Connecticut metropolitan area (i.e., the
         area within a thirty five (35) mile radius of downtown Hartford);

                  (iii) a reduction by the Company of the Executive's Base Salary or Total Compensation
         opportunity or a reduction in the employee benefits provided to the Executive under the Company's
         employee benefit plans (unless the Executive is provided with substantially equivalent replacement
         benefits); or

                  (iv) any failure to obtain the assumption and agreement to perform this Agreement by a
         successor as contemplated by Section 12(b).

            (e) Notice of Termination. Any termination by the Company and/or its Affiliates for Cause or by the
Executive for Good Reason shall be communicated by Notice of Termination to the other party hereto given in
accordance with Section 13(e). For purposes of this Agreement, a "Notice of Termination" means a written notice
given, (i) in the case of a termination for Cause, within 10 business days of the Company and any Affiliate
that employs the Executive having actual knowledge of the events giving rise to such termination, or (ii) in
the case of a termination for Good Reason, within 10 business days of the Executive's having actual knowledge
of the events giving rise to such termination. Any such Notice of Termination shall (x) indicate the specific
termination provision in this Agreement relied upon, (y) set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's employment under the provision so
indicated, and (z) if the termination date is other than the date of receipt of such notice, specify the
termination date of this Agreement (which date shall be not more than 15 days after the giving of such notice).

            (f) Date of Termination. For the purpose of this Agreement, the term "Date of Termination" means (i)
in the case of a termination for which a Notice of Termination is required, the date of receipt of such Notice
of Termination or, if later, the date specified therein, as the case may be, and (ii) in all other cases, the
actual date on which the Executive's employment terminates during the Employment Period.

            7. Obligations of the Company or an Affiliate upon Termination. (a) Death or Disability. If the
Executive's employment is terminated during the Employment Period by reason of the Executive's death or
Disability, this Agreement shall terminate without further obligations to the Executive or the Executive's
legal representatives under this Agreement other than those obligations accrued hereunder at the Date of
Termination, and the Company or the Affiliate that employs the Executive shall pay to the Executive (or the
Executive's beneficiary or estate), at the times determined below (i) the Executive's full Base Salary through
the Date of Termination (the "Earned Salary"), (ii) any vested amounts or benefits owing to the Executive under
or in

                                                       6


accordance with the terms and conditions of any otherwise applicable employee benefit plans, agreements
and programs and any accrued vacation pay not yet paid (the "Accrued Obligations"), and (iii) any other
benefits payable in such situation under the plans, agreements, policies or programs of the Company and its
Affiliates (the "Additional Benefits").

         Any Earned Salary shall be paid in cash in a single lump sum as soon as practicable, but in no event
more than 30 days (or at such earlier date required by law), following the Date of Termination. Accrued
Obligations and Additional Benefits shall be paid in accordance with the terms of the applicable plan, program
or arrangement.

            (b) Cause and Voluntary Termination. If, during the Employment Period, the Executive's employment
shall be terminated for Cause or voluntarily terminated by the Executive (other than on account of Good
Reason), the Company or the Affiliate that employs the Executive shall pay the Executive (i) the Earned Salary
in cash in a single lump sum as soon as practicable, but in no event more than 30 days (or at such earlier date
required by law), following the Date of Termination, and (ii) the Accrued Obligations and Additional Benefits
in accordance with the terms of the applicable plan, program or arrangement.

            (c) Termination by the Company or the Affiliate that employs the Executive other than for Cause and
Termination by the Executive for Good Reason. If, during the Employment Period, the Company or the Affiliate
that employs the Executive terminates the Executive's employment other than for Cause or the Executive
terminates his or her employment for Good Reason:

                 (i)      Pension Service Credit and Payment. The Executive's accrued benefit under any
            qualified or nonqualified defined benefit type pension plan or arrangement of the Company,
            including, without limitation, the Employee Pension Plan or any successor plan and/or the
            Supplemental Executive Retirement Plan or any successor plan (all such plans, the "Pension Plans")
            shall, to the extent not previously vested, be deemed vested as of the Date of Termination. In
            addition, the Company shall pay to the Executive an amount equal to the lump sum value (based on
            the actuarial assumptions used under the respective plan) of two years of additional service and
            age credit for pension purposes under the Pension Plans (with the Base Salary used for two years of
            the salary component of "final average earnings" for purposes of this calculation), which payments
            shall be made within thirty (30) days after termination of employment.

                 (ii)     Additional Lump Sum Payments. In lieu of (and not in addition to) any severance
            benefits payable to the Executive under any other plan, policy or program of the Company or any
            Affiliate (each, a "Severance Policy") or under any written agreement between the Executive and the
            Company (each, a "Prior Agreement"), the Company shall pay to the Executive (or cause the Executive
            to be paid), at the times determined below, the following amounts:

                 (A)      the Executive's Earned Salary;

                                                       7


                 (B)      a cash amount (the "Severance Amount") equal to two times the sum of (x) the
                          Executive's annual rate of Base Salary as then in effect and (y) the greater of (1) an
                          amount equal to the average of the Executive's annual incentive compensation earned
                          under the Company's Mutual Incentive Plan (or any successor plan) or similar annual
                          incentive plan applicable to the Executive (collectively, the "MIP") in respect of the
                          Executive's services performed in the last three full fiscal years completed prior to
                          the Change of Control, and (2) the MIP target applicable to the Executive for the year
                          in which the Executive's employment terminates; and

                 (C)      the Accrued Obligations and Additional Benefits.

         The Earned Salary and Severance Amount shall be paid in cash in a single lump sum as soon as
         practicable, but in no event more than 30 days (or at such earlier date required by law), following
         the Date of Termination. Accrued Obligations shall be paid in accordance with the terms of the
         applicable plan, program or arrangement. Notwithstanding the foregoing, the Executive may elect in
         writing to receive the benefits payable under any Severance Policy that would otherwise be available
         to him or her, or the termination benefits under any Prior Agreement to which he or she is a party, in
         each case in lieu of receiving the benefits payable hereunder.

                  (iii) Continuation of Benefits. The Executive (and, to the extent applicable, the Executive's
         dependents) shall be entitled, after the Date of Termination until two years from the Date of
         Termination (the "End Date"), to continue participation in all of the employee and executive plans
         providing medical, dental and long-term disability benefits that the Executive participated in prior
         to the Date of Termination (collectively, the "Continuing Benefit Plans"); provided that the
         participation by the Executive (and, to the extent applicable, the Executive's dependents) in any
         Continuing Benefit Plan shall cease on the date, if any, prior to the End Date on which the Executive
         becomes eligible for comparable benefits under a similar plan, policy or program of a subsequent
         employer ("Prior Date"). The Executive's participation in the Continuing Benefit Plans will be on the
         same terms and conditions that would have applied had the Executive continued to be employed by the
         Company or the Affiliate that employs the Executive through the End Date or the Prior Date. To the
         extent any such benefits cannot be provided under the terms of the applicable plan, policy or program,
         the Company shall provide (or shall cause to be provided) a comparable benefit under another plan or
         from its general assets; provided that the Company shall pay the Executive additional cash payments to
         the extent necessary for the Executive to receive the same net after-tax benefits that the Executive
         would have received under such plans if the Executive had continued to receive such plan benefits
         while employed with the Company.

                                                       8


                  (iv) Deemed Vesting for Certain Benefits. The Executive shall be deemed to have met all
         service and other requirements for full vesting of benefits under all stock option or other stock or
         equity compensation plans of the Company in which the Executive participates and the stock options
         held by the Executive shall remain exercisable for the lesser of two years or the duration of their
         normal terms.

                  (v) Pro-Rata Payment of MIP and Long-Term Incentive Plan. The Company shall pay to the
         Executive a cash amount equal to a pro rata portion of (i) the higher of the Executive's target or
         actually earned annual incentive award under the MIP for the fiscal year in which the Executive's Date
         of Termination occurs and (ii) any awards made to the Executive under the Company's long-term
         incentive plan (or any successor plan) determined as if the targets applicable to such awards were
         achieved. The pro-rata portion of each award shall be determined by multiplying the value of the award
         (i.e., in the case of the MIP, the amount actually earned, and in the case of the long term incentive
         awards, the target amounts) times a fraction, the numerator of which is the number of days during the
         performance period applicable to each such award prior to the Date of Termination and the denominator
         of which is the number of days in the performance period applicable to each such award.
         Notwithstanding the foregoing, any amount payable under this subparagraph in respect of the annual
         incentive award or in respect of any long-term incentive plan shall be inclusive of the amounts, if
         any, otherwise payable to the Executive under the MIP and long-term incentive plans for the year in
         which the Date of Termination occurs.

                  (vi) Savings and Investment Plans. If and to the extent the Executive is a participant in the
         Savings and Investment Plans or any successor plan thereto ("SIP") and/or the Excess Investment Plan
         or any successor plan thereto ("EIP"), the Company shall pay the Executive a lump sum amount equal to
         the amount that the Company would have contributed to the SIP or credited to the EIP, over the two
         years following the Executive's Date of Termination assuming that the Executive were contributing to
         each such plan during such period at the rate in effect immediately prior to the Date of Termination
         (or, if greater, at the rate in effect immediately prior to the Change of Control).

                  (vii) Outplacement. The Company shall provide the Executive with outplacement services at a
         level commensurate with the Executive's position.

         (d) Discharge of the Company's and its Affiliates' Obligations. Except as expressly provided in the
last sentence of this Section 7(d), the amounts payable to the Executive pursuant to this Section 7 following
termination of the Executive's employment shall be in full and complete satisfaction of the Executive's rights
under this Agreement and any other claims the Executive may have in respect of the Executive's employment by
the Company and its Affiliates. Such amounts shall constitute liquidated damages with respect to any and all
such rights and claims and, upon the Executive's receipt of such amounts, the Company and its Affiliates shall
be released and discharged from any and all liability to the Executive in connection with this Agreement or
otherwise

                                                       9


in connection with the Executive's employment by the Company and its Affiliates. Notwithstanding the
foregoing, (i) the Executive shall retain all rights with respect to the Company's continuing obligations to
indemnify the Executive as a former officer or director of the Company or its Affiliates, and to provide
directors and officers liability insurance, to the fullest extent permitted under the Company's certificate of
incorporation and by-laws or any other arrangement and (ii) to the extent the Executive is entitled to greater
rights with respect to any category of severance payments or benefits in any similar situation under any other
arrangement with the Company, the Executive shall be entitled to such greater rights.

         8. Non-exclusivity of Rights. Except as expressly provided herein, nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other
plan or program provided by the Company or any of its Affiliates and for which the Executive may qualify, nor
shall anything herein limit or otherwise prejudice such rights as the Executive may have under any other
agreements with the Company or any of its Affiliates, including employment agreements, stock option agreements,
and other stock or equity compensation agreements. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company or any Affiliate at or subsequent to the
Date of Termination shall be payable in accordance with such plan or program.

         9. No Offset. The obligation of the Company or any of its Affiliates to make the payments provided for
in this Agreement and otherwise to perform the obligations hereunder shall not be diminished or otherwise
affected by any circumstances, including, but not limited to, any set-off, counterclaim, recoupment, defense or
other right which the Company or any of its Affiliates may have against the Executive or others, whether by
reason of the subsequent employment of the Executive or otherwise.

         10. Legal Fees and Expenses. If the Executive asserts any claim in any contest (whether initiated by
the Executive or by the Company or any of its Affiliates) as to the validity, enforceability or interpretation
of any provision of this Agreement or to enforce and/or collect any payment or benefit payable hereunder, the
Company shall pay the Executive's legal expenses (or cause such expenses to be paid) including, but not limited
to, the Executive's reasonable attorney's fees, on a monthly basis, upon presentation of proof of such expenses
in a form acceptable to the Company; provided that the Executive shall reimburse the Company for such amounts
(to the extent permitted under applicable law), plus simple interest thereon at the 90-day United States
Treasury Bill rate as in effect from time to time, compounded annually, if the arbitrator determines that the
Executive's claims were substantially frivolous or brought in bad faith.

         11. Surviving Agreements. This Agreement provides for certain payments and benefits to the Executive
to be determined by the employee benefit plans and programs, incentive plans, stock option, and other stock or
equity compensation plans of the Company and its Affiliates. To the extent so provided, such programs and plans
constitute part of the agreement and understanding between the Executive and the Company and are incorporated
herein and made a part hereof. The Executive and the Company hereby reaffirm their respective commitments under
such programs and plans,

                                                      10


and again agree to be bound by each of the covenants contained therein for the benefit of the Company in consideration
of the benefits made available to the Executive hereby.

         12. Successors. (a) This Agreement is personal to the Executive and, without the prior written consent
of the Company, shall not be assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal
representatives and his or her estate.

         (b) This Agreement shall inure to the benefit of and be binding upon the Company and shall be
assignable, in writing, by the Company only to the acquiror of all or substantially all, of the assets of the
Company. The Company shall require any successor to all or substantially all of the business and/or assets of
the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or
otherwise, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as
the Company would be required to perform if no such succession had taken place.

         13. Miscellaneous. (a) Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut, applied without reference to principles of conflict of laws.

         (b) Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall
be resolved by binding arbitration. The arbitration shall be held in Hartford, Connecticut and except to the
extent inconsistent with this Agreement, shall be conducted in accordance with the Expedited Employment
Arbitration Rules of the American Arbitration Association then in effect at the time of the arbitration (or
such other rules as the parties may agree to in writing), and otherwise in accordance with principles which
would be applied by a court of law or equity. The arbitrator shall be acceptable to both the Company and the
Executive. If the parties cannot agree on an acceptable arbitrator, the dispute shall be heard by a panel of
three arbitrators, one appointed by each of the parties and the third appointed by the other two arbitrators.
The cost and expenses of the arbitration shall be paid by the Company.

         (c) Amendments. This Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal representatives.

         (d) Entire Agreement.  This Agreement constitutes the entire agreement between the parties hereto with
             respect to the matters referred to herein, and completely supersedes and replaces any prior
             agreement between the Executive and the Company concerning the subject matter herein.  No other
             agreement relating to the terms of the Executive's employment by the Company or any of its
             Affiliates, oral or otherwise, shall be binding between the parties unless it is in writing and
             signed by the party against whom enforcement is sought.  Except as expressly provided herein,
             nothing in this Agreement shall be construed or interpreted to enhance,

                                                      11


             increase, reduce or diminish any rights, duties or obligations of the Executive under any
             individual agreement between the Executive and the Company or any of its affiliates, or under any
             employee benefit plan program or procedure established by the Company or any of its affiliates.
             There are no promises, representations, inducements or statements between the parties other than
             those that are expressly contained herein. The Executive acknowledges that the Executive is
             entering into this Agreement of the Executive's own free will and accord, and with no duress, that
             the Executive has read this Agreement and that the Executive understands it and its legal
             consequences.

         (e) Notices. All notices and other communications hereunder shall be in writing and shall be
             given by hand-delivery to the other party or by registered or certified mail, return receipt
             requested, postage prepaid, addressed as follows:

If to the Executive:                        at the home address of the Executive noted on the records of the
                                            Company

If to the Company:                          The Phoenix Companies, Inc.
                                            One American Row
                                            PO Box 5056
                                            Hartford, CT 06120-5056
                                            Attn.:  Tracy L. Rich, General Counsel

or to such other address as either party shall have furnished to the other in writing in accordance herewith.
Notice and communications shall be effective when actually received by the addressee.

         (f) Tax Withholding. The Company shall withhold (or cause such withholding) from any amounts payable
under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any
applicable law or regulation.

         (g) Severability; Reformation. In the event that one or more of the provisions of this Agreement shall
become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

         (h) Waiver. Waiver by any party hereto of any breach or default by the other party of any of the terms
of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different
from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any
course of dealing between the parties hereto or from any failure by either party hereto to assert its or the
Executive's rights hereunder on any occasion or series of occasions.

         (i) Confidentiality. The Executive, after termination of the Executive's employment, shall retain in
confidence any confidential or proprietary information known to the Executive concerning the Company and its
Affiliates and their business so

                                                      12


long as such information is not publicly disclosed and shall not use such information in any way injurious to
the Company or its Affiliates except for any disclosure to which an authorized officer of the Company or such
Affiliate has consented or any disclosure or use required by any order of any governmental body or court
(including legal process). If requested, the Executive shall return to the Company and its Affiliates any
memoranda, documents or other materials possessed by the Executive and containing confidential or proprietary
information of the Company and its Affiliates. Notwithstanding the preceding sentence, the Executive shall not
be required to return to the Company or its Affiliates, any memoranda, documents or other materials containing
confidential or proprietary information of the Company or its Affiliates, if such materials were provided to
the Executive in his or her capacity as a director of the Company or its Affiliates.

         (j) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.

         (k) Captions. The captions of this Agreement are not part of the provisions hereof and shall have no
force or effect.

                                                      13



                  IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and the Company has
caused this Agreement to be executed in its name on its behalf, and its corporate seal to be hereunto affixed
and attested by its Secretary, all as of the day and year first above written.

                                    PHOENIX COMPANIES, INC.

                                   _________________________________________________

                                    By: /s/ Bonnie J. Malley_________________________
                                    Title: SVP Corp Admin

WITNESSED:

/s/ Debora Brown_____

                                    PHOENIX INVESTMENT PARTNERS

                                   _________________________________________________

                                    By: /s/ Bonnie J. Malley_________________________
                                   Title: SVP Corp Admin

WITNESSED:

/s/ Debora Brown_____

                                    EXECUTIVE:                   DATE:


                                    /s/ John F. Sharry_________  4/8/03_________

WITNESSED:

/s/ Carrie Morris_____

                                                      14

EX-99.10.36

                                                                                                  Exhibit 10.36
                                          CHANGE IN CONTROL AGREEMENT


         This Change in Control Agreement (this "Agreement") is as of January 1, 2003, and is between The
Phoenix Companies, Inc., a Delaware corporation (the "Company"), and James Wehr (the "Executive").

         The Company or one of its Affiliates (as defined below) has employed the Executive in an officer
position and has determined that the Executive holds a critical position with the Company and/or such
Affiliate.

         The Company believes that, in the event it is confronted with a situation that could result in a
change in ownership or control of the Company, continuity of management will be essential to its ability to
evaluate and respond to such situation in the best interests of its shareholders.

         The Company understands that any such situation will present significant concerns for the Executive
with respect to the Executive's financial and job security. The Company desires to assure the Company and its
Affiliates of the Executive's services during the period in which it is confronting such a situation, and to
provide the Executive certain financial assurances to enable the Executive to perform the responsibilities of
the Executive's position without undue distraction and to exercise the Executive's judgment without bias due to
the Executive's personal circumstances. To achieve these objectives, the Company and the Executive desire to
enter into an agreement providing the Company and its Affiliates and the Executive with certain rights and
obligations upon the occurrence of a Change of Control (as defined below).

         The Company and the Executive therefore agree as follows:

         1.       Operation of Agreement. (a) Term. The initial term of this Agreement shall commence on the
date of this Agreement and continue until the third anniversary of the date of this Agreement. Thereafter, the
term of this Agreement will automatically renew for up to two successive and consecutive additional one-year
periods following the end of its initial term and any extended term, unless the Company or the Executive gives
the other party written notice at least 12 months prior to the date the term would otherwise renew that it or
the Executive does not want the term to be so extended; provided that the Company may not deliver a notice of
nonrenewal after a Change of Control. At the option of the Company, which shall be exercised by the affirmative
action of its Board of Directors (the "Board") or a duly authorized committee thereof, the term of this
Agreement may also be extended after such two renewal periods for such period or periods as the Board or such
committee shall specify. Notwithstanding anything to the contrary in this Agreement, the term of this Agreement
shall in all events expire (regardless of when the term would otherwise have expired) on the second anniversary
of a Change of Control; provided that any payment obligations hereunder resulting from the Executive's
termination of employment prior to the expiration of the term shall continue in full force and effect
following the expiration of the term.




         (b)      Effective Date.  If a Change of Control occurs during the term of this Agreement, this Agreement
                  shall govern the terms and conditions of the Executive's employment and the benefits and
                  compensation to be provided to the Executive commencing on the date on which a Change of
                  Control occurs (the "Effective Date") and ending on the second anniversary of the Effective
                  Date; provided that if the Executive is not employed by the Company or one of its Affiliates
                  on the Effective Date, this Agreement shall be void and without effect, shall not constitute
                  a contract of employment or a guarantee of employment for any period of time, and shall not
                  limit in any way the right of the Company or its Affiliates to change the terms and
                  conditions of the Executive's employment or to terminate the Executive's employment.
                  Notwithstanding the preceding sentence, in the event that the Executive's employment with
                  the Company and its Affiliates is terminated in connection with a Change of Control (which
                  shall in all events be deemed the case if such termination is within 90 days prior to the
                  Effective Date and deemed not to be the case if such termination is more than 180 days before
                  the Effective Date) without Cause or for Good Reason (as such terms are defined in Sections
                  6(c) and 6(d) below, but without regard to the requirement under Section 6(d) that such
                  termination occur after the Effective Date), the Executive shall be entitled to receive the
                  benefits provided under Section 7(c), but only to the extent that such benefits are in excess
                  of those previously received by the Executive as a result of the Executive's prior
                  termination.

                  2.       Definitions.

                  (a)      Affiliate. An "Affiliate" shall mean any corporation, partnership, limited liability
         company, trust or other entity which directly, or indirectly through one or more intermediaries,
         controls, is under common control with, or is controlled by, the Company.

                  (b)      Change of Control. For the purposes of this Agreement, a "Change of Control" shall
         mean the first occurrence of:

                           (i)      any Person acquires "beneficial ownership" (within the meaning of Rule 13d-3
                  under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), directly or
                  indirectly, of securities of the Company representing 25% or more of the combined Voting Power
                  of the Company's securities;

                           (ii)     within any 24-month period, the persons who were directors of the Company
                  at the beginning of such period (the "Incumbent Directors") shall cease to constitute at
                  least a majority of the Board or the board of directors of any successor to the Company;
                  provided that any director elected or nominated for election to the Board by a

                                                       2


                  majority of the Incumbent Directors then still in office shall be deemed to be an Incumbent
                  Director for purposes of this subclause 2(b)(ii);

                           (iii)    the effective date of any merger, consolidation, share exchange, division,
                  sale or other disposition of all or substantially all of the assets of the Company which is
                  consummated (a "Corporate Event"), if immediately following the consummation of such
                  Corporate Event the stockholders of the Company immediately prior to such Corporate Event do
                  not hold, directly or indirectly, a majority of the Voting Power, in substantially the same
                  proportion as prior to such Corporate Event, of (x) in the case of a merger or consolidation,
                  the surviving or resulting corporation or (y) in the case of a division or a sale or other
                  disposition of assets, each surviving, resulting or acquiring corporation which, immediately
                  following the relevant Corporate Event, holds more than 25% of the consolidated assets of the
                  Company immediately prior to such Corporate Event;

                  (iv)     the approval by stockholders of the Company of a plan of liquidation with respect to
         the Company; or

                  (v)      any other event occurs which the Board declares to be a Change of Control.

         (c)      Person. For purposes of the definition of Change of Control, "Person" shall have the same
meaning ascribed to such term in Section 3(a)(9) of the Exchange Act, as supplemented by Section 13(d)(3) of
the Exchange Act, and shall include any group (within the meaning of Rule 13d-5(b) under the Exchange Act);
provided that "Person" shall not include (i) the Company or any of its Affiliates, or (ii) any employee benefit
plan (including an employee stock ownership plan) sponsored by the Company or any of its Affiliates.

         (d)      Voting Power. "Voting Power" shall mean such number of Voting Securities as shall enable the
holders thereof to cast all the votes which could be cast in an annual election of directors of a company, and
"Voting Securities" shall mean all securities entitling the holders thereof to vote in an annual election of
directors of a company.

         3.       Employment Period. The period during which the Executive remains employed with the Company or
any Affiliate following the Effective Date through the expiration of the term of this Agreement shall be
referred to herein as the "Employment Period."

         4.       Business Time. During the Employment Period, the Executive shall devote substantially
Executive's full business time and efforts to the performance of Executive's duties on behalf of the Company,
except for (i) time spent in managing the Executive's personal, financial and legal affairs and serving on
civic or charitable boards or committees, in each case only if and to the extent not substantially interfering
with the

                                                       3


performance of such responsibilities, and (ii) periods of vacation and sick leave to which the Executive is
entitled. It is expressly understood and agreed that the Executive's continuing to serve on any boards and
committees on which the Executive is serving or with which the Executive is otherwise associated immediately
preceding the Effective Date shall not be deemed to interfere with the performance of the Executive's services
to the Company and its Affiliates. Moreover, so long as the following activities do not (individually or in the
aggregate) materially interfere with the performance of the Executive's duties with the Company and are
conducted in compliance with the Company's Code of Conduct (as in effect from time to time), the Executive may
(i) participate in charitable, civic, educational, professional, community or industry affairs or serve on the
boards of directors or advisory boards of other not for profit companies, and (ii) manage his/her and his/her
family's personal investments. Executive may serve on the boards of directors or similar governing bodies of
any for profit entity with the prior written consent of the Company's Chief Executive Officer as long as such
service is not in violation of the Company's Code of Conduct.

         5.       Compensation. (a) Base Salary.  During the Employment Period, the Executive shall receive a
base salary at a monthly rate at least equal to the monthly salary paid to the Executive immediately prior to
the Effective Date. The base salary may be increased (but not decreased) at any time and from time to time by
action of the Board or any committee thereof, the board of directors of any Affiliate or any committee thereof
in the event the Executive is employed by an Affiliate, and any individual having authority to take such action
in accordance with the Company's or any Affiliate's regular practices. The Executive's base salary, as it may
be increased from time to time, shall hereafter be referred to as the "Base Salary".

         (b)      Total Compensation. During the Employment Period, the total compensation opportunities made
available to the Executive in such year in the form of short-term incentive compensation and long-term
incentive compensation ("Total Compensation") shall not be less than the Total Compensation made available to
the Executive immediately prior to the Effective Date. For purposes of this Section 5(b), the amount of Total
Compensation made available to the Executive, whether prior to or after a Change of Control, shall be
conclusively determined by an independent compensation consultant selected by the Company prior to the
occurrence of a Change of Control (or, if that entity is no longer able to serve or declines to serve in such
capacity, such other independent compensation consultant that has no existing client relationship with the
Company and its Affiliates as shall be selected by the designated consultant and reasonably acceptable to the
Board (either such consultant hereinafter referred to as the "Compensation Consultant")), using methods of
valuation and comparison commonly used in competitive compensation practices, which shall be consistently
applied. The Company shall provide the Compensation Consultant with any and all data that the consultant shall
reasonably request in order to make its evaluations hereunder.

         6.       Termination. (a) Death, Disability or Retirement.  This Agreement shall terminate
automatically upon the Executive's death, termination due to "Disability" (as defined below), or voluntary
retirement (other than for Good Reason, as defined below) under any of the retirement plans of the Company or
its Affiliates applicable to the

                                                       4


Executive as in effect from time to time. For purposes of this Agreement, "Disability" shall mean the
Executive's inability to perform his or her material duties for six consecutive months due to a physical or
mental incapacity.

         (b)      Voluntary Termination. Notwithstanding anything in this Agreement to the contrary, the
Executive may voluntarily terminate employment for any reason (including early retirement pursuant to any
retirement plan of the Company or any of its Affiliates as in effect from time to time and applicable to the
Executive), upon not less than 60 days' written notice (or such lesser period of notice as the Company shall
specify) to the Company or the entity employing the Executive, as applicable; provided that any termination by
the Executive pursuant to Section 6(d) hereof on account of Good Reason (as defined below) shall not be treated
as a voluntary termination under this Section 6(b).

         (c)      Cause. The Company and each of its Affiliates that employs the Executive may terminate the
Executive's employment for Cause. For purposes of this Agreement, "Cause" means (i) the Executive's conviction
or plea of nolo contendere to a felony (other than with respect to a traffic violation or an incident of
vicarious liability); (ii) an act of willful misconduct (including, without limitation, a willful material
violation of the Company's Code of Conduct) on Executive's part with regard to the Company or its Affiliates
having a material adverse impact on the Company or its Affiliates, and (iii) the Executive's failure in good
faith to attempt or refusal to perform legal directives of the Board or executive officers of the Company, as
applicable, which directives are consistent with the scope and nature of the Executive's employment duties and
responsibilities and which failure or refusal is not remedied by the Executive within thirty (30) days after
notice of such non-performance is given to the Executive. The Executive shall be provided an opportunity,
together with his or her counsel, to be heard before the Board prior to termination and after such notice. If
the majority of the members of the Board do not confirm, through a duly-adopted resolution following such
opportunity, that the Company had grounds for a "Cause" termination, the Executive shall have the option to
treat his or her employment as not having terminated or as having been terminated pursuant to a termination
without Cause. No event shall constitute grounds for a "Cause" termination in the event that the Company fails
to take action within 90 days after the Company's Chairman or the Chairman of the Company's Audit Committee
obtains knowledge of the occurrence of such event. Additionally, for purposes of clause (ii) of this
definition, no act, or failure to act, on the Executive's part shall be deemed "willful" unless done, or
omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive's act,
or failure to act, was in the best interest of the Company and its subsidiaries.

         (d)      Good Reason. After the Effective Date, the Executive may resign from employment at any time
for Good Reason.  For purposes of this Agreement, "Good Reason" means the occurrence after the Effective Date
of any of the following, without the express written consent of the Executive:

                  (i)      the assignment to the Executive of duties inconsistent with the Executive's position
         or any reduction in the Executive's title or any material

                                                       5


         reduction in the Executive's position, duties or responsibilities from the title, position, duties or
         responsibilities held or exercised by the Executive prior to the Effective Date;

                  (ii)     any requirement that the Executive change the location where the Executive regularly
         provides services to the Company outside of the Hartford, Connecticut metropolitan area (i.e., the
         area within a thirty five (35) mile radius of downtown Hartford);

                  (iii)    a reduction by the Company of the Executive's Base Salary or Total Compensation
         opportunity or a reduction in the employee benefits provided to the Executive under the Company's
         employee benefit plans (unless the Executive is provided with substantially equivalent replacement
         benefits); or

                  (iv)     any failure to obtain the assumption and agreement to perform this Agreement by a
         successor as contemplated by Section 12(b).

          (e)     Notice of Termination.  Any termination by the Company and/or its Affiliates for Cause or by
the Executive for Good Reason shall be communicated by Notice of Termination to the other party hereto given in
accordance with Section 13(e).  For purposes of this Agreement, a "Notice of Termination" means a written
notice given, (i) in the case of a termination for Cause, within 10 business days of the Company and any
Affiliate that employs the Executive having actual knowledge of the events giving rise to such termination, or
(ii) in the case of a termination for Good Reason, within 10 business days of the Executive's having actual
knowledge of the events giving rise to such termination. Any such Notice of Termination shall (x) indicate the
specific termination provision in this Agreement relied upon, (y) set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's employment under the provision so
indicated, and (z) if the termination date is other than the date of receipt of such notice, specify the
termination date of this Agreement (which date shall be not more than 15 days after the giving of such notice).

         (f)      Date of Termination. For the purpose of this Agreement, the term "Date of Termination" means
(i) in the case of a termination for which a Notice of Termination is required, the date of receipt of such
Notice of Termination or, if later, the date specified therein, as the case may be, and (ii) in all other
cases, the actual date on which the Executive's employment terminates during the Employment Period.

         7.       Obligations of the Company or an Affiliate upon Termination. (a)  Death or Disability. If the
Executive's employment is terminated during the Employment Period by reason of the Executive's death or
Disability, this Agreement shall terminate without further obligations to the Executive or the Executive's
legal representatives under this Agreement other than those obligations accrued hereunder at the Date of
Termination, and the Company or the Affiliate that employs the Executive shall pay to the Executive (or the
Executive's beneficiary or estate), at the times determined below (i) the Executive's full Base Salary through
the Date of Termination (the "Earned Salary"), (ii) any vested amounts or benefits owing to the Executive under
or in

                                                       6


accordance with the terms and conditions of any otherwise applicable employee benefit plans, agreements and
programs and any accrued vacation pay not yet paid (the "Accrued Obligations"), and (iii) any other benefits
payable in such situation under the plans, agreements, policies or programs of the Company and its Affiliates
(the "Additional Benefits").

         Any Earned Salary shall be paid in cash in a single lump sum as soon as practicable, but in no event
more than 30 days (or at such earlier date required by law), following the Date of Termination. Accrued
Obligations and Additional Benefits shall be paid in accordance with the terms of the applicable plan, program or
arrangement.

          (b)     Cause and Voluntary Termination. If, during the Employment Period, the Executive's employment
shall be terminated for Cause or voluntarily terminated by the Executive (other than on account of Good
Reason), the Company or the Affiliate that employs the Executive shall pay the Executive (i) the Earned Salary
in cash in a single lump sum as soon as practicable, but in no event more than 30 days (or at such earlier date
required by law), following the Date of Termination, and (ii) the Accrued Obligations and Additional Benefits
in accordance with the terms of the applicable plan, program or arrangement.

         (c)      Termination by the Company or the Affiliate that employs the Executive other than for Cause
and Termination by the Executive for Good Reason. If, during the Employment Period, the Company or the
Affiliate that employs the Executive terminates the Executive's employment other than for Cause or the
Executive terminates his or her employment for Good Reason:

                  (i)      Pension Service Credit and Payment. The Executive's accrued benefit under any
         qualified or nonqualified defined benefit type pension plan or arrangement of the Company, including,
         without limitation, the Employee Pension Plan or any successor plan and/or the Supplemental Executive
         Retirement Plan or any successor plan (all such plans, the "Pension Plans") shall, to the extent not
         previously vested, be deemed vested as of the Date of Termination. In addition, the Company shall pay
         to the Executive an amount equal to the lump sum value (based on the actuarial assumptions used under
         the respective plan) of one year of additional service and age credit for pension purposes under the
         Pension Plans (with the Base Salary used for one year of the salary component of "final average
         earnings" for purposes of this calculation), which payments shall be made within thirty (30) days
         after termination of employment.

                  (ii)     Additional Lump Sum Payments. In lieu of (and not in addition to) any severance
         benefits payable to the Executive under any other plan, policy or program of the Company or any
         Affiliate (each, a "Severance Policy") or under any written agreement between the Executive and the
         Company (each, a "Prior Agreement"), the Company shall pay to the Executive (or cause the Executive to
         be paid), at the times determined below, the following amounts:

                  (A)      the Executive's Earned Salary;

                                                       7


                  (B)      a cash amount (the "Severance Amount") equal to two times the sum of (x) the
                           Executive's annual rate of Base Salary as then in effect and (y) the greater of (1)
                           an amount equal to the average of the Executive's annual incentive compensation
                           earned under the Company's Mutual Incentive Plan (or any successor plan) or similar
                           annual incentive plan applicable to the Executive (collectively, the "MIP") in
                           respect of the Executive's services performed in the last three full fiscal years
                           completed prior to the Change of Control, and (2) the MIP target applicable to the
                           Executive for the year in which the Executive's employment terminates; and

                  (C)      the Accrued Obligations and Additional Benefits.

         The Earned Salary and Severance Amount shall be paid in cash in a single lump sum as soon as
         practicable, but in no event more than 30 days (or at such earlier date required by law), following
         the Date of Termination. Accrued Obligations shall be paid in accordance with the terms of the
         applicable plan, program or arrangement. Notwithstanding the foregoing, the Executive may elect in
         writing to receive the benefits payable under any Severance Policy that would otherwise be available
         to him or her, or the termination benefits under any Prior Agreement to which he or she is a party, in
         each case in lieu of receiving the benefits payable hereunder.

                  (iii)    Continuation of Benefits. The Executive (and, to the extent applicable, the
         Executive's dependents) shall be entitled, after the Date of Termination until one year from the Date
         of Termination (the "End Date"), to continue participation in all of the employee and executive plans
         providing medical, dental and long-term disability benefits that the Executive participated in prior
         to the Date of Termination (collectively, the "Continuing Benefit Plans"); provided that the
         participation by the Executive (and, to the extent applicable, the Executive's dependents) in any
         Continuing Benefit Plan shall cease on the date, if any, prior to the End Date on which the Executive
         becomes eligible for comparable benefits under a similar plan, policy or program of a subsequent
         employer ("Prior Date"). The Executive's participation in the Continuing Benefit Plans will be on the
         same terms and conditions that would have applied had the Executive continued to be employed by the
         Company or the Affiliate that employs the Executive through the End Date or the Prior Date. To the
         extent any such benefits cannot be provided under the terms of the applicable plan, policy or program,
         the Company shall provide (or shall cause to be provided) a comparable benefit under another plan or
         from its general assets; provided that the Company shall pay the Executive additional cash payments to
         the extent necessary for the Executive to receive the same net after-tax benefits that the Executive
         would have received under such plans if the Executive had continued to receive such plan benefits
         while employed with the Company.

                                                       8


                  (iv)     Deemed Vesting for Certain Benefits. The Executive shall be deemed to have met all
         service and other requirements for full vesting of benefits under all stock option or other stock or
         equity compensation plans of the Company in which the Executive participates and the stock options
         held by the Executive shall remain exercisable for the lesser of two years or the duration of their
         normal terms.

                  (v)      Pro-Rata Payment of MIP and Long-Term Incentive Plan. The Company shall pay to the
         Executive a cash amount equal to a pro rata portion of (i) the higher of the Executive's target or
         actually earned annual incentive award under the MIP for the fiscal year in which the Executive's Date
         of Termination occurs and (ii) any awards made to the Executive under the Company's long-term
         incentive plan (or any successor plan) determined as if the targets applicable to such awards were
         achieved. The pro-rata portion of each award shall be determined by multiplying the value of the award
         (i.e., in the case of the MIP, the amount actually earned, and in the case of the long term incentive
         awards, the target amounts) times a fraction, the numerator of which is the number of days during the
         performance period applicable to each such award prior to the Date of Termination and the denominator
         of which is the number of days in the performance period applicable to each such award.
         Notwithstanding the foregoing, any amount payable under this subparagraph in respect of the annual
         incentive award or in respect of any long-term incentive plan shall be inclusive of the amounts, if
         any, otherwise payable to the Executive under the MIP and long-term incentive plans for the year in
         which the Date of Termination occurs.

                  (vi)     Savings and Investment Plans. If and to the extent the Executive is a participant in
         the Savings and Investment Plans or any successor plan thereto ("SIP") and/or the Excess Investment
         Plan or any successor plan thereto ("EIP"), the Company shall pay the Executive a lump sum amount
         equal to the amount that the Company would have contributed to the SIP or credited to the EIP, over
         the one year following the Executive's Date of Termination assuming that the Executive were
         contributing to each such plan during such period at the rate in effect immediately prior to the Date
         of Termination (or, if greater, at the rate in effect immediately prior to the Change of Control).

                  (vii)    Outplacement. The Company shall provide the Executive with outplacement services at
         a level commensurate with the Executive's position.

         (d)      Discharge of the Company's and its Affiliates' Obligations. Except as expressly provided in
the last sentence of this Section 7(d), the amounts payable to the Executive pursuant to this Section 7
following termination of the Executive's employment shall be in full and complete satisfaction of the
Executive's rights under this Agreement and any other claims the Executive may have in respect of the
Executive's employment by the Company and its Affiliates. Such amounts shall constitute liquidated damages with
respect to any and all such rights and claims and, upon the Executive's receipt of such amounts, the Company
and its Affiliates shall be released and discharged from any and all liability to the Executive in connection
with this Agreement or otherwise

                                                       9


in connection with the Executive's employment by the Company and its Affiliates. Notwithstanding the foregoing,
(i) the Executive shall retain all rights with respect to the Company's continuing obligations to indemnify the
Executive as a former officer or director of the Company or its Affiliates, and to provide directors and
officers liability insurance, to the fullest extent permitted under the Company's certificate of incorporation
and by-laws or any other arrangement and (ii) to the extent the Executive is entitled to greater rights with
respect to any category of severance payments or benefits in any similar situation under any other arrangement
with the Company, the Executive shall be entitled to such greater rights.

         8.       Non-exclusivity of Rights. Except as expressly provided herein, nothing in this Agreement
shall prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or
other plan or program provided by the Company or any of its Affiliates and for which the Executive may qualify,
nor shall anything herein limit or otherwise prejudice such rights as the Executive may have under any other
agreements with the Company or any of its Affiliates, including employment agreements, stock option agreements,
and other stock or equity compensation agreements.  Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company or any Affiliate at or subsequent to the
Date of Termination shall be payable in accordance with such plan or program.

         9.       No Offset. The obligation of the Company or any of its Affiliates to make the payments
provided for in this Agreement and otherwise to perform the obligations hereunder shall not be diminished or
otherwise affected by any circumstances, including, but not limited to, any set-off, counterclaim, recoupment,
defense or other right which the Company or any of its Affiliates may have against the Executive or others,
whether by reason of the subsequent employment of the Executive or otherwise.

         10.      Legal Fees and Expenses. If the Executive asserts any claim in any contest (whether initiated
by the Executive or by the Company or any of its Affiliates) as to the validity, enforceability or
interpretation of any provision of this Agreement or to enforce and/or collect any payment or benefit payable
hereunder, the Company shall pay the Executive's legal expenses (or cause such expenses to be paid) including,
but not limited to, the Executive's reasonable attorney's fees, on a monthly basis, upon presentation of proof
of such expenses in a form acceptable to the Company; provided that the Executive shall reimburse the Company
for such amounts (to the extent permitted under applicable law), plus simple interest thereon at the 90-day
United States Treasury Bill rate as in effect from time to time, compounded annually, if the arbitrator
determines that the Executive's claims were substantially frivolous or brought in bad faith.

         11.      Surviving Agreements. This Agreement provides for certain payments and benefits to the
Executive to be determined by the employee benefit plans and programs, incentive plans, stock option, and other
stock or equity compensation plans of the Company and its Affiliates. To the extent so provided, such programs
and plans constitute part of the agreement and understanding between the Executive and the Company and are
incorporated herein and made a part hereof. The Executive and the Company hereby reaffirm their respective
commitments under such programs and plans,

                                                      10


and again agree to be bound by each of the covenants contained therein for the benefit of the Company in
consideration of the benefits made available to the Executive hereby.

         12.      Successors. (a) This Agreement is personal to the Executive and, without the prior written
consent of the Company, shall not be assignable by the Executive otherwise than by will or the laws of descent
and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal
representatives and his or her estate.

         (b)      This Agreement shall inure to the benefit of and be binding upon the Company and shall be
assignable, in writing, by the Company only to the acquiror of all or substantially all, of the assets of the
Company. The Company shall require any successor to all or substantially all of the business and/or assets of
the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or
otherwise, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as
the Company would be required to perform if no such succession had taken place.

         13.      Miscellaneous. (a) Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut, applied without reference to principles of conflict of
laws.

         (b)      Arbitration. Any dispute or controversy arising under or in connection with this Agreement
shall be resolved by binding arbitration. The arbitration shall be held in Hartford, Connecticut and except to
the extent inconsistent with this Agreement, shall be conducted in accordance with the Expedited Employment
Arbitration Rules of the American Arbitration Association then in effect at the time of the arbitration (or
such other rules as the parties may agree to in writing), and otherwise in accordance with principles which
would be applied by a court of law or equity. The arbitrator shall be acceptable to both the Company and the
Executive. If the parties cannot agree on an acceptable arbitrator, the dispute shall be heard by a panel of
three arbitrators, one appointed by each of the parties and the third appointed by the other two arbitrators.
The cost and expenses of the arbitration shall be paid by the Company.

         (c)      Amendments. This Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors and legal representatives.

         (d)      Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto
                  with respect to the matters referred to herein, and completely supersedes and replaces any
                  prior agreement between the Executive and the Company concerning the subject matter herein.
                  No other agreement relating to the terms of the Executive's employment by the Company or any
                  of its Affiliates, oral or otherwise, shall be binding between the parties unless it is in
                  writing and signed by the party against whom enforcement is sought. Except as expressly
                  provided herein, nothing in this Agreement shall be construed or interpreted to enhance,

                                                      11


                  increase, reduce or diminish any rights, duties or obligations of the Executive under any
                  individual agreement between the Executive and the Company or any of its affiliates, or under
                  any employee benefit plan program or procedure established by the Company or any of its
                  affiliates. There are no promises, representations, inducements or statements between the
                  parties other than those that are expressly contained herein. The Executive acknowledges that
                  the Executive is entering into this Agreement of the Executive's own free will and accord,
                  and with no duress, that the Executive has read this Agreement and that the Executive
                  understands it and its legal consequences.

         (e)      Notices. All notices and other communications hereunder shall be in writing and shall be
                  given by hand-delivery to the other party or by registered or certified mail, return receipt
                  requested, postage prepaid, addressed as follows:

If to the Executive:                        at the home address of the Executive noted on the records of the
                                            Company

If to the Company:                          The Phoenix Companies, Inc.
                                            One American Row
                                            PO Box 5056
                                            Hartford, CT 06120-5056
                                            Attn.:  Tracy L. Rich, General Counsel

or to such other address as either party shall have furnished to the other in writing in accordance herewith.
Notice and communications shall be effective when actually received by the addressee.

         (f)      Tax Withholding. The Company shall withhold (or cause such withholding) from any amounts
payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to
any applicable law or regulation.

         (g)      Severability; Reformation. In the event that one or more of the provisions of this Agreement
shall become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

         (h)      Waiver. Waiver by any party hereto of any breach or default by the other party of any of the
terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from
any course of dealing between the parties hereto or from any failure by either party hereto to assert its or
the Executive's rights hereunder on any occasion or series of occasions.

         (i)      Confidentiality. The Executive, after termination of the Executive's employment, shall retain
in confidence any confidential or proprietary information known to the Executive concerning the Company and its
Affiliates and their business so

                                                      12


long as such information is not publicly disclosed and shall not use such information in any way injurious to
the Company or its Affiliates except for any disclosure to which an authorized officer of the Company or such
Affiliate has consented or any disclosure or use required by any order of any governmental body or court
(including legal process). If requested, the Executive shall return to the Company and its Affiliates any
memoranda, documents or other materials possessed by the Executive and containing confidential or proprietary
information of the Company and its Affiliates. Notwithstanding the preceding sentence, the Executive shall not
be required to return to the Company or its Affiliates, any memoranda, documents or other materials containing
confidential or proprietary information of the Company or its Affiliates, if such materials were provided to
the Executive in his or her capacity as a director of the Company or its Affiliates.

         (j)      Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.

         (k)      Captions. The captions of this Agreement are not part of the provisions hereof and shall have
no force or effect.

                                                      13



                  IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and the Company has
caused this Agreement to be executed in its name on its behalf, and its corporate seal to be hereunto affixed
and attested by its Secretary, all as of the day and year first above written.

                                    PHOENIX COMPANIES, INC.

                                    ____________________________________________________

                                    By:  /s/ Bonnie J. Malley___________________________
                                    Title:  SVP Corp Admin



WITNESSED:

[None]________________________



                                    PHOENIX INVESTMENT PARTNERS

                                    ____________________________________________________

                                    By:  /s/ Bonnie J. Malley___________________________
                                    Title:  SVP Corp Admin



WITNESSED:

[None]________________________



                                    EXECUTIVE:                                  DATE:


                                     /s/ James D. Wehr__________________       5/9/03______________________

WITNESSED:

[None]________________________


                                                      14

EX-99.10.38

                                                                                                      Exhibit 10.38

                                                                                                      EXECUTION COPY







                                            FISCAL AGENCY AGREEMENT


                                                    between

                                         PHOENIX LIFE INSURANCE COMPANY
                                                     Issuer

                                                      and

                                              THE BANK OF NEW YORK

                                                  Fiscal Agent

                                   

                                         Dated as of December 15, 2004
                                   

                                                  $175,000,000

                          7.15% Surplus Notes scheduled to mature on December 15, 2034












                                               TABLE OF CONTENTS

                                                                                                           Page

1.       The Securities.......................................................................................1
         (a)      General.....................................................................................1
         (b)      Forms of Securities.........................................................................1
         (c)      Book-Entry Provisions.......................................................................2
         (d)      Denominations...............................................................................3

2.       Fiscal Agent; Other Agents...........................................................................3

3.       Authentication.......................................................................................4

4.       Payment and Cancellation.............................................................................5
         (a)      Payment.....................................................................................5
         (b)      Cancellation................................................................................6

5.       Global Securities....................................................................................6

6.       Registration, Transfer and Exchange of Securities....................................................7
         (a)      General.....................................................................................7
         (b)      Transfers of Restricted Definitive Securities...............................................8
         (c)      Transfer of Global Securities...............................................................8
         (d)      Successive Registrations....................................................................9
         (e)      Information.................................................................................9
         (f)      Suspension..................................................................................9
         (g)      Legends.....................................................................................9

7.       Optional Redemption..................................................................................9
         (a)      Redemption Price............................................................................9
         (b)      Selection of Securities to be Redeemed.....................................................10
         (c)      Notice of Redemption; Effect of Notice.....................................................10
         (d)      Securities Redeemed in Part................................................................10

8.       Delivery of Certain Information.....................................................................10
         (a)      Rule 144A Information......................................................................10
         (b)      Periodic Reports...........................................................................11

9.       Conditions of Fiscal Agent's Obligations............................................................11
         (a)      Compensation and Indemnity.................................................................11
         (b)      Agency.....................................................................................11
         (c)      Advice of Counsel..........................................................................12
         (d)      Issuer Order...............................................................................12
         (e)      No Investigation...........................................................................12
         (f)      Not Responsible for Recitals or Issuance of Securities.....................................12


                                                       i



         (g)      Reliance...................................................................................12
         (h)      Interest in Securities, Etc................................................................12
         (i)      Non-Liability for Interest.................................................................13
         (j)      Certifications.............................................................................13
         (k)      No Implied Obligations.....................................................................13
         (l)      Force Majeure..............................................................................13
         (m)      No Special, Indirect, Punitive or Consequential Losses.....................................13
         (n)      Agents and Attorneys.......................................................................13
         (o)      Authorized Officers........................................................................13

10.      Resignation and Appointment of Successor............................................................14
         (a)      Fiscal Agent...............................................................................14
         (b)      Resignation................................................................................14
         (c)      Successors.................................................................................14
         (d)      Acknowledgement............................................................................15
         (e)      Merger, Consolidation, Etc.................................................................15

11.      Meetings and Amendments.............................................................................15
         (a)      Calling of Meeting, Notice and Quorum......................................................15
         (b)      Approval...................................................................................16
         (c)      Binding Nature of Amendments, Notices, Notations, Etc......................................18
         (d)      "Outstanding" Defined......................................................................18

12.      Governing Law.......................................................................................19

13.      Waiver of Jury Trial................................................................................19

14.      Notices.............................................................................................19

15.      Separability........................................................................................20

16.      Headings............................................................................................20

17.      Counterparts........................................................................................20


EXHIBIT A         FORM OF RULE 144A GLOBAL SECURITY.........................................................A-1

EXHIBIT B-1       FORM OF PERMANENT REGULATION S GLOBAL SECURITY..........................................B-1-1

EXHIBIT B-2       FORM OF TEMPORARY REGULATION S GLOBAL SECURITY..........................................B-2-1

EXHIBIT C         FORM OF DEFINITIVE SECURITY...............................................................C-1

EXHIBIT D         FORM OF TRANSFER CERTIFICATE FOR EXCHANGE OR TRANSFER OF RESTRICTED SECURITY..............D-1


                                                       ii



                  FISCAL AGENCY AGREEMENT, dated as of December 15, 2004 (this "Agreement"), between PHOENIX
LIFE INSURANCE COMPANY, a stock life insurance company organized under the laws of the State of New York (the
"Issuer"), having its principal office at One American Row, Hartford, Connecticut 06102, and THE BANK OF NEW
YORK, a New York banking corporation, as Fiscal Agent (together with any successor Fiscal Agent hereunder, the
"Fiscal Agent"). The Exhibits attached hereto shall be deemed to be a part of this Agreement.

                  1.    The Securities.

                  (a)   General. This Agreement is made in respect of $175,000,000 principal amount of 7.15%
Surplus Notes scheduled to mature on December 15, 2034 (the "Notes" or the "Securities"). Claims based upon the
Securities will rank below all Indebtedness, Policy Claims and Other Creditor Claims (each as hereinafter
defined), in accordance with Section 7435 of the New York Insurance Law (together with any successor provision,
and as may be hereafter amended from time to time, "Section 7435"). The payment by the Issuer of principal of,
interest on or Redemption Amount (as defined in Paragraph 4 of the Securities) with respect to the Securities
shall be conditioned upon the payment restrictions set forth in Paragraphs 5 and 11 of the Securities (the
"Payment Restrictions"). The Notes are scheduled to mature on December 15, 2034 (such date, the "Scheduled
Maturity Date"). Any reference herein to the term "Scheduled Maturity Date" or other date for the payment of
principal of the Notes shall include the date upon which any state or federal agency obtains an order or grants
approval for the rehabilitation, liquidation, conservation or dissolution of the Issuer.

                  (b)   Forms of Securities. The Securities are being offered and sold by the Issuer pursuant
to a Purchase Agreement, dated December 10, 2004 (as it may be amended, the "Purchase Agreement"), between the
Issuer and the Purchasers named therein (the "Purchasers").

                  (i)   Securities offered and sold in reliance on Rule 144A ("Rule 144A") under the
Securities Act of 1933, as amended (the "Act") pursuant to the Purchase Agreement shall be issued in the form
of one or more global notes (the "Rule 144A Global Securities") in definitive, fully registered form without
interest coupons, substantially in the form of Exhibit A hereto, with such applicable legends as are provided
for in Exhibit A.

                  (ii)  Securities offered and sold in reliance on Regulation S under the Act ("Regulation S")
pursuant to the Purchase Agreement shall be issued initially in the form of one or more temporary global notes
in definitive, fully registered form without interest coupons, substantially in the form of Exhibit B-2 hereto,
with such applicable legends as are provided for in Exhibit B-2 (the "Temporary Regulation S Global
Securities"). Each of the Temporary Regulation S Global Securities shall be exchangeable under the conditions
set forth in Section 5(e) below for one or more permanent global notes in registered form without interest
coupons, substantially in the form of Exhibit B-1 hereto, with such applicable legends as are provided for in
Exhibit B-1 (the "Permanent Regulation S Global Securities" and, together with the Temporary Regulation S
Global Securities and the Rule 144A Global Securities, the "Global Securities").


                                                       1



                  (iii) Securities (other than Global Securities) offered and sold pursuant to the Purchase
Agreement to institutional investors that are "accredited investors," within the meaning of Rule 501(a)(1),
(2), (3) or (7), or, if the equity owners thereof all meet one or more of the foregoing criteria, Rule
501(a)(8), under the Act ("Accredited Investors") and Global Securities which are hereinafter exchanged in
whole or in part for Notes in definitive form pursuant to Section 5(a) shall be issued in definitive, fully
registered form without interest coupons, substantially in the form of Exhibit C attached hereto, with such
applicable legends as are provided for in Exhibit C ("Definitive Securities"). Upon transfer of any Definitive
Security, registration of such transfer shall be effected in accordance with Section 6 hereof.

                  The aggregate principal amount of each Global Security may from time to time be increased or
decreased by adjustments made on the records of the Fiscal Agent, as custodian for the Depositary, as provided
in Section 5(b). Each Global Security and each Definitive Security shall be executed manually or by facsimile
on behalf of the Issuer by any two of its Chairman of the Board, President, Chief Financial Officer, Executive
Vice Presidents, Senior Vice Presidents and Secretary (the "Authorized Officers"), notwithstanding that such
officers, or any of them, shall have ceased, for any reason, to hold such offices prior to the authentication
and delivery of such Securities or did not hold such offices at the date of any such Security. The Securities
also may have such (i) additional provisions, omissions, variations or substitutions as are not inconsistent
with the provisions of this Agreement and (ii) letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with this Agreement, any law or with any
rules made pursuant thereto or with the rules of any securities exchange, insurance regulatory or other
governmental agency or depositary therefor or as may, consistently herewith, be determined by the Authorized
Officers executing such Securities, as conclusively evidenced by their proper execution of such Securities.

                  (c)   Book-Entry Provisions. This Section 1(c) shall apply to all Global Securities.

                  Each Global Security shall be registered in the name of a nominee of The Depository Trust
Company (the "Depositary") and deposited with the Fiscal Agent, at its New York office, as custodian for the
Depositary, duly executed by the Issuer and authenticated by the Fiscal Agent as hereinafter provided and shall
bear legends substantially to the following effect:

                  "Unless this Security is presented by an authorized representative of The
                  Depositary Trust Company ("DTC") to the Issuer or its agent for registration of
                  transfer, exchange or payment, and any Security issued in exchange for this
                  Security or any portion hereof is registered in the name of Cede & Co. or in
                  such other name as is requested by an authorized representative of DTC (and any
                  payment is made to Cede & Co. or to such other entity as is requested by an
                  authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
                  VALUE OR OTHERWISE BY OR TO ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF IS
                  WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
                  herein."


                                                 2



                  "This Security is a Global Security within the meaning of the Fiscal Agency
                  Agreement referred to hereinafter. This Global Security may not be exchanged, in
                  whole or in part, for a Security registered in the name of any person other than
                  DTC or a nominee thereof, except in the limited circumstances set forth in Section
                  5 of the Fiscal Agency Agreement, and may not be transferred, in whole or in part,
                  except in accordance with the restrictions set forth in Section 6(c) of the Fiscal
                  Agency Agreement."

                  Neither any members of, or participants in, the Depositary ("Agent Members") nor any other
persons on whose behalf Agent Members may act shall have any rights under this Fiscal Agency Agreement with
respect to any Global Security registered in the name of the Depositary or any nominee thereof, or under any
such Global Security, and the Depositary or such nominee, as the case may be, may be treated by the Issuer, the
Fiscal Agent and any agent of the Issuer or the Fiscal Agent as the absolute owner and holder of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer,
the Fiscal Agent or any agent of the Issuer or the Fiscal Agent from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or such nominee, as the case may be, or
impair, as between the Depositary, its Agent Members and any other person on whose behalf an Agent Member may
act, the operation of customary practices of such persons governing the exercise of the rights of a holder of
any Security.

                  (d)   Denominations. The Securities and beneficial interests in Securities shall be issuable:
(i) in the case of Securities offered and sold to the Initial Purchasers and subsequently transferred in
reliance on Rule 144A, in minimum denominations of $10,000 and any amount in excess thereof that is an integral
multiple of $1,000; (ii) in the case of Securities offered and sold to the Initial Purchasers and subsequently
transferred in reliance on Regulation S, in minimum denominations of $10,000 and any amount in excess thereof
that is an integral multiple of $1,000; and (iii) in the case of Securities offered and sold to the Initial
Purchasers and subsequently transferred to Accredited Investors, in minimum denominations of $100,000 and any
amount in excess thereof that is an integral multiple of $1,000.

                  2.    Fiscal Agent; Other Agents.

                  The Issuer hereby appoints The Bank of New York, acting through its corporate trust office at
101 Barclay Street, Floor 8 West, New York, New York 10286 (the "Corporate Trust Office"), as fiscal agent of
the Issuer in respect of the Securities upon the terms and subject to the conditions herein set forth, and The
Bank of New York hereby accepts such appointment. The Bank of New York, and any successor or successors as such
fiscal agent qualified and appointed in accordance with Section 10 hereof, are herein called the "Fiscal
Agent." The Fiscal Agent shall have the powers and authority granted to and conferred upon it in the Securities
and hereby and such further powers and authority to act on behalf of the Issuer as may be mutually agreed upon
by the Issuer and the Fiscal Agent. The Fiscal Agent shall keep a copy of this Agreement available for
inspection during normal business hours at its Corporate Trust Office. The Fiscal Agent or any Paying Agent (as
defined below) shall also act as Transfer Agent (as defined below). All of the terms and provisions with
respect to such powers and authority contained in the Securities are subject to and governed by the terms and
provisions hereof.


                                                       3



                  The Issuer may, at its discretion, appoint one or more agents (a "Paying Agent" or "Paying
Agents") for the payment, to the extent permitted under the Payment Restrictions, of the principal of, interest
on and Redemption Amount with respect to the Securities, and one or more agents (a "Transfer Agent" or
"Transfer Agents") for the transfer and exchange of Securities, at such place or places as the Issuer may
determine; provided, however, that the Issuer shall at all times maintain a Paying Agent and Transfer Agent in
the Borough of Manhattan, The City of New York (which Paying Agent and Transfer Agent may be the Fiscal Agent).
The Issuer hereby initially appoints the Fiscal Agent at its Corporate Trust Office as principal Paying Agent,
Transfer Agent and authenticating agent, and the Fiscal Agent hereby accepts such appointments. Each Transfer
Agent shall act as a security registrar and there shall be kept at the office of each Transfer Agent a register
in which, subject to such reasonable regulations as the Issuer may prescribe and as shall be reasonably
satisfactory to such Transfer Agent, the Issuer shall provide for the registration of Securities and the
registration of transfers of Securities. The Issuer shall promptly notify the Fiscal Agent of the name and
address of any other Paying Agent or Transfer Agent appointed by it and of the country or countries in which
such Paying Agent or Transfer Agent may act in that capacity, and will notify the Fiscal Agent of the
resignation or termination of any such Paying Agent or Transfer Agent. Subject to the provisions of Section
10(c) hereof, the Issuer may vary or terminate the appointment of any such Paying Agent or Transfer Agent at
any time and from time to time upon giving not less than 90 days' notice to such Paying Agent or Transfer
Agent, as the case may be, and to the Fiscal Agent. The Issuer shall cause notice of any resignation,
termination or appointment of the Fiscal Agent or any Paying Agent or Transfer Agent and of any change in the
office through which any such Agent will act to be provided to holders of Securities.

                  3.    Authentication.

                  The Fiscal Agent is authorized, upon receipt of Securities duly executed on behalf of the
Issuer for the purposes of the original issuance of Securities, to authenticate said Securities in an aggregate
principal amount not in excess of $175,000,000 and deliver said Securities in accordance with the written order
or orders of the Issuer signed on its behalf by an Authorized Officer, and thereafter the Fiscal Agent is
authorized to authenticate and make available for delivery Securities in accordance with the provisions therein
and hereinafter set forth.

                  The Fiscal Agent shall have the right to decline to authenticate and make available for
delivery any Securities under this Section if the Fiscal Agent, being advised by counsel, determines that such
action may not lawfully be taken or if the Fiscal Agent in good faith shall determine that such action would
expose the Fiscal Agent to personal liability to existing Holders.

                  The Fiscal Agent may, with the written consent of the Issuer, appoint by an instrument or
instruments in writing one or more agents (which may include itself) for the authentication of the Securities
and, with such consent, vary or terminate any such appointment upon written notice and approve any change in
the office through which any authenticating agent acts. The Issuer (by written notice to the Fiscal Agent and
the authenticating agent whose appointment is to be terminated) may also terminate any such appointment at any
time. The Fiscal Agent hereby agrees to obtain written acceptances from the entities concerned (in form and
substance satisfactory to the Issuer) of such appointments. In its acceptance of such


                                                       4



appointment, each such agent shall agree to act as an authenticating agent pursuant to the terms and conditions
of this Agreement.

                  4.    Payment and Cancellation.

                  (a)   Payment. For so long as the Fiscal Agent is acting as a Paying Agent hereunder, the
Issuer, subject to the Payment Restrictions, shall provide to the Fiscal Agent, in immediately available funds
on or prior to 10:00 a.m., New York time, on each date on which a payment of principal of, interest on or
Redemption Amount with respect to the Securities shall be payable, as set forth in the text of the Securities,
such amount, in U.S. dollars, as is necessary (along with any amounts in immediately available funds previously
provided to and then held by the Fiscal Agent and available for the purpose) to make such payment, and the
Issuer hereby authorizes and directs the Fiscal Agent from funds so provided to it to make or cause to be made
payment of the principal of, interest on and Redemption Amount with respect to the Securities (as the case may
be) in the manner, at the times and for the purposes set forth herein and in the text of said Securities;
provided, that (1) any permitted payment of interest on the Securities may be made by check mailed to the
persons (the "registered owners") in whose names such Securities are registered on the register maintained
pursuant to Section 6 hereof at the close of business on the record dates designated in the text of the
Securities and (2) the Issuer will not provide any such funds to the Fiscal Agent prior to such time as the
relevant payment of principal, interest or Redemption Amount is approved by the Superintendent of Insurance of
the State of New York (the "Superintendent"). Principal of and Redemption Amount with respect to the Securities
shall be payable against surrender thereof at the corporate trust office of the Fiscal Agent and at the offices
of such other paying agents as the Issuer shall have appointed pursuant to this Agreement. Any permitted
payment of principal of, interest on or Redemption Amount with respect to the Securities may be made by check.
Notwithstanding the foregoing, permitted payments of principal of, interest on or Redemption Amount with
respect to the Securities shall be made, in the case of a registered owner of at least $5,000,000 aggregate
principal amount of Securities, by wire transfer to an account maintained by the payee with a bank in the
United States as specified in the text of the Securities if such registered owner so elects by giving notice to
the Fiscal Agent, not less than 15 days (or such fewer days as the Fiscal Agent may accept at its discretion)
prior to the date on which such payments are scheduled to be made, of such election and of the account to which
payment is to be made. Unless such designation is revoked, any such designation made by such holder with
respect to such Securities shall remain in effect with respect to any future payments with respect to such
Securities payable to such holder. The Issuer shall pay any reasonable administrative costs in connection with
making any such payments. The Fiscal Agent shall arrange directly with any other Paying Agent who may have been
appointed by the Issuer pursuant to the provisions of Section 2 hereof for the payment, subject to the Payment
Restrictions, from funds so paid by the Issuer of the principal of, interest on and Redemption Amount with
respect to the Securities in the manner, at the times and for the purposes set forth herein and in the text of
said Securities. Notwithstanding the foregoing, the Issuer may provide directly to a Paying Agent funds for the
payment, subject to the Payment Restrictions, of the principal thereof, interest payable thereon and Redemption
Amount with respect thereto under an agreement with respect to such funds containing substantially the same
terms and conditions set forth in this Section 4(a) and in Section 9(b) hereof; and the Fiscal Agent shall have
no responsibility with respect to any funds so provided by the Issuer to any such Paying Agent.


                                                       5



                  Payments of principal of, interest on and Redemption Amount with respect to the Securities
shall be made in the manner set forth in the Securities, including the Payment Restrictions set forth therein.

                  (b)   Cancellation. All Securities delivered to the Fiscal Agent (or any other agent
appointed by the Issuer pursuant to Section 2 hereof) for payment, registration of transfer or exchange as
provided herein or in the Securities shall be marked "cancelled" and, in the case of any other such agent,
forwarded to the Fiscal Agent. All cancelled Securities held by the Fiscal Agent shall be disposed of by
returning such cancelled Securities to the Issuer in accordance with the Fiscal Agent's standard procedures or
as directed in writing by the Issuer; provided, however, that the Fiscal Agent shall not be required to destroy
such Securities.

                  5.    Global Securities.

                  (a)   Notwithstanding any other provisions of this Agreement or the Securities, a Global
Security shall not be exchanged in whole or in part for a Security registered in the name of any person other
than the Depositary or one or more nominees thereof; provided, that a Global Security may also be exchanged for
Securities registered in the names of any person designated by the Depositary in the event that (i) the
Depositary has notified the Issuer that it is unwilling or unable to continue as Depositary for such Global
Security or such Depositary has ceased to be a "clearing agency" registered under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), (ii) an event described in Paragraph 15(a) or the first sentence of
Paragraph 15(b) of the Securities has occurred and is continuing with respect to the Securities or (iii) a
request for certificates has been made upon 60 days' prior written notice given to the Fiscal Agent in
accordance with the Depositary's customary procedures and a copy of such notice has been received by the Issuer
from the Fiscal Agent. Any Global Security exchanged pursuant to clause (i) above shall be so exchanged in
whole and not in part and any Global Security exchanged pursuant to clause (ii) or (iii) above may be exchanged
in whole or from time to time in part as directed by the Depositary; and provided, further, that the Temporary
Global Securities shall not be exchanged for Securities except in accordance with Section 5(e) hereof. Any
Security issued in exchange for a Global Security or any portion thereof shall be a Global Security; provided,
that any such Security so issued that is registered in the name of a person other than the Depositary or a
nominee thereof shall not be a Global Security.

                  (b)   Securities issued in exchange for a Global Security or any portion thereof in
accordance with Section 5(a) shall be issued in definitive, fully registered form, without interest coupons,
shall have an aggregate principal amount equal to that of such Global Security or portion thereof to be so
exchanged, shall be registered in such names and be in such authorized denominations as the Depositary shall
designate and shall bear the applicable legends provided for herein, including, except as otherwise provided by
Section 6(g), the legend regarding transfer restrictions set forth in the form of Security attached hereto as
Exhibit C (in the case of a Restricted Definitive Security (as defined below) issued in exchange for a Global
Security or portion thereof) or set forth in the form of Security attached hereto as Exhibit A or B-1 (in the
case of a Global Security issued in exchange for a Rule 144A Global Security or portion thereof, a Temporary
Global Security or portion thereof (provided, that Temporary Regulation S Global Securities shall not be
exchanged for Securities except in accordance with Section 5(e) hereof) or a Permanent Regulation S Global
Security or portion thereof, as applicable). Any


                                                       6



Global Security to be exchanged in whole shall be surrendered by the Depositary to the Transfer Agent located
in the Borough of Manhattan, The City of New York, to be so exchanged. With regard to any Global Security to be
exchanged in part, either such Global Security shall be so surrendered for exchange or, if the Fiscal Agent is
acting as custodian for the Depositary or its nominee with respect to such Global Security, the principal
amount thereof shall be reduced, by an amount equal to the portion thereof to be so exchanged, by means of an
appropriate adjustment made on the records of the Fiscal Agent. Upon any such surrender or adjustment, the
Fiscal Agent shall authenticate and make available for delivery the Security issuable on such exchange to or
upon the order of the Depositary or an authorized representative thereof.

                  (c)   Subject to the provisions of Section 1(c) above, the registered holder may grant
proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through
Agent Members, to take any action which a holder is entitled to take under this Fiscal Agency Agreement or the
Securities.

                  (d)   In the event of the occurrence of any of the events specified in paragraph (a) of this
Section 5, the Issuer will promptly make available to the Fiscal Agent a reasonable supply of certificated
Securities in definitive, fully registered form without interest coupons.

                  (e)   The Temporary Global Securities will be held only through Euroclear Bank S.A./N.V., as
operator of the Euroclear system or Clearstream Banking, S.A., as participants in the Depositary and any
purchaser of Notes in a sale made in reliance on Regulation S may not sell or offer to sell such Notes prior to
the expiration of the 40-day distribution compliance period (within the meaning of Rule 903(b)(3) of Regulation
S) (the "Distribution Compliance Period") within the United States or to a U.S. person or for the account or
benefit of a U.S. person within the meaning of Regulation S (other than the Purchasers) unless the Notes are
registered under the Act or an exemption from registration pursuant to the Act is available. Promptly following
the expiration of the Distribution Compliance Period, the Temporary Regulation S Global Securities will be
exchanged by the Fiscal Agent for Permanent Regulation S Global Securities in identical aggregate face amount
in accordance with Regulation S. Simultaneously with the authentication of the Permanent Regulation S Global
Securities, the Fiscal Agent shall cancel the Temporary Regulation S Global Securities. The Permanent
Regulation S Global Securities will be deposited with the Fiscal Agent as custodian for the Depositary and will
be registered in the name of the Depositary or a nominee thereof.

                  6.    Registration, Transfer and Exchange of Securities.

                  (a)   General. The Fiscal Agent, as agent of the Issuer for this purpose, shall maintain at
its Corporate Trust Office in the Borough of Manhattan, The City of New York, a register of Securities for the
registration of Securities and the transfers and exchanges thereof. Subject to the provisions of this Section
6, upon presentation for transfer or exchange of any Security at the office of any Transfer Agent accompanied
by a written instrument of transfer or exchange in the form approved by the Issuer (it being understood that,
until notice to the contrary is given to holders of Securities, the Issuer shall be deemed to have approved the
form of instrument of transfer or exchange, if any, printed on any Security), executed by the registered
holder, in person or by such holder's attorney thereunto duly authorized in writing, such Security shall be
transferred upon the register for the Securities, and a new Security shall be authenticated


                                                       7



and issued in the of the transferee. No transfer of a Security to any person shall be effective unless and
until such Security has been registered in the name of such person.

                  To permit registrations of transfers and exchanges, the Issuer shall execute and the Fiscal
Agent (or an authenticating agent appointed pursuant to Section 2 hereof) shall authenticate and make available
for delivery Definitive Securities at the Fiscal Agent's or any Transfer Agent's request. No service charge
shall be made for any registration of transfer or exchange, but the Issuer or the Fiscal Agent may require
payment of a sum sufficient to cover any transfer tax or other governmental charge payable in connection with
any registration of transfer or exchange and any other amounts, if any, required to be paid by the provisions
of the Securities in connection with a transfer or exchange thereof.

                  All Securities issued upon any registration of transfer or exchange of Securities shall be
the valid obligations of the Issuer, subject to the Payment Restrictions, evidencing the same debt, and the
applicable provisions of this Fiscal Agency Agreement shall apply equally thereto, as the Securities
surrendered upon such registration of transfer or exchange.

                  (b)   Transfers of Restricted Definitive Securities. If a holder of Definitive Securities
that bear or are required to bear the legends set forth in the form of Security attached as Exhibit C hereto
("Restricted Definitive Securities") wishes at any time to transfer such Restricted Definitive Securities or to
exchange such Restricted Definitive Securities, such exchange or transfer may be effected only in accordance
with the provisions of this Section 6(b). Upon the receipt by the Fiscal Agent, as Transfer Agent, at its
office in The City of New York of (i) a Restricted Definitive Security accompanied by a written and executed
instrument of transfer or exchange and payment for any tax or charge as provided in Section 6(a) hereof and
(ii) the following additional information and documents, as applicable:

                  (1)   if such Restricted Definitive Security is owned by the holder thereof and is being
         exchanged, without transfer, or if such Restricted Definitive Security is being transferred pursuant
         to an exemption from registration in accordance with Rule 144A, Rule 144 or Regulation S under the
         Act, or pursuant to another available exemption from registration under the Act, a certification from
         such holder to that effect, substantially in the form of Exhibit D hereto, and an opinion or counsel,
         satisfactory in form and substance to the Fiscal Agent and the Issuer, to the effect that such
         transfer may be effected without registration under the Act; and

                  (2)   if the Restricted Definitive Security being transferred or exchanged contains a
         restrictive legend, certification to the effect that such transfer or exchange is in accordance with
         the restrictions contained in such legend, if required by the Fiscal Agent, the Fiscal Agent shall
         register the transfer of such Restricted Definitive Security or exchange such Restricted Definitive
         Security for an equal principal amount of Restricted Definitive Securities of other authorized
         denominations.

                  (c)   Transfer of Global Securities. A Global Security may not be transferred, in whole or in
part, to any person other than the Depositary or a nominee thereof, and no such


                                                       8



transfer to any such other person may be registered; provided, that this paragraph (c) shall not prohibit any
transfer of a Security that is issued in exchange for a Global Security but is not itself a Global Security.

                  (d)   Successive Registrations. Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each such registration shall be noted on
the Security register.

                  (e)   Information. Any Transfer Agent appointed pursuant to Section 2 hereof shall provide to
the Fiscal Agent such information as the Fiscal Agent may reasonably require in connection with the delivery by
such Transfer Agent of Securities upon transfer or exchange of Securities.

                  (f)   Suspension. No Transfer Agent shall be required to make registrations of transfer or
exchange of Securities during any periods designated in the text of the Securities as periods during which such
registration of transfer and exchanges need not be made.

                  (g)   Legends. If Securities are issued upon the transfer, exchange or replacement of
Securities not bearing the legends required, as applicable, by the form of Security attached as Exhibit A, B-1,
B-2 or C hereto (collectively, the "Legend"), the Securities so issued shall not bear the Legend. If Securities
are issued upon the transfer, exchange or replacement of Securities bearing the Legend, or if a request is made
to remove the Legend on a Security, the Securities so issued shall bear the Legend, or the Legend shall not be
removed, as the case may be, unless there is delivered to the Issuer such satisfactory evidence, which may
include an opinion of independent counsel licensed to practice law in the State of New York, as may be
reasonably required by the Issuer that neither the Legend nor the restrictions on transfer set forth therein
are required to ensure that transfers thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S
under the Act or that such Securities are not "restricted securities" within the meaning of Rule 144 under the
Act. Upon provision of such satisfactory evidence, the Fiscal Agent, at the direction of the Issuer, shall
authenticate and deliver a Security that does not bear the Legend. The Issuer agrees to indemnify the Fiscal
Agent for, and to hold it harmless against, any loss, liability or expense, including the fees and expenses of
counsel, reasonably incurred, arising out of or in connection with actions taken or omitted by the Fiscal Agent
in reliance upon such legal opinion and the delivery of a Security that does not bear a Legend.

                  (h)   With the prior approval of the Superintendent, the Issuer and any person that
constitutes an affiliate of the Issuer within the meaning of the Act may at any time purchase Securities in the
open market or otherwise at any price, for its own account or the account of others. Any Security so purchased
by the Issuer or any such affiliate for its own account shall be promptly surrendered to the Fiscal Agent for
cancellation and shall not thereafter be re-issued or resold.

                  7.    Optional Redemption.

                  (a)   Redemption Price. Subject to the Payment Restrictions, including the prior approval of
the Superintendent pursuant to Section 1307 of the New York Insurance Law (or any successor provision thereto,
and as may be hereafter amended from time to time), the


                                                       9



Notes are subject to redemption, as a whole or in part, at the option of the Issuer at any time and from time
to time, at a redemption price set forth in Paragraph 4 of the Securities. The Securities may not be redeemed
at the option of a holder thereof.

                  (b)   Selection of Securities to be Redeemed. If less than all the Securities are to be
redeemed, the Securities to be redeemed shall be selected by the Fiscal Agent from the Outstanding Securities
not previously called for redemption, not less than 30 days prior to the date of such redemption, by lot or by
such other method as the Fiscal Agent shall deem fair and appropriate and which, subject to Section 7(d), may
provide for the selection for redemption of portions (equal to $1,000 or a multiple thereof) of the principal
of Securities of a denomination larger than $1,000; provided, that if at the time of redemption such Securities
are registered as a Global Security, the Depositary for such Global Security shall determine, in accordance
with its procedures, the principal amount of such Securities to be redeemed held by each holder of a beneficial
interest in such Global Security. The Fiscal Agent shall notify the Issuer promptly of the Securities or
portions thereof selected by it to be redeemed.

                  (c)   Notice of Redemption; Effect of Notice. Notices to redeem Securities shall be given by
the Fiscal Agent on behalf of and at the expense of the Issuer in the manner provided in paragraph 4 of the
Securities. The effect of such notice shall be as set forth in such paragraph 4.

                  (d)   Securities Redeemed in Part. Any Security which is to be redeemed only in part shall be
surrendered with, if the Issuer or the Fiscal Agent so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Issuer and the Fiscal Agent duly executed by, the holder thereof or his
attorney duly authorized in writing, and the Issuer shall execute, and the Fiscal Agent shall authenticate and
deliver to the holder of such Security without service charge, a new registered Security or Securities, of any
authorized denomination as requested by such holder, and as permitted by Section 1(d) of this Agreement, in
aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security
so surrendered.

                  8.    Delivery of Certain Information.

                  (a)   Rule 144A Information. At any time when the Issuer is not subject to Section 13 or
15(d) of the Exchange Act, upon the request of a holder of a Definitive Security or the holder of a Global
Security or a beneficial interest in a Global Security that is not then freely transferable under Rule 144(k)
under the Act or any successor rule, the Issuer shall promptly furnish or cause to be furnished "Rule 144A
Information" (as defined below) to such holder, or to a prospective purchaser of such Security or interest
designated by such holder, in order to permit compliance by such holder with Rule 144A under the Act in
connection with the resale of such Security by such holder; provided, however, that the Issuer shall not be
required to furnish or cause to be furnished any Rule 144A Information to any such holder located outside the
United States who is not a "U.S. Person" within the meaning of Regulation S. "Rule 144A Information" shall be
such information as is specified pursuant to paragraph (d) (4) of Rule 144A (or any successor provision
thereto), as such provision (or successor provision) may be amended from time to time.


                                                      10




         (b)   Periodic Reports. The Issuer shall deliver (or shall cause the Fiscal Agent to deliver at the
expense of the Issuer) to each holder of a Security, promptly after such items are available, one copy of (i)
the audited statutory-basis financial statements of the Issuer (including the report of independent accountants
thereon and including the notes to such financial statements) and (ii) the annual statutory-basis statement of
the Issuer as filed by the Issuer with the New York Department of Insurance. In addition, upon the written
request of a holder of a Definitive Security or the holder of a Global Security or a beneficial interest in a
Global Security, the Issuer shall promptly furnish or cause to be furnished to such holder one copy of the
quarterly statutory-basis financial statements of the Issuer as filed by the Issuer with the New York
Department of Insurance.

         9.    Conditions of Fiscal Agent's Obligations.

               The Fiscal Agent accepts its obligations herein set forth upon the terms and conditions hereof,
including the following, to all of which the Issuer agrees and all of which are applicable to the Securities
and the holders from time to time thereof:

         (a) Compensation and Indemnity. Each of the Fiscal Agent, the Paying Agent and the Transfer Agent
shall be entitled to reasonable compensation as agreed from time to time in writing with the Issuer for all
services rendered by it, and the Issuer agrees promptly to pay such compensation and to reimburse the Fiscal
Agent for the reasonable out-of-pocket expenses (including reasonable fees and expenses of counsel of its
selection) reasonably incurred by it in connection with or arising out of its services hereunder, or the
issuance of the Securities and their offering and sale. The Issuer also agrees to indemnify the Fiscal Agent
and any Paying Agent and Transfer Agent for, and to hold it harmless against, any loss, damages, claim,
liability or expense, including taxes (other than taxes based upon, measured by or determined by the income of
the Fiscal Agent, any Paying Agent or Transfer Agent), incurred without gross negligence or bad faith, arising
out of or in connection with its acting as Fiscal Agent, Paying Agent or Transfer Agent hereunder, as well as
the reasonable costs and expenses reasonably incurred in defending against any claim of liability in the
premises. The obligations of the Issuer under this Section 8(a) shall survive payment of all the Securities or
the resignation or removal of the Fiscal Agent, the Paying Agent or the Transfer Agent. The Fiscal Agent, the
Paying Agent or the Transfer Agent shall promptly notify the Issuer of any claim for which it may seek
indemnity, including reasonable costs and expenses reasonably incurred in defending against any claim for
liability arising from the exercise or performance of any of its powers or duties hereunder. The Issuer shall
not be obligated to pay for any settlement of any such claim made without its consent.

         (b) Agency. In acting under this Agreement and in connection with the Securities, the Fiscal Agent is
acting solely as agent of the Issuer and does not assume any responsibility for the correctness of the recitals
in the Securities (except for the correctness of the statement in its certificate of authentication thereon) or
any obligation or relationship of agency or trust, for or with any of the owners or holders of the Securities,
except that all funds held by the Fiscal Agent for the payment of principal of, interest on and Redemption
Amount with respect to the Securities, to the extent permitted under the Payment Restrictions, shall be held in
trust for such owners or holders, as the case may be, as set forth herein and in the Securities; provided,
however, that monies held by the Fiscal Agent for the payment of the principal of,


                                                      11



interest on or Redemption Amount with respect to any of the Securities remaining unclaimed for two years after
such principal, interest or Redemption Amount has become payable in accordance with the Payment Restrictions
(whether at the Scheduled Maturity Date or otherwise) and monies sufficient therefor shall have been duly made
available for payment shall, together with any interest made available for payment thereon, be repaid to the
Issuer. Upon such repayment, the aforesaid trust with respect to the Securities shall terminate and all
liability of the Fiscal Agent and Paying Agents with respect to such funds shall thereupon cease.

         (c)   Advice of Counsel. The Fiscal Agent and any Paying Agent or Transfer Agent appointed by the
Issuer pursuant to Section 2 hereof may consult with their respective counsel or other independent counsel
satisfactory to them, and the advice or opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by them hereunder in good faith and in
accordance with such advice or opinion.

         (d)   Issuer Order. Any request or direction of the Issuer mentioned herein shall be sufficiently
evidenced by a written order of the Issuer.

         (e)   No Investigation. The Fiscal Agent shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document.

         (f)   Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the
Securities, except the Fiscal Agent's certificates of authentication, shall be taken as the statements of the
Issuer, and the Fiscal Agent, any Paying Agent or Transfer Agent assumes no responsibility for their
correctness. The Fiscal Agent makes no representations as to the validity or sufficiency of this Agreement or
of the Securities. The Fiscal Agent, Paying Agent and any Transfer Agent shall not be accountable for the use
or application by the Issuer of Securities or the proceeds thereof.

         (g)   Reliance. The Fiscal Agent and any Paying Agent or Transfer Agent appointed by the Issuer
pursuant to Section 2 hereof each shall be protected and shall incur no liability for or in respect of any
action taken or thing suffered by it in reliance upon any Security, notice, direction, consent, certificate,
affidavit, statement, or other paper or document believed by it, in good faith, to be genuine and to have been
passed upon or signed by the proper parties.

         (h)   Interest in Securities, Etc. The Fiscal Agent, any Paying Agent or Transfer Agent appointed by
the Issuer pursuant to Section 2 hereof and their respective officers, directors and employees may become the
owners of, or acquire any interest in, any Securities, with the same rights that they would have if they were
not the Fiscal Agent, such other Paying Agent or Transfer Agent or such person, and may engage or be interested
in any financial or other transaction with the Issuer, and may act on, or as depositary, trustee or agent for,
any committee or body of holders of Securities or other obligations of the Issuer, as freely as if they were
not the Fiscal Agent, such other Paying Agent or Transfer Agent or such person.


                                                      12


         (i)   Non-Liability for Interest. Subject to any agreement between the Issuer and the Fiscal Agent to
the contrary, the Fiscal Agent and the Paying Agent shall not be under any liability for interest on monies at
any time received by it pursuant to any of the provisions of this Agreement or the Securities.

         (j)   Certifications. Whenever in the administration of this Agreement the Fiscal Agent shall deem it
desirable that a matter of fact be proved or established prior to taking, suffering or omitting any action
hereunder, the Fiscal Agent (unless other evidence be herein specifically prescribed) may, in good faith, rely
upon a certificate signed by an Authorized Officer and delivered to the Fiscal Agent as to such matter of fact.

         (k)   No Implied Obligations. The duties and obligations of the Fiscal Agent and the Issuer with
respect to matters governed by this Agreement shall be determined solely by the express provisions hereof, and
neither the Fiscal Agent, the Paying Agent, the Transfer Agent nor the Issuer shall be liable except for the
performance of such duties and obligations as are specifically set forth in this Agreement and the Securities,
as applicable, and no implied covenants or obligations shall be read into this Agreement or the Securities
against the Fiscal Agent, the Paying Agent, the Transfer Agent or the Issuer. In the absence of gross
negligence on its part, neither the Paying Agent nor the Transfer Agent shall be liable for any action taken,
suffered or omitted, or for any error of judgment made by it in the performance of its duties under this
Agreement. Nothing in this Agreement shall be construed to require the Fiscal Agent, the Paying Agent or the
Transfer Agent to advance or expend its own funds.

         (l)   Force Majeure. The Fiscal Agent, the Paying Agent and the Transfer Agent shall not be
responsible or liable for any failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including,
without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances;
sabotage; epidemics; riots; interruptions; loss or malfunctions of utilities, computer (hardware or software)
or communication services; accidents; labor disputes; acts of civil or military authority and governmental
action.

         (m)   No Special, Indirect, Punitive or Consequential Losses. Anything in this Agreement
notwithstanding, in no event shall the Fiscal Agent, the Paying Agent or the Transfer Agent be liable for
special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited
to loss of profit), even if the Issuer has been advised as to the likelihood of such loss or damage and
regardless of the form of action.

         (n)   Agents and Attorneys. The Fiscal Agent, the Paying Agent and the Transfer Agent may execute any
of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or
attorneys and the Fiscal Agent, the Paying Agent or the Transfer Agent, as the case may be, shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it
hereunder.

         (o)   Authorized Officers. The Fiscal Agent, the Paying Agent and the Transfer Agent may request that
the Issuer deliver a certificate setting forth the names of individuals and/or titles of officers authorized at
such time to take specified actions pursuant to this


                                                      13



Agreement, which certificate may be signed by any person authorized to sign such a certificate, including any
person specified as so authorized in any such certificate previously delivered and not superseded.

         10.   Resignation and Appointment of Successor.

         (a)   Fiscal Agent. The Issuer agrees, for the benefit of the holders from time to time of the
Securities, that there shall at all times be a Fiscal Agent hereunder which shall be a bank or trust company
organized and doing business under the laws of the United States of America or the State of New York, in good
standing and having an established place of business in the Borough of Manhattan, The City of New York, and
authorized under such laws to exercise corporate trust powers and having a combined capital and surplus in
excess of $50,000,000, until all the Securities authenticated and delivered hereunder (i) shall have been
delivered to the Fiscal Agent for cancellation or (ii) have become payable, with the approval of the
Superintendent, and monies sufficient to pay the full principal of and any interest remaining unpaid on the
Securities shall have been made available for payment and either paid or returned to the Issuer as provided
herein and in such Securities.

         (b)   Resignation. The Fiscal Agent may at any time resign by giving written notice to the Issuer of
such intention on its part, specifying the date on which its desired resignation shall become effective;
provided, that such date shall not be less than 30 days from the date on which such notice is given, unless the
Issuer agrees to accept shorter notice. The Fiscal Agent hereunder may be removed at any time by the filing
with it of an instrument in writing signed on behalf of the Issuer and specifying such removal and the date
when it shall become effective. Notwithstanding the dates of effectiveness or resignation or removal, as the
case may be, to be specified in accordance with the preceding sentences, such resignation or removal shall take
effect only upon the appointment by the Issuer, as hereinafter provided, of a successor Fiscal Agent (which, to
qualify as such, shall for all purposes hereunder be a bank or trust company organized and doing business under
the laws of the United States of America or of the State of New York, in good standing and having and acting
through an established place of business in the Borough of Manhattan, The City of New York, authorized under
such laws to exercise corporate trust powers and having a combined capital and surplus in excess of
$50,000,000) and the acceptance of such appointment by such successor Fiscal Agent. Upon its resignation or
removal, the Fiscal Agent shall be entitled to payment by the Issuer pursuant to Section 9 hereof of
compensation for services rendered and to reimbursement of reasonable out-of-pocket expenses incurred
hereunder.

         (c)   Successors. In case at any time the Fiscal Agent (or any Paying Agent if such Paying Agent is
the only Paying Agent located in a place where, by the terms of the Securities or this Agreement, the Issuer is
required to maintain a Paying Agent) shall resign, or shall be removed, or shall become incapable of acting, or
shall be adjudged bankrupt or insolvent, or shall file a voluntary petition in bankruptcy or make an assignment
for the benefit of its creditors or consent to the appointment of a receiver of all or any substantial part of
its property, or shall admit in writing its inability to pay or meet its debts as they severally mature, or if
a receiver of it or of all or any substantial part of its property shall be appointed, or if an order of any
court shall be entered approving any petition filed by or against it under the provisions of applicable
receivership, bankruptcy, insolvency or other similar legislation, or if


                                                      14



any public officer shall take charge or control of it or of its property or affairs, for the purpose of
rehabilitation, conservation or liquidation, a successor Fiscal Agent or Paying Agent, as the case may be,
qualified as aforesaid, shall be appointed by the Issuer by an instrument in writing, filed with the successor
Fiscal Agent or Paying Agent, as the case may be, and the predecessor Fiscal Agent or Paying Agent, as the case
may be. Upon the appointment as aforesaid of a successor Fiscal Agent or Paying Agent, as the case may be, and
acceptance by such successor of such appointment, the Fiscal Agent or Paying Agent, as the case may be, so
succeeded shall cease to be Fiscal Agent or Paying Agent, as the case may be, hereunder. If no successor Fiscal
Agent or other Paying Agent, as the case may be, shall have been so appointed by the Issuer and shall have
accepted appointments as hereinafter provided, and, in the case of such other Paying Agent, if such other
Paying Agent is the only Paying Agent located in a place where, by the terms of the Securities or this
Agreement, the Issuer is required to maintain a Paying Agent, then any holder of a Security who has been a bona
fide holder of a Security for at least six months, on behalf of himself and all others similarly situated, or
the Fiscal Agent, may petition any court of competent jurisdiction for the appointment of a successor fiscal or
paying agent, as the case may be. The Issuer shall give prompt written notice to each other Paying Agent of the
appointment of a successor Fiscal Agent.


         (d)   Acknowledgement. Any successor Fiscal Agent appointed hereunder shall execute, acknowledge
and deliver to its predecessor and to the Issuer an instrument accepting such appointment hereunder, and
thereupon such successor Fiscal Agent, without any further act, deed or conveyance, shall become vested with
all the authority, rights, powers, trusts, immunities, duties and obligations of the Fiscal Agent hereunder,
and such predecessor, upon payment of its compensation and reimbursement of its disbursements then unpaid,
shall thereupon become obligated to transfer, deliver and pay over, and such successor Fiscal Agent shall be
entitled to receive, all monies, securities, books, records or other property on deposit with or held by such
predecessor as Fiscal Agent hereunder.

         (e)   Merger, Consolidation, Etc. Any bank or trust company into which the Fiscal Agent hereunder may
be merged, or resulting from any merger or consolidation to which the Fiscal Agent shall be a party, or to
which the Fiscal Agent shall sell or otherwise transfer all or substantially all the corporate trust assets or
business of the Fiscal Agent; provided, that it shall be qualified as aforesaid, shall be the successor Fiscal
Agent under this Agreement without the execution or filing of any paper or any further act on the part of any
of the parties hereto.

         11.   Meetings and Amendments.

         (a)   Calling of Meeting, Notice and Quorum. A meeting of holders of Securities may be called at any
time and from time to time to make, give or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement or the Securities to be made, given or taken by
holders of Securities or to modify, amend or supplement the terms of the Securities or this Agreement as
hereinafter provided, and subject to the requirement hereinafter set forth that the Issuer and the Fiscal Agent
may, only with the prior approval of the Superintendent, modify, amend or supplement this Fiscal Agency
Agreement or the terms of the Securities or give consents or waivers or take other actions with respect
thereto. The Fiscal Agent may at any time call a meeting of holders of Securities for any such purpose to be
held at such time and at such place in the Borough of Manhattan, The City


                                                      15


of New York as the Fiscal Agent shall determine. Notice of every meeting of holders of Securities, setting
forth the time and place of such meeting and in general terms the action proposed to be taken at such meeting,
shall be given as provided in the terms of the Securities, not less than 30 nor more than 60 days prior to the
date fixed for the meeting; provided, that in the case of any meeting to be reconvened after adjournment for
lack of a quorum, such notice shall be so given not less than 15 nor more than 60 days prior to the date fixed
for such meeting. In case at any time the Issuer or the holders of at least 10% in aggregate principal amount
of the Outstanding Securities (as defined in subsection (d) of this Section) shall have requested the Fiscal
Agent to call a meeting of the holders of Securities for any such purpose, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, the Fiscal Agent shall call such meeting for
such purposes by giving notice thereof.

         To be entitled to vote at any meeting of holders of Securities, a person shall be a holder of
Outstanding Securities or a person duly appointed by an instrument in writing as proxy for such a holder. The
persons entitled to vote a majority in principal amount of the Outstanding Securities shall constitute a
quorum. At the reconvening of any meeting adjourned for a lack of a quorum, the persons entitled to vote 25% in
principal amount of the Outstanding Securities shall constitute a quorum for the taking of any action set forth
in the notice of the original meeting. The Fiscal Agent may make such reasonable and customary regulations
consistent herewith as it shall deem advisable for any meeting of holders of Securities with respect to the
proof of the appointment of proxies in respect of holders of Securities, the record date for determining the
registered owners of Securities who are entitled to vote at such meeting (which date shall be designated by the
Fiscal Agent and set forth in the notice calling such meeting hereinabove referred to and which shall not be
less than 15 nor more than 60 days prior to such meeting; provided, that nothing in this paragraph shall be
construed to render ineffective any action taken by holders of the requisite principal amount of Outstanding
Securities on the date such action is taken), the adjournment and chairmanship of such meeting, the appointment
and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence
of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem
appropriate.

         (b)   Approval. (i) At any meeting of holders of Securities duly called and held as specified above,
upon the affirmative vote, in person or by proxy thereunto duly authorized in writing, of the holders of not
less than a majority in aggregate principal amount of the Securities then Outstanding represented at such
meeting, or (ii) with the written consent of the holders of not less than a majority in aggregate principal
amount of the Securities then Outstanding, in each case (i) or (ii) the Issuer and the Fiscal Agent may, with
the prior approval of the Superintendent, modify, amend or supplement the terms of the Securities or this
Agreement, in any way, and the holders of Securities may make, take or give any request, demand, authorization,
direction, notice, consent, waiver (including waiver of future compliance or past failure to perform) or other
action provided by this Agreement or the Securities to be made, given or taken by holders of Securities;
provided, however, that any such action, modification, amendment or supplement to be effected pursuant to
clause (i) of this subsection (b) shall be approved by the holders of not less than 25% of the aggregate
principal amount of Securities then Outstanding; and provided, further, that no such action, modification,
amendment or supplement, however effected, may, without the consent of the holder of each Security affected
thereby, (A) change the Scheduled Interest Payment Date or Scheduled Maturity Date (in each case, as defined in
the Securities) of


                                                      16


the principal of or any installment of interest on any Security, (B) reduce the principal amount of any
Security or the interest rate thereon, (C) change the currency in which, or the required place at which,
payment with respect to principal of, interest on or Redemption Amount with respect to the Securities is
payable, (D) change the Issuer's obligations under Section 8(a) hereof in any manner adverse to the interests
of the holder of a Security, (E) impair the right of a holder of a Security to institute suit for the
enforcement of any payment, if such payment is permitted under the Payment Restrictions, on or with respect to
any Security, (F) reduce the above-stated percentage of the principal amount of Outstanding Securities the vote
or consent of the holders of which is necessary to modify, amend or supplement this Agreement or the terms and
conditions of the Securities or to make, take or give any request, demand, authorization, direction, notice,
consent, waiver (including waiver of any future compliance or past failure to perform) or other action provided
hereby or thereby to be made, taken or given, (G) reduce the percentage of aggregate principal amount of
Outstanding Securities that constitutes the quorum required at any meeting of holders of Securities at which a
resolution is adopted, (H) change the restrictions on payment set forth in the Securities in a manner adverse
to such holder, or (I) change the provisions of Paragraph 11 of the Securities in a manner adverse to such
holder.

         The Issuer and the Fiscal Agent may, with the prior approval of the Superintendent and without the
vote or consent of any holder of Securities, amend this Agreement or the Securities for the purpose of (a)
adding to the covenants of the Issuer for the benefit of the holders of Securities, or (b) surrendering any
right or power conferred upon the Issuer, or (c) securing the Securities or (d) evidencing the succession of
another corporation to the Issuer and the assumption by such successor of the covenants and obligations of the
Issuer herein and in the Securities as permitted by this Agreement and the Securities, or (e) modifying the
restrictions on, and procedures for, resale and other transfers of the Securities to the extent required by any
change in applicable law or regulation, or the interpretation thereof, or in practices relating to the resale
or transfer of restricted securities generally, or (f) accommodating the issuance, if any, of Securities in
book-entry or certificated form and matters related thereto which do not adversely affect the interest of any
Security holder in any material respect, or (g) curing any ambiguity or correcting or supplementing any
defective provision contained herein or in the Securities in a manner which does not adversely affect the
interest of any Security holder in any material respect, or (h) effecting any amendment which the Issuer and
the Fiscal Agent may determine is necessary or desirable and which shall not adversely affect the interest of
any Security holder in any material respect.

         No amendment, modification or supplement of or to the Securities or this Agreement which would
adversely affect any of the rights, privileges, immunities, obligations or indemnities of the Fiscal Agent, the
Paying Agent or the Transfer Agent shall be effective without the consent of the Fiscal Agent, the Paying Agent
or the Transfer Agent, as the case may be.

         It shall not be necessary for the vote or consent of the holders of Securities to approve the
particular form of any proposed modification, amendment, supplement, request, demand, authorization, direction,
notice, consent, waiver or other action, but it shall be sufficient if such vote or consent shall approve the
substance thereof.


                                                       17


         The Fiscal Agent shall receive an opinion of counsel in connection with any amendment or supplement
entered into hereunder stating that the execution of such amendment or supplement is authorized or permitted
hereunder.

         (c)   Binding Nature of Amendments, Notices, Notations, Etc. Any instrument given by or on behalf of
any holder of a Security in connection with any consent to or vote for any such modification, amendment,
supplement, request, demand, authorization, direction, notice, consent, waiver or other action shall be
irrevocable once given and shall be conclusive and binding on all subsequent holders of such Security or any
Security issued directly or indirectly in exchange or substitution therefor or in lieu thereof. Any such
modification, amendment, supplement, request, demand, authorization, direction, notice, consent, waiver or
other action taken, made or given in accordance with Section 11(b) hereof, shall be conclusive and binding on
all holders of Securities whether or not they have given such consent or cast such vote or were present at any
meeting, and whether or not notation of such modification, amendment, supplement, request, demand,
authorization, direction, notice, consent, waiver or other action is made upon the Securities. Notice of any
modification or amendment of, supplement to, or request, demand, authorization, direction, notice, consent,
waiver or other action with respect to, the Securities or this Agreement (other than for purposes of curing any
ambiguity or of curing, correcting or supplementing any defective provision hereof or thereof) shall be given
to each holder of Securities affected thereby, in all cases as provided in the Securities. Any failure of the
Issuer to give notice to each holder of Securities, or any defect in such notice, shall not however, in any way
impair or affect the validity of any such modification, amendment, supplement, request, demand, authorization,
direction, notice, consent, waiver or action.

         Securities authenticated and delivered after the effectiveness of any such modification, amendment,
supplement, request, demand, authorization, direction, notice, consent, waiver or other action may bear a
notation in the form approved by the Fiscal Agent and the Issuer as to any matter provided for in such
modification, amendment, supplement, request, demand, authorization, direction, notice, consent, waiver or
other action. New Securities modified to conform, in the opinion of the Fiscal Agent and the Issuer, to any
such modification, amendment, supplement, request, demand, authorization, direction, notice, consent, waiver or
other action taken, made or given in accordance with Section 11(b) hereof may be prepared by the Issuer,
authenticated by the Fiscal Agent and delivered in exchange for Outstanding Securities.

         (d)   "Outstanding" Defined. For purposes of the provisions of this Agreement and the Securities, any
Security authenticated and delivered pursuant to this Agreement shall, as of any date of determination, be
deemed to be "Outstanding," except:

               (i)   Securities theretofore cancelled by the Fiscal Agent or delivered to the Fiscal Agent for
         cancellation;

               (ii)  Securities which have become payable, to the extent permitted under the Payment
         Restrictions, at the Scheduled Maturity Date or otherwise, and with respect to which, in each case,
         monies sufficient to pay the principal thereof and any


                                                      18


         interest thereon shall have been paid by the Issuer to the Fiscal Agent or any Paying Agent; and

               (iii) Securities in lieu of or in substitution for which other Securities shall have been
         authenticated and delivered pursuant to this Agreement;

provided, however, that in determining whether the holders of the requisite principal amount of Outstanding
Securities are present at a meeting of holders of Securities for quorum purposes or have consented to or voted
in favor of any request, demand, authorization, direction, notice, consent, waiver, amendment, modification or
supplement hereunder, Securities owned directly or indirectly by the Issuer, or any affiliate of the Issuer,
shall be disregarded and deemed not to be Outstanding.

         12.   Governing Law.

         THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, UNITED STATES OF AMERICA.

         13.   Waiver of Jury Trial.

         EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT.

         14.   Notices.

         All notices or communications hereunder, except as herein otherwise specifically provided, shall be in
writing, shall specify this Agreement by name and date and shall identify the Securities, and if sent to the
Fiscal Agent shall be delivered or transmitted by facsimile to it at The Bank of New York, 101 Barclay Street,
Floor 8 West, New York, New York 10286, Attention: Corporate Trust Trustee Administration, telephone: (212)
815-4770, fax: (212) 815-5707, and if sent to the Issuer shall be delivered or transmitted by facsimile to it
at One American Row, Hartford, Connecticut, 06102, Attention: Treasurer, telephone: (860) 403-6763, fax: (860)
403-5009. All notices of communications hereunder shall be deemed effective when received by a Responsible
Officer (as defined below) of the Fiscal Agent, the Paying Agent or the Transfer Agent, as the case may be, at
the corporate trust office of such agent. The foregoing addresses for notices or communications may be changed
by written notice given by the addressee to each party hereto, and the addressee's address shall be deemed
changed for all purposes from and after the giving of such notice.

         If the Fiscal Agent shall receive any notice or demand addressed to the Issuer by the holder of a
Security, the Fiscal Agent shall promptly forward such notice or demand to the Issuer. "Responsible Officer,"
when used with respect to the Fiscal Agent, the Paying Agent or the Transfer Agent, means any officer of the
Fiscal Agent, the Paying Agent or the Transfer Agent with direct responsibility for this Agreement and also
means, with respect to a particular corporate trust matter, any other officer of the Fiscal Agent, the Paying
Agent or the Transfer


                                                      19


Agent to whom such matters is referred because of his/her knowledge and familiarity with the particular
subject.

         15.   Separability.

         In case any provision in this Agreement or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

         16.   Headings.

         The section headings herein are for convenience of reference only and shall not affect the
construction hereof.

         17.   Counterparts.

         This Agreement may be executed in one or more counterparts, and by each party separately on a separate
counterpart, and each such counterpart when executed and delivered shall be deemed to be an original. Such
counterparts shall together constitute one and the same instrument.


                                                      20



         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

                                       PHOENIX LIFE INSURANCE COMPANY


                                       By:   /s/ Michael E. Haylon                                
                                             Name:    Michael E. Haylon
                                             Title:   Executive Vice President and
                                                       Chief Financial Officer



                                       THE BANK OF NEW YORK,
                                        as Fiscal Agent


                                       By:   /s/ Geovanni Barris                                  
                                             Name:    Geovanni Barris
                                             Title:   Vice President




                                                      21



                                                                                                     EXHIBIT A

                                       FORM OF RULE 144A GLOBAL SECURITY

















                                                      A-1





                                            FORM OF GLOBAL SECURITY

                  THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM AND IN ACCORDANCE WITH THE FISCAL AGENCY AGREEMENT, COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT
THE CORPORATE TRUST OFFICE OF THE FISCAL AGENT. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM SUCH REGISTRATION PROVIDED BY RULE 144A UNDER THE
ACT (TOGETHER WITH ANY SUCCESSOR PROVISION AND AS SUCH MAY BE HEREAFTER AMENDED FROM TIME TO TIME, "RULE
144A").

                  UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY ("DTC") TO PHOENIX LIFE INSURANCE COMPANY (THE "ISSUER") OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IN EXCHANGE FOR THIS SECURITY OR ANY PORTION HEREOF IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON OTHER THAN DTC OR A NOMINEE
THEREOF IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                  THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE FISCAL AGENCY AGREEMENT REFERRED
TO HEREINAFTER. THIS GLOBAL SECURITY MAY NOT BE EXCHANGED, IN WHOLE OR IN PART, FOR A SECURITY REGISTERED IN
THE NAME OF ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES SET FORTH IN
SECTION 5 OF THE FISCAL AGENCY AGREEMENT, AND MAY NOT BE TRANSFERRED, IN WHOLE OR IN PART, EXCEPT IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN SECTION 6(C) OF THE FISCAL AGENCY AGREEMENT.

                  [INCLUDE IF SECURITY IS A GLOBAL SECURITY OR SECURITY ISSUED IN EXCHANGE THEREFOR (UNLESS,
PURSUANT TO SECTION 6(G) OF THE FISCAL AGENCY AGREEMENT, THE ISSUER DETERMINES THAT THE LEGEND MAY BE REMOVED)]
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS SECURITY MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN A MINIMUM PRINCIPAL AMOUNT OF $10,000 TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, AS DEFINED IN RULE 144A, IN A TRANSACTION IN
ACCORDANCE WITH RULE 144A, (2) IN A MINIMUM PRINCIPAL AMOUNT OF $10,000 IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH



RULE 903 OR RULE 904 OF REGULATION S UNDER THE ACT (TOGETHER WITH ANY SUCCESSOR PROVISION THERETO, AND AS MAY
BE HEREAFTER AMENDED FROM TIME TO TIME, "REGULATION S"), (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 (OR ANY SUCCESSOR PROVISION THERETO, AND AS MAY BE HEREAFTER AMENDED FROM TIME TO TIME)
UNDER THE ACT (IF AVAILABLE), (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (5) SUBJECT
TO THE PRIOR APPROVAL OF THE SUPERINTENDENT (AS HEREINAFTER DEFINED) TO THE ISSUER OR ANY AFFILIATE OF THE
ISSUER (WITHIN THE MEANING OF THE ACT), IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES, AND (B) THAT THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESTRICTIONS REFERRED TO IN (A) ABOVE.

                  ALL PAYMENTS OF PRINCIPAL, INTEREST ON AND REDEMPTION AMOUNT (AS HEREINAFTER DEFINED) WITH
RESPECT TO THIS SECURITY MAY ONLY BE MADE OUT OF THE ISSUER'S FREE AND DIVISIBLE SURPLUS AND WITH THE PRIOR
APPROVAL OF THE SUPERINTENDENT OF INSURANCE OF THE STATE OF NEW YORK (THE "SUPERINTENDENT"), IN ACCORDANCE WITH
SECTION 1307 OF THE NEW YORK INSURANCE LAW (TOGETHER WITH ANY SUCCESSOR PROVISION, AND AS MAY BE HEREAFTER
AMENDED FROM TIME TO TIME, "SECTION 1307"). THERE ARE NO GUIDELINES OR INTERPRETATIONS AS TO THE EXTENT OF THE
SUPERINTENDENT'S DISCRETION UNDER SECTION 1307 IN DETERMINING WHETHER THE FINANCIAL CONDITION OF THE ISSUER
WARRANTS THE MAKING OF SUCH PAYMENTS.


                                                       2



                                         PHOENIX LIFE INSURANCE COMPANY

                                   7.15% Surplus Notes scheduled to mature on
                                               December 15, 2034

CUSIP No.:  71909V AA 2
ISIN No.:   US71909VAA26                                                                           $___________

                  PHOENIX LIFE INSURANCE COMPANY, a stock life insurance company organized under the laws of
the State of New York (herein called the "Issuer"), for value received, hereby promises to pay, subject to the
approval of the Superintendent pursuant to Section 1307, to Cede & Co., or registered assigns, the
principal sum of ____________ United States dollars ($____________) or such other amount (not to exceed one
hundred seventy five million dollars ($175,000,000) when taken together with all of the Issuer's 7.15% Surplus
Notes scheduled to mature on December 15, 2034 issued and outstanding in definitive certificated form or in the
form of another Global Security) as may from time to time represent the principal amount of the Issuer's 7.15%
Surplus Notes scheduled to mature on December 15, 2034 in respect of which beneficial interests are held
through the Depositary in the form of a Global Security, on December 15, 2034 (the "Scheduled Maturity Date"),
and to pay interest thereon, subject to the approval of the Superintendent pursuant to Section 1307, from
December 15, 2004 or from the most recent Scheduled Interest Payment Date to which interest has been paid or
duly provided for, semi-annually in arrears on June 15 and December 15 in each year, commencing June 15, 2005
(each a "Scheduled Interest Payment Date"), at the rate of 7.15% per annum, until the principal hereof is paid
or duly provided for. This Security is subject to redemption prior to the Scheduled Maturity Date as specified
in Paragraph 4 hereof. The date upon which any state or federal agency obtains an order or grants approval for
the rehabilitation, liquidation, conservation or dissolution of the Issuer shall also be deemed to be the
Scheduled Maturity Date. As specified on the reverse hereof, all payments of principal of, interest on or
Redemption Amount (as hereinafter defined) with respect to this Security may be made only out of the Issuer's
free and divisible surplus and only with the prior approval of the Superintendent pursuant to Section 1307. The
interest so payable, and punctually paid or duly provided for, on any Scheduled Interest Payment Date shall be
paid, in accordance with the terms of the Fiscal Agency Agreement hereinafter referred to, to the person (the
"registered holder") in whose name this Security (or one or more predecessor Securities) is registered at the
close of business on June 1 or December 1 (whether or not a Business Day (as defined on the reverse hereof)),
as the case may be (each a "Regular Record Date"), next preceding such Scheduled Interest Payment Date.
Interest on the Securities shall be calculated on the basis of a 360-day year of twelve 30-day months. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered
holder on such Regular Record Date and shall be paid to the person in whose name this Security (or one or more
predecessor Securities) is registered at the close of business on a special record date for the payment of such
interest to be fixed by the Issuer, notice whereof shall be given to registered holders of the Securities not
less than 15 days prior to such special record date.

                  Principal of and Redemption Amount with respect to this Security shall be payable against
surrender hereof at the corporate trust office of the Fiscal Agent hereinafter referred to and at the offices
of such other Paying Agents as the Issuer shall have appointed


                                                       3



pursuant to the Fiscal Agency Agreement. Payments of principal of and Redemption Amount with respect to the
Securities shall be made only against surrender of the Securities. Payments of interest on this Security may be
made, in accordance with the foregoing and subject to applicable laws and regulations, by check mailed on or
before the Scheduled Interest Payment Date of such payment to the person entitled thereto at such person's
address appearing on the aforementioned register. Any permitted payment of principal of and Redemption Amount
with respect to this Security may be made by check. Notwithstanding the foregoing, permitted payments of
principal of, any interest on or Redemption Amount with respect to this Security shall be made, in the case of
a registered holder of at least $5,000,000 aggregate principal amount of Securities, by wire transfer to an
account maintained by the payee with a bank in the United States if such registered holder so elects by giving
notice to the Fiscal Agent, not less than 15 days (or such fewer days as the Fiscal Agent may accept at its
discretion) prior to the applicable Scheduled Maturity Date or Scheduled Interest Payment Date hereof, of such
election and of the account to which payment is to be made. Unless such designation is revoked, any such
designation made by such holder with respect to such Securities shall remain in effect with respect to any
future payments with respect to such Securities payable to such holder. The Issuer agrees that until this
Security has been delivered to the Fiscal Agent for cancellation, or monies sufficient to pay the full
principal of and interest remaining unpaid on this Security have been made available for payment and either
paid or returned to the Issuer as provided herein, it will at all times maintain offices or agencies in the
Borough of Manhattan, The City of New York for the payment of the principal of, interest on and Redemption
Amount with respect to the Securities as herein provided.

                  Reference is hereby made to the further provisions of this Security set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

                  This Security may be executed by the Issuer by manual or facsimile signatures, and such
signatures may be executed on separate counterparts.

                  Unless the certificate of authentication hereon has been executed by the Fiscal Agent by
manual signature, this Security shall not be valid or obligatory for any purpose.


                                                       4



                  IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.

Dated:

                                                     PHOENIX LIFE INSURANCE COMPANY

                                                     By: ______________________________________________
                                                           Name:
                                                           Title:



                                                     By: ______________________________________________
                                                           Name:
                                                           Title:



                  This is one of the Securities referred to in the within-mentioned Fiscal Agency Agreement.

                                                     THE BANK OF NEW YORK
                                                     as Fiscal Agent

                                                     By: ______________________________________________
                                                                   Authorized Signatory


                                                       5


                                                FORM OF REVERSE

                  1. This Security is one of a duly authorized issue of 7.15% Surplus Notes scheduled to mature
on December 15, 2034 of the Issuer (herein called the "Securities" or "Notes"), limited in aggregate principal
amount to $175,000,000. The Issuer and The Bank of New York (as "Fiscal Agent") have entered into a Fiscal
Agency Agreement, dated as of December 15, 2004 (such instrument, as it may be duly amended from time to time,
is herein called the "Fiscal Agency Agreement"), which provides for the mechanism for issuing the Securities
and, inter alia, sets forth certain duties of the Fiscal Agent in connection therewith. As used herein, the
term "Fiscal Agent" includes any successor fiscal agent under the Fiscal Agency Agreement. Copies of the Fiscal
Agency Agreement are on file and available for inspection at the corporate trust office of the Fiscal Agent in
the Borough of Manhattan, The City of New York. Holders of Securities are referred to the Fiscal Agency
Agreement for a statement of the terms thereof, including those relating to transfer, payment, exchanges and
certain other matters to all of which terms the Securities are subject. The Fiscal Agent or any Paying Agent
shall also act as Transfer Agent and Securities registrar. Terms used herein which are defined in the Fiscal
Agency Agreement but not otherwise defined herein shall have the meanings assigned to such terms in the Fiscal
Agency Agreement.

                  The Securities are direct and unsecured obligations of the Issuer and, subject to the payment
restrictions contained in Paragraphs 5 and 11 hereof (the "Payment Restrictions"), are scheduled to mature on
December 15, 2034. Section 1307 provides that the Securities are not part of the legal liabilities of the
Issuer and are not a basis of any set-off against the Issuer.

                  The date upon which any state or federal agency obtains an order or grants approval for the
rehabilitation, liquidation, conservation or dissolution of the Issuer shall also be deemed to be the Scheduled
Maturity Date.

                  2. The Securities are issuable only in fully registered form without coupons. The Securities
and beneficial interests in Global Securities shall be issuable: (i) in the case of Securities offered and sold
to the Initial Purchasers and subsequently transferred in reliance on Rule 144A, in minimum denominations of
$10,000 and any amount in excess thereof that is an integral multiple of $1,000; (ii) in the case of Securities
offered and sold to the Initial Purchasers and subsequently transferred in reliance on Regulation S, in minimum
denominations of $10,000 and any amount in excess thereof that is an integral multiple of $1,000; and (iii) in
the case of Securities offered and sold to the Initial Purchasers and subsequently transferred to Accredited
Investors, in minimum denominations of $100,000 and any amount in excess thereof that is an integral multiple
of $1,000.

                  3. The Issuer shall maintain, in the Borough of Manhattan, The City of New York, a Transfer
Agent where Securities may be registered or surrendered for registration of transfer or exchange. The issuer
has initially appointed the corporate trust office of the Fiscal Agent as its Transfer Agent in the Borough of
Manhattan, The City of New York. The Issuer shall cause each Transfer Agent to act as a Securities registrar
and shall cause to be kept at the office of each Transfer Agent a register in which, subject to such reasonable
regulations as it may prescribe, the Issuer shall provide for the registration of Securities and registration
of transfers of Securities. The Issuer reserves the right to vary or terminate the appointment of any


                                                       6


Transfer Agent or to appoint additional or other Transfer Agents or to approve any change in the office through
which any Transfer Agent acts; provided, that there shall at all times be a Transfer Agent in the Borough of
Manhattan, The City of New York. The Issuer shall cause notice of any resignation, termination or appointment
of the Fiscal Agent or any Paying Agent or Transfer Agent and of any change in the office through which any
such Agent shall act to be provided to holders of Securities.

                  Subject to the restrictions set forth herein and in the Fiscal Agency Agreement, the transfer
of a Security is registrable on the aforementioned register upon surrender of such Security at any Transfer
Agent duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer
duly executed by, the registered holder thereof or his attorney duly authorized in writing. Upon such surrender
of this Security for registration of transfer, the Issuer shall execute, and the Fiscal Agent shall
authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities,
dated the date of authentication thereof, of any authorized denominations and of a like aggregate principal
amount.

                  Subject to the restrictions set forth herein and in the Fiscal Agency Agreement, at the
option of the registered holder upon request confirmed in writing, Securities may be exchanged for Securities
of any authorized denominations and aggregate principal amount upon surrender of the Securities to be exchanged
at the office of any Transfer Agent. Whenever any Securities are so surrendered for exchange, the Issuer shall
execute, and the Fiscal Agent shall authenticate and deliver, the Securities which the registered holder making
the exchange is entitled to receive. Any registration of transfer or exchange shall be effected upon the Issuer
being satisfied with the documents of title and identity of the person making the request and subject to the
restrictions set forth in the immediately following paragraph and such reasonable regulations as the Issuer may
from time to time agree with the Fiscal Agent.

                  All Securities issued upon any registration of transfer or exchange of Securities shall be
the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits, as the
Securities surrendered upon such registration of transfer or exchange. No service charge shall be made for any
registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith and any other amounts, if any, required to be paid
by the provisions of the Securities in connection with a transfer or exchange thereof.

                  Prior to due presentment of this Security for registration of transfer, the Issuer, the
Fiscal Agent and any agent of the Issuer or the Fiscal Agent may treat the person in whose name this Security
is registered as the absolute owner hereof for all purposes, whether or not this Security be overdue, and
neither the Issuer nor the Fiscal Agent nor any such agent shall be affected by notice to the contrary.

                  4. Subject to the Payment Restrictions, including the prior approval of the Superintendent
pursuant to Section 1307, the Securities are subject to redemption, as a whole or in part, at the option of the
Issuer at any time and from time to time, at a redemption price equal to the greater of (i) 100% of the
principal amount of the Securities to be redeemed and (ii) as determined by the Quotation Agent (as defined
below), the sum of the present values of the


                                                       7


remaining scheduled payments of principal and interest on the Securities to be redeemed (not including any
portion of such payments of interest accrued to the date of redemption) discounted to the date of redemption on
a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate
(as defined below), plus 35 basis points (the greater of (i) and (ii), the "Redemption Amount"), plus, in
either case (i) or (ii), accrued interest on the Securities to be redeemed to, but not including, the date of
redemption.

                  (i) "Adjusted Treasury Rate" means, with respect to any redemption date, the rate per annum
equal to the semi-annual equivalent yield to maturity, as determined by the Quotation Agent, of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for that redemption date.

                  (ii) "Comparable Treasury Issue" means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the Securities to be redeemed that
would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term of such Securities.

                  (iii) "Comparable Treasury Price" means, with respect to any redemption date, (i) the average
of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of
these Reference Treasury Dealer Quotations, or (ii) if the Issuer obtains fewer than three Reference Treasury
Dealer Quotations, the average of all such Quotations, in either case (i) or (ii) as determined by the Issuer.

                  (iv) "Quotation Agent" means Goldman, Sachs & Co. (or its successor) or any successor
Quotation Agent appointed by the Issuer from time to time.

                  (v) "Reference Treasury Dealer" means: (i) Goldman, Sachs & Co. (or its successor) and one or
more other Primary Treasury Dealers (as defined in this paragraph) appointed by the Issuer; provided, however,
that if Goldman, Sachs & Co. (or its successor) or any other selected Primary Treasury Dealer shall cease to be
a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Issuer shall
substitute therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by the
Issuer.

                  (vi) "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Issuer, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to
the Issuer by that Reference Treasury Dealer at 5:00 p.m. on the third Business Day before that redemption
date.

                  (b) Notice of any redemption pursuant to Paragraph 4(a) hereof will be given to holders of
the Securities as set forth below. Any determination that is contemplated in Paragraph 4(a) hereof to be made
by the Quotation Agent or the Issuer may be made by such person in its sole discretion and, when made by such
person, shall be final and binding on the Issuer, holders of the Securities and all other persons absent
manifest error. Interest installments


                                                       8



due on this Security on or prior to a redemption date will be payable to the holder of this Security of record
at the close of business on the relevant record date, all as provided in the Fiscal Agency Agreement.

                  (c) In the case of any partial redemption of the Securities, the Securities to be redeemed
shall be selected by the Fiscal Agent not less than 30 days prior to the date of such redemption, from the
outstanding Securities not previously called for redemption, by such method as the Fiscal Agent shall deem fair
and appropriate and which may provide for the selection for redemption of portions (equal to $1,000 or a
multiple thereof) of the principal of Securities of denomination larger than $1,000; provided, that if at the
time of redemption such Securities are registered as a Global Security, the Depositary for such Global Security
shall determine, in accordance with its procedures, the principal amount of such Securities to be redeemed held
by each holder of a beneficial interest in such Global Security. The Fiscal Agent shall notify the Issuer
promptly of the Securities or portion thereof to be redeemed.

                  (d) Notices to redeem Securities shall be given to holders of Securities in writing mailed,
first-class postage prepaid, to each holder of registered Securities, or portions thereof, so to be redeemed,
at his address as it appears in the securities register. Such notice will be given once not more than 60 days
nor less than 30 days prior to the date fixed for redemption. If by reason of the suspension of regular mail
service, or by reason of any other cause, it shall be impracticable to give notice to the holders of Securities
in the manner prescribed herein, then such notification in lieu thereof as shall be made by the Issuer or by
the Fiscal Agent on behalf of and at the instruction of the Issuer shall constitute sufficient provision of
such notice, if such notification shall, so far as may be practicable, approximate the terms and conditions of
the mailed notice in lieu of which it is given. Neither the failure to give notice nor any defect in any notice
given to any particular holder of a Note shall affect the sufficiency of any notice with respect to other
Securities. Notices to redeem Securities shall specify the date fixed for redemption, the Redemption Amount,
the place or places of payment, that payment will be made upon presentation and surrender of the Securities to
be redeemed (or portion thereof in the case of a partial redemption), that interest accrued to the date fixed
for redemption (unless the date of redemption is a Scheduled Interest Payment Date) will be paid as specified
in said notice, and that on and after said date interest thereon will cease to accrue if the Securities are so
redeemed. In addition, in the case of a partial redemption, such notice shall specify the Securities called for
redemption and the aggregate principal amount of the Securities to remain outstanding after the redemption.

                  (e) If notice of redemption has been given in the manner set forth in paragraph 4(d) hereof,
the Securities so to be redeemed shall be payable in full on the date specified in such notice and upon
presentation and surrender of the Securities at the place or places specified in such notice, the Securities
shall be paid and redeemed by the Issuer at the places and in the manner and currency herein specified and at
the Redemption Amount together with accrued interest (unless the redemption date is a Scheduled Interest
Payment Date) to, but not including, the redemption date. From and after the redemption date, if monies for the
redemption of Securities called for redemption shall have been made available at the Corporate Trust Office of
the Fiscal Agent for redemption on the redemption date, the Securities called for redemption shall cease to
bear interest, and the only right of the holders with respect to such Securities or portion thereof being
redeemed shall be to receive payment of the Redemption


                                                       9


Amount together with accrued interest (unless the redemption date is a Scheduled Interest Payment Date) to the
redemption date as aforesaid. If monies for the redemption of the Securities are not made available for payment
until after the redemption date, the Securities called for redemption shall not cease to bear interest until
such monies have been so made available.

                  (f) Any Security that is to be redeemed only in part shall be surrendered with, if the Issuer
or the Fiscal Agent so requires, due endorsement by, or a written instrument of transfer in form satisfactory
to the Issuer and the Fiscal Agent duly executed by, the holder thereof or his attorney duly authorized in
writing, and the Issuer shall execute, and the Fiscal Agent shall authenticate and deliver to the holder of
such Security without service charge, a new registered Security or Securities, of any authorized denomination
as requested by such holder, and as permitted by Section 1(d) of the Fiscal Agency Agreement, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so
surrendered.

                  5. (a) Notwithstanding anything to the contrary set forth herein or in the Fiscal Agency
Agreement, any payment of principal of, interest on or Redemption Amount or any other monies owing with respect
to this Security, whether at the Scheduled Interest Payment Date or Scheduled Maturity Date specified herein,
on the redemption date or otherwise, may be made only (i) out of the free and divisible surplus of the Issuer
which the Superintendent determines to be available for such payments under Section 1307 and (ii) with the
prior approval of the Superintendent whenever, in his judgment, the financial condition of the Issuer warrants
such payment, in accordance with Section 1307. If the Superintendent does not approve the making of any payment
of principal of or interest on this Security on the Scheduled Interest Payment Date or Scheduled Maturity Date
thereof, as specified herein, the Scheduled Interest Payment Date or Scheduled Maturity Date, as the case may
be, shall be extended and such payment shall be made by the Issuer on the next following Business Day on which
the Issuer shall have the approval of the Superintendent to make such payment. Interest will continue to accrue
on any such unpaid principal through the actual date of payment at the rate of interest stated on the face
hereof. Interest will not accrue on interest with respect to which the Scheduled Interest Payment Date has been
extended, during the period of such extension. If the Superintendent approves a payment of principal of or
interest on the Securities in an amount that is less than the full amount of principal of and interest on the
Securities then scheduled to be paid in respect of the Securities, payment of such partial amount shall be made
pro rata among Security holders as their interests may appear.

                  (b) Any payment of principal of or interest on any Security as to which the approval of the
Superintendent has been obtained and which is not punctually paid or duly provided for on the Scheduled
Interest Payment Date or Scheduled Maturity Date thereof, as set forth herein (such payment being referred to
as an "Unpaid Amount"), will forthwith cease to be payable to the registered owner of this Security on the
relevant record date designated herein, and such Unpaid Amount will instead be payable to the registered owner
of this Security on a subsequent special record date. The Issuer shall fix the special record date and payment
date for the payment of any Unpaid Amount. At least 15 days before the special record date, the Issuer shall
mail to each holder of the Securities and the Fiscal Agent a notice that states the special record date,
payment date and amount of interest or principal to be paid. On the payment date


                                                      10


set forth in such notice, the Paying Agent shall pay the amount of interest or principal to be so paid to each
holder of the Securities in the manner set forth in Section 4(a) of the Fiscal Agency Agreement.

                  6. (a) For so long as the Fiscal Agent is acting as a Paying Agent hereunder, the Issuer
shall provide, subject to the Payment Restrictions, to the Fiscal Agent in immediately available funds on or
prior to 10:00 a.m., New York time, of each date on which a payment of principal of, interest on or Redemption
Amount with respect to this Security is payable, as set forth herein, such amounts as are necessary (with any
amounts then held by the Fiscal Agent and available for the purpose) to make such payment, and the Issuer
hereby authorizes and directs the Fiscal Agent from funds so provided to it to make or cause to be made payment
of the principal of, interest on and Redemption Amount with respect to, as the case may be, this Security as
set forth herein and in the Fiscal Agency Agreement. Payments of interest on this Security may be made, in
accordance with the foregoing and subject to applicable laws and regulations, by check mailed on or before the
Scheduled Interest Payment Date of such payment to the person entitled thereto at such person's address
appearing on the aforementioned register. Any permitted payment of principal of this Security may be made by
check. Notwithstanding the foregoing, permitted payments of principal of, interest on or Redemption Amount with
respect to this Security may be made, in the case of a registered holder of at least $5,000,000 aggregate
principal amount of Securities, by wire transfer to an account maintained by the payee with a bank in the
United States if such registered holder so elects by giving notice to the Fiscal Agent, not less than 15 days
(or such fewer days as the Fiscal Agent may accept at its discretion) prior to the date on which such payment
is scheduled to be made, of such election and of the account to which payments are to be made. Unless such
designation is revoked, any such designation made by such holder with respect to such Securities shall remain
in effect with respect to any future payments with respect to such Securities payable to such holder. The
Issuer shall pay any reasonable administrative costs in connection with making any such payments. The Fiscal
Agent shall arrange directly with any other Paying Agent who may have been appointed by the Issuer pursuant to
the provisions of Section 2 of the Fiscal Agency Agreement for the payment from funds so paid by the Issuer of
the principal of, interest on and Redemption Amount with respect to this Security. Any monies held by the
Fiscal Agent for the payment of the principal of, interest on or Redemption Amount with respect to any of the
Securities remaining unclaimed for two years after such principal, interest or Redemption Amount has become
payable in accordance with the Payment Restrictions (whether at the Scheduled Maturity Date or otherwise) and
monies sufficient therefor shall have been duly made available for payment shall, together with any interest
made available for payment thereon, be repaid to the Issuer upon written request and upon such repayment all
liability of the Fiscal Agent with respect thereto shall cease, without, however, limiting in any way any
obligation the Issuer may have to pay the principal of, interest on and Redemption Amount with respect to this
Security, subject to the Payment Restrictions.

                  (b) In any case where the Scheduled Interest Payment Date, Scheduled Maturity Date or
redemption date of any Security shall be at any place of payment a day on which banking institutions are not
carrying out transactions in U.S. dollars or are authorized or obligated by law or executive order to close,
then payment of principal of, interest on or Redemption Amount with respect to any Security need not be made on
such date at such place but may be made on the next succeeding day at such place which is not a day on which
banking


                                                      11


institutions in the applicable jurisdiction are generally authorized or obligated by law or executive order to
close (a "Business Day"), with the same force and effect as if made on the Scheduled Interest Payment Date,
Scheduled Maturity Date or redemption date thereof, and no interest shall accrue for the period of such delay.

                  7. The Issuer shall pay all stamp and other duties, if any, which may be imposed by the
United States of America or any governmental entity or any political subdivision thereof or taxing authority of
or in the foregoing with respect to the Fiscal Agency Agreement or the initial issuance of this Security.
Except as otherwise specifically provided in this Security, the Issuer shall not be required to make any
payment with respect to any tax, duty, assessment or other governmental charge of whatever nature imposed or
levied by any government or any political subdivision or taxing authority thereof or therein.

                  8. For so long as any of the Securities remain outstanding or any amount remains unpaid on
any of the Securities:

                  (a) Except with respect to transactions covered by Paragraph 9 hereof, the Issuer will do or
cause to be done all things necessary to preserve and keep in full force and effect its corporate existence,
material rights (charter and statutory) and franchise; provided, however, that the Issuer shall not be required
to preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Issuer and that the Issuer has used its best
efforts to not disadvantage in any material respect the holders of the Securities, or that not preserving such
right or franchise is in the best interest of the policyholders of the Issuer having considered the interests
of the holders of the Securities.

                  (b) The Issuer will not be or become an open-end investment company, unit investment trust or
face amount certificate company that is or is required to be registered under Section 8 of the Investment
Company Act of 1940, as amended (the "Investment Company Act"), if such action would cause the Issuer to be in
violation of the Investment Company Act at any time prior to payment in full of the Securities.

                  (c) The Issuer shall use its best efforts to obtain the approval of the Superintendent in
accordance with Section 1307 for the payment by the Issuer of principal of and interest on the Securities on
the Scheduled Interest Payment Dates or Scheduled Maturity Date thereof, and, in the event any such approval
has not been obtained for any such payment at or prior to the Scheduled Interest Payment Date or Scheduled
Maturity Date thereof, as the case may be, to continue to use its best efforts to obtain such approval promptly
thereafter. Not less than 45 days prior to the Scheduled Interest Payment Date or Scheduled Maturity Date
thereof (excluding any such Scheduled Maturity Date that arises as a result of the obtaining of an order or the
granting of approval for the rehabilitation, liquidation, conservation or dissolution of the Issuer), the
Issuer will seek the approval of the Superintendent to make each payment of principal of and interest on the
Securities. In addition, the Issuer shall notify or cause to be notified the Fiscal Agent no later than 5
Business Days (as defined herein), and the Fiscal Agent will notify each holder, prior to the Scheduled
Interest Payment Date for interest on or the Scheduled Maturity Date for principal of any Security (excluding
any such Scheduled Maturity Date which arises as a result of the obtaining of an order or the granting of
approval for the


                                                      12


rehabilitation, liquidation, conservation or dissolution of the Issuer) in the event that the Superintendent
has not then approved the making of any such payment on such Scheduled Interest Payment Date or such Scheduled
Maturity Date, and thereafter shall promptly notify the Fiscal Agent, and the Fiscal Agent will notify each
holder, in the event that the Issuer shall have failed to make any such payment on any such Scheduled Interest
Payment Date or such Scheduled Maturity Date. Without limiting the Issuer's obligations set forth in this
paragraph, it is understood that, to the extent authorized by the Issuer's Board of Directors, the Issuer may
continue to declare and pay dividends to its stockholders and to declare policyowner dividends and to make
dividend payments on its participating policies, in each case even though payments on the Securities may not
have been approved by the Superintendent, regardless of the effect any such declaration or payment may have on
the Superintendent's decision regarding payment of principal of, interest on or Redemption Amount with respect
to the Securities.

                  9. For so long as any of the Securities remain outstanding or any amounts remain unpaid on
any of the Securities, the Issuer may convert itself in any legal manner from a stock life insurance company
into a mutual life insurance company, merge or consolidate with or into any other corporation or sell, convey,
transfer or otherwise dispose of all or substantially all of its assets to any person, firm or corporation, if
(i) (A) in the case of a conversion, merger or consolidation, the Issuer is the surviving corporation or (B) in
the case of a conversion, merger or consolidation where the Issuer is not the surviving corporation and in the
case of any such sale, conveyance, transfer or other disposition, the successor corporation is a corporation
organized and existing under the laws of the United States or a State thereof and such corporation expressly
assumes by supplemental fiscal agency agreement all the obligations of the Issuer under the Securities and the
Fiscal Agency Agreement, (ii) at the time of any such conversion, merger or consolidation, or such sale,
conveyance, transfer or other disposition, the Issuer shall not have failed to make payment of principal of,
interest on or Redemption Amount with respect to the Securities after having received the Superintendent's
prior approval to make such payment and, in the case of any payment of the Redemption Amount, the Issuer has
given notice of redemption pursuant to Paragraph 4(a) hereof and (iii) the Issuer has delivered to the Fiscal
Agent an Officer's Certificate stating that such conversion, merger, consolidation, sale, conveyance, transfer
or other disposition complies with this paragraph and that all conditions precedent herein provided for
relating to such transaction have been complied with. In the event of the assumption by a successor corporation
of the obligations of the Issuer as provided in clause (i)(B) of the immediately preceding sentence, such
successor corporation shall succeed to and be substituted for the Issuer hereunder and under the Fiscal Agency
Agreement and all such obligations of the Issuer shall terminate.

                  10. No "employee benefit plan" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") that is subject to Title I of ERISA, or "plan" within the
meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), as to which the
Issuer or any of its affiliates is a "party in interest" within the meaning of Section 3(14) of ERISA or a
"disqualified person" within the meaning of Section 4975(e)(2) of the Code (each a "Plan"), and no person using
the assets of any such Plan, may acquire this Security, unless the acquisition and continued holding of the
Security is exempt under one or more of Prohibited Transaction Class Exemptions ("PTCE") 84-14, 90-1, 91-38,
95-60 or 96-23 issued by the United States Department of Labor ("DOL") or another applicable prohibited
transaction exemption issued by the DOL. The purchase by any person of


                                                      13


this Security shall constitute a representation by such person to the Issuer and the Fiscal Agent that such
person either (i) is not a Plan or a person using the assets of any Plan or (ii) is a Plan or is a person using
the assets of a Plan to purchase this Security and such Plan is (x) a "Qualified Institutional Buyer" as
defined in Section 144A of the Act and (y) may acquire and hold this Security under PTCE 84-14, 90-1, 91-38,
95-60 or 96-23 or another applicable prohibited transaction exemption issued by the DOL. The restrictions on
purchases (and continued holding) of the Securities set forth in this Paragraph 10 are in addition to those
otherwise set forth in Section 6 of the Fiscal Agency Agreement and under applicable law.

                  11. (a) The Issuer agrees, and each Security holder by accepting a Security agrees, that the
indebtedness evidenced by the Securities is subordinated in right of payment, to the extent and in the manner
provided in this Paragraph, to the prior payment in full of all Indebtedness, Policy Claims and Other Creditor
Claims (each as hereinafter defined), in accordance with Section 7435 of the New York Insurance law (together
with any successor provision, and as may be hereafter amended from time to time, "Section 7435").

                  (b) Upon any distribution to creditors of the Issuer in any rehabilitation, liquidation,
conservation, dissolution or reorganization proceeding relating to the Issuer or its property, the priority of
claims of Security holders shall be determined in accordance with Section 7435. In a proceeding commenced under
Article 74 of the New York Insurance Law, claims for principal of, interest on or Redemption Amount with
respect to the Securities constitute Class 7 claims under Section 7435, as currently in effect. If the
Superintendent approves a payment of principal of, interest on or Redemption Amount with respect to the
Securities in an amount that is less than the full amount of principal of, interest on and Redemption Amount
with respect to the Securities then scheduled to be paid in respect of the Securities, payment of such partial
amount shall be made pro rata among Security holders as their interests may appear.

                  (c) If a distribution is made to Security holders that, because of this Paragraph, should not
have been made to them, the Security holders who receive the distribution shall hold it in trust for holders of
Policy Claims, Indebtedness and Other Creditor Claims and pay it over to them as their interests may appear.

                  (d) The Issuer shall promptly notify the Fiscal Agent and the Paying Agent of any facts known
to the Issuer that would cause a payment of principal of, interest on or Redemption Amount with respect to the
Securities to violate this Paragraph.

                  (e) This Paragraph defines the relative rights of security holders, on the one hand, and
holders of any other claims, in accordance with Section 7435, on the other hand. Nothing in this Security or
the Fiscal Agency Agreement shall: (i) impair, as between the Issuer and security holders, the obligation of
the Issuer which is, subject to the Payment Restrictions, absolute and unconditional to pay principal of and
interest on the Securities in accordance with their terms; (ii) affect the relative rights of Security holders
and creditors of the Issuer, other than holders of Policy Claims, Indebtedness or Other Creditor Claims; or
(iii) prevent the Fiscal Agent or any Security holder from exercising any available remedies upon a breach by
the Issuer of its obligations hereunder, subject to the rights of holders of Policy Claims, Indebtedness or
other Creditor Claims to receive distributions otherwise payable to Securityholders.


                                                      14


                  (f) No right of any holder of Policy Claims, Indebtedness or Other Creditor claims to enforce
the subordination of the indebtedness evidenced by the Securities shall be impaired by any act or failure to
act by the Issuer or by its failure to comply with the terms of the Fiscal Agency Agreement.

                  (g) Each holder of Securities, by acceptance thereof, authorizes and directs the Fiscal Agent
on its behalf to take such action as may be necessary or appropriate to effectuate the subordination provided
in this Paragraph and appoints the Fiscal Agent its attorney-in-fact for any and all such purposes.

                  As used herein, "Indebtedness" of the Issuer shall mean (i) all existing or future
indebtedness of the Issuer for borrowed money, (ii) all existing or future indebtedness for borrowed money of
other persons, the payment of which is guaranteed by the Issuer, (iii) all existing or future obligations of
the Issuer under any agreement obligating the Issuer to cause another person to maintain a minimum level of net
worth, or otherwise to ensure the solvency of such person and (iv) any expense or any claim or amount, to the
extent that payment of principal of, interest on and Redemption Amount with respect to the Securities is
required by law to be subordinated to the prior payment thereof. Any indebtedness of the Issuer which by its
express terms is subordinated in right of payment to, or ranks equally with, the Securities shall not
constitute Indebtedness. However, under current law the Issuer cannot issue any indebtedness that by its terms
is subordinate to the Securities. In addition, any other surplus notes or similar obligations of the Issuer
shall not constitute Indebtedness and will rank pari passu with the Securities.

                  As used herein, "Policy Claims" shall mean all existing or future claims of policyholders or
beneficiaries, as the case may be, under any and all existing or future policies, endorsements, riders and
other contracts of insurance, annuity contracts, including, without limitation, guaranteed investment
contracts, and funding agreements issued, assumed or renewed by the Issuer on or prior to the date hereof or
hereafter created, all claims under separate account agreements to the extent such claims are not fully
discharged by the assets held by the Issuer in the applicable separate accounts and all claims of The Life
Insurance Company Guarantee Corporation of New York or any other guaranty corporation or association of New
York or any other jurisdiction, other than claims described in clause (i) of the definition of "Other Creditor
Claims" below and claims for interest.

                  As used herein, "Other Creditor Claims" shall mean all other claims that, pursuant to Section
7435, have priority over claims with respect to the Securities. Under Section 7435 as currently in effect, such
other claims include: (i) claims with respect to the actual and necessary costs and expenses of administration
incurred by a liquidator, conservator, rehabilitator or ancillary rehabilitator under Section 7435; (ii) claims
with respect to the actual and necessary costs and expenses of administration incurred by The Life Insurance
Guaranty Corporation or The Life Insurance Company Guaranty Corporation of New York; (iii) claims of The Life
Insurance Company Guaranty Corporation for certain funds loaned to the Superintendent under Section 7713(d) of
the New York Insurance Law; (iv) debts up to $1,200 due to employees for services performed within one year of
the commencement of rehabilitation, liquidation, conservation, dissolution or reorganization proceedings; (v)
claims for payment for goods furnished or services rendered in the ordinary course of business within 90 days
of the


                                                      15


declaration of the impairment or insolvency of the Issuer; (vi) claims of the federal or any state or
local government (provided that claims for a penalty or forfeiture shall be included only to the extent of
pecuniary loss and reasonable costs occasioned by the act giving rise to the forfeiture or penalty); and (vii)
claims of general creditors and all other claims having priority under Section 7435.

                  12. For so long as any of the Securities remain outstanding or any amount remains unpaid on
any of the Securities, the Issuer shall, in accordance with Rule 144A, comply with the terms of the agreements
set forth in Section 8 of the Fiscal Agency Agreement. The provisions of Section 8 of the Fiscal Agency
Agreement are hereby incorporated mutatis mutandis herein.

                  13. In case this Security shall become mutilated, defaced, destroyed, lost or stolen, the
Issuer will execute and upon the Issuer's request the Fiscal Agent shall authenticate and deliver a new
Security, having a number not contemporaneously outstanding, of like tenor (including the same date of
issuance) and equal principal amount, registered in the same manner, dated the date of its authentication and
bearing interest from the date to which interest has been paid on this Security, in exchange and substitution
for this Security (upon surrender and cancellation thereof) or in lieu of and substitution for this Security.
In the case where this Security is destroyed, lost or stolen, the applicant for a substituted Security shall
furnish to the Issuer such security or indemnity as may be required by it to save each of it harmless, and, in
every case of destruction, loss or theft of this Security, the applicant shall also furnish to the Issuer
satisfactory evidence of the destruction, loss or theft of this Security and of the ownership thereof;
provided, however, that if the registered holder hereof is, in the judgment of the Issuer, an institution of
recognized responsibility, such holder's written agreement of indemnity shall be deemed to be satisfactory for
the issuance of a new Security in lieu of and substitution for this Security. The Fiscal Agent shall
authenticate any such substituted Security and deliver the same only upon written request or authorization of
the Issuer. Upon the issuance of any substituted Security, the Issuer may require the payment by the registered
holder thereof of a sum sufficient to cover fees and expenses connected therewith. In case this Security has
matured or is about to mature and shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer
may, subject to the Payment Restrictions, instead of issuing a substitute Security, pay or authorize the
payment of the same (without surrender thereof except if this Security is mutilated or defaced) upon compliance
by the registered holder with the provisions of this Paragraph 13 as hereinabove set forth.

                  14. Section 11 of the Fiscal Agency Agreement, which Section is hereby incorporated mutatis
mutandis by reference herein, provides that, with certain exceptions as therein provided and with the consent
of the holders of a majority of the principal amount of the outstanding Securities present at a meeting duly
called pursuant thereto or by written consent of such percentage of the principal amount of all outstanding
Securities, the Issuer and the Fiscal Agent may, with the prior approval of the Superintendent, modify, amend
or supplement the Fiscal Agency Agreement or the terms of the Securities or may give consents or waivers or
take other actions with respect thereto. Any such modification, amendment, supplement, consent, waiver or other
action shall be conclusive and binding on the holder of this Security and on all future holders of this
Security and of any Security issued upon the registration of transfer hereof or in exchange heretofore or in
lieu hereof, whether or not notation thereof is made upon this


                                                      16


Security. The Fiscal Agency Agreement and the terms of the Securities may, with the prior approval of the
Superintendent, be modified or amended by the Issuer and the Fiscal Agent, without the consent of any holders
of Securities, for the purpose of (a) adding to the covenants of the Issuer for the benefit of the holders of
Securities, or (b) surrendering any right or power conferred upon the Issuer, or (c) securing the Securities
pursuant to the requirements hereof, thereof or otherwise, or (d) evidencing the succession of another
corporation to the Issuer and the assumption by such successor of the covenants and obligations of the Issuer
herein and in the Fiscal Agency Agreement as permitted by the Securities and the Fiscal Agency Agreement, or
(e) modifying the restrictions on, and procedures for, resale and other transfers of the Securities to the
extent required by any change in applicable law or regulation (or the interpretation thereof) or in practices
relating to the resale or transfer of restricted securities generally, or (f) accommodating the issuance, if
any, of Securities in book-entry or certificated form and matters related thereto which do not adversely affect
the interest of any Security holder in any material respect, or (g) curing any ambiguity or correcting or
supplementing any defective provision contained herein or in the Fiscal Agency Agreement in a manner which does
not adversely affect the interest of any Security holder in any material respect, or (h) effecting any
amendment which the Issuer and the Fiscal Agent may determine is necessary or desirable and which shall not
adversely affect the interest of any Security holder, to all of which each holder of any Security, by
acceptance thereof, consents.

                  15. Holders of Securities may enforce the Fiscal Agency Agreement or the Securities only in
the manner set forth below.

                  (a) In the event that any state or federal agency shall obtain an order or grant approval for
the rehabilitation, liquidation, conservation or dissolution of the Issuer, the Securities will upon the
obtaining of such an order or the granting of such approval immediately mature in full without any action on
the part of the Fiscal Agent or any holder of the Securities, with payment thereon being subject to the Payment
Restrictions, and any restrictions imposed as a consequence of, or pursuant to, such proceedings.
Notwithstanding any other provision of this Security or the Fiscal Agency Agreement, in no event shall the
Fiscal Agent or any holder of the Securities be entitled to declare the Securities to immediately mature or
otherwise be immediately payable.

                  (b) In the event that the Superintendent approves in whole or in part a payment of any
principal of, interest on or Redemption Amount with respect to any Securities and the Issuer fails to pay the
full amount of such approved payment on the date such amount is scheduled to be paid, such approved amount will
be immediately payable on such date without any action on the part of the Fiscal Agent or any holder of
Securities. In the event that the Issuer fails to perform any of its other obligations hereunder or under the
Fiscal Agency Agreement, each holder of the Securities may pursue any available remedy to enforce the
performance of any provision of such Securities or the Fiscal Agency Agreement; provided, however, that such
remedy shall in no event include the right to declare the Securities immediately payable, and shall in no
circumstances be inconsistent with the provisions of Section 1307. A delay or omission by any Security holder
in exercising any right or remedy accruing as a result of the Issuer's failure to perform its obligations
hereunder or under the Fiscal Agency Agreement and the continuation thereof shall not impair such right or
remedy or constitute a waiver of or


                                                      17


acquiescence in such non-performance by the Issuer. To the extent permitted by law, no remedy is exclusive of
any other remedy and all remedies are cumulative.

                  (c) Notwithstanding any other provision of this Security or the Fiscal Agency Agreement, the
right of any holder of Securities to receive payment of the principal of and interest on such holder's
Securities on or after the respective Scheduled Interest Payment Dates or Scheduled Maturity Date expressed in
such Securities, or to bring suit for the enforcement of any such payment on or after such respective Scheduled
Interest Payment Dates or Scheduled Maturity Date, in each case subject to such payment on such dates having
received the approval of the Superintendent pursuant to the Payment Restrictions, including the approval of the
Superintendent pursuant to Section 1307, is absolute and unconditional and shall not be impaired or affected
without the consent of the holder.

                  16. No reference herein to the Fiscal Agency Agreement and no provision of this Security or
of the Fiscal Agency Agreement shall alter or impair the obligation of the Issuer, subject to the Payment
Restrictions, to pay the principal of, interest on and Redemption Amount with respect to this Security at the
times, place and rate, and in the coin or currency, herein prescribed.

                  17. THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REFERENCE TO CONFLICTS OF LAWS PROVISIONS.


                                                      18

                                                                                                   EXHIBIT B-1





                                 FORM OF PERMANENT REGULATION S GLOBAL SECURITY








                                                     B-1-1






                                 FORM OF REGULATION S PERMANENT GLOBAL SECURITY

         THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE REOFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM AND
IN ACCORDANCE WITH THE FISCAL AGENCY AGREEMENT, COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT THE CORPORATE
TRUST OFFICE OF THE FISCAL AGENT. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS
SECURITY MAY BE RELYING ON THE EXEMPTION FROM SUCH REGISTRATION PROVIDED BY RULE 144A UNDER THE ACT (TOGETHER
WITH ANY SUCCESSOR PROVISION AND AS SUCH MAY BE HEREAFTER AMENDED FROM TIME TO TIME, "RULE 144A").

         UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
("DTC") TO PHOENIX LIFE INSURANCE COMPANY (THE "ISSUER") OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY SECURITY ISSUED IN EXCHANGE FOR THIS SECURITY OR ANY PORTION HEREOF IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON OTHER THAN DTC OR A NOMINEE
THEREOF IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

         THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE FISCAL AGENCY AGREEMENT REFERRED TO
HEREINAFTER. THIS GLOBAL SECURITY MAY NOT BE EXCHANGED, IN WHOLE OR IN PART, FOR A SECURITY REGISTERED IN THE
NAME OF ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES SET FORTH IN
SECTION 5 OF THE FISCAL AGENCY AGREEMENT, AND MAY NOT BE TRANSFERRED, IN WHOLE OR IN PART, EXCEPT IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN SECTION 6(C) OF THE FISCAL AGENCY AGREEMENT.

         THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS SECURITY MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN A MINIMUM PRINCIPAL AMOUNT OF $10,000 TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, AS DEFINED IN RULE 144A, IN A
TRANSACTION IN ACCORDANCE WITH RULE 144A, (2) IN A MINIMUM PRINCIPAL AMOUNT OF $10,000 IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE ACT (TOGETHER WITH ANY SUCCESSOR
PROVISION THERETO, AND AS MAY BE HEREAFTER AMENDED FROM TIME TO TIME, "REGULATION S"), (3) PURSUANT TO AN
EXEMPTION FROM




REGISTRATION PROVIDED BY RULE 144 (OR ANY SUCCESSOR PROVISION THERETO, AND AS MAY BE HEREAFTER AMENDED FROM
TIME TO TIME) UNDER THE ACT (IF AVAILABLE), (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
OR (5) SUBJECT TO THE PRIOR APPROVAL OF THE SUPERINTENDENT (AS HEREINAFTER DEFINED) TO THE ISSUER OR ANY
AFFILIATE OF THE ISSUER (WITHIN THE MEANING OF THE ACT), IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES, AND (B) THAT THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESTRICTIONS REFERRED TO IN (A) ABOVE.

         ALL PAYMENTS OF PRINCIPAL (INCLUDING ANY PAYMENT OF A REDEMPTION AMOUNT, AS HEREINAFTER DEFINED) AND
INTEREST ON THIS SECURITY MAY ONLY BE MADE OUT OF THE ISSUER'S FREE AND DIVISIBLE SURPLUS AND WITH THE PRIOR
APPROVAL OF THE SUPERINTENDENT OF INSURANCE OF THE STATE OF NEW YORK (THE "SUPERINTENDENT"), IN ACCORDANCE WITH
SECTION 1307 OF THE NEW YORK INSURANCE LAW (TOGETHER WITH ANY SUCCESSOR PROVISION, AND AS MAY BE HEREAFTER
AMENDED FROM TIME TO TIME, "SECTION 1307"). THERE ARE NO GUIDELINES OR INTERPRETATIONS AS TO THE EXTENT OF THE
SUPERINTENDENT'S DISCRETION UNDER SECTION 1307 IN DETERMINING WHETHER THE FINANCIAL CONDITION OF THE ISSUER
WARRANTS THE MAKING OF SUCH PAYMENTS.

         BY ITS ACCEPTANCE OF THE NOTES, EACH HOLDER OF THE NOTES SHALL BE DEEMED TO HAVE REPRESENTED TO THE
ISSUER THAT (A) SUCH HOLDER NOT A U.S. PERSON (AS DEFINED IN REGULATION S) AND IS NOT PURCHASING THE NOTES IN
THE UNITED STATES OF AMERICA, ITS TERRITORIES, ITS POSSESSIONS AND OTHER AREAS SUBJECT TO ITS JURISDICTION (THE
"UNITED STATES"); AND (B) IT IS ITS INTENT AND IT UNDERSTANDS IT IS THE INTENT OF THE ISSUER, FOR PURPOSES OF
UNITED STATES FEDERAL, STATE AND LOCAL INCOME TAXES THAT THE NOTES BE TREATED AS INDEBTEDNESS OF THE ISSUER,
AGREES TO SUCH TREATMENT AND AGREES TO TAKE NO ACTION INCONSISTENT WITH SUCH TREATMENT.


                                                       2



                                         PHOENIX LIFE INSURANCE COMPANY

                                   7.15% Surplus Notes scheduled to mature on
                                               December 15, 2034

CUSIP No.:  U71885 AA2
ISIN No.:   USU71885AA28                                                                      $__________

         PHOENIX LIFE INSURANCE COMPANY, a stock life insurance company organized under the laws of the State
of New York (herein called the "Issuer"), for value received, hereby promises to pay, subject to the approval
of the Superintendent pursuant to Section 1307, to Cede & Co., or registered assigns, the principal sum of
__________ United States dollars ($_________) or such other amount (not to exceed one hundred seventy five
million dollars ($175,000,000) when taken together with all of the Issuer's 7.15% Surplus Notes scheduled to
mature on December 15, 2034 issued and outstanding in definitive certificated form or in the form of another
global Security) as may from time to time represent the principal amount of the Issuer's 7.15% Surplus Notes
scheduled to mature on December 15, 2034 in respect of which beneficial interests are held through the
Depositary in the form of a global Security, on December 15, 2034 (the "Scheduled Maturity Date"), and to pay
interest thereon, subject to the approval of the Superintendent pursuant to Section 1307, from December 15,
2004 or from the most recent Scheduled Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on June 15 and December 15 in each year, commencing June 15, 2005 (each a
"Scheduled Interest Payment Date"), at the rate of 7.15% per annum, until the principal hereof is paid or duly
provided for. This Security is subject to redemption prior to the Scheduled Maturity Date as specified in
paragraph 4 hereof. The date upon which any state or federal agency obtains an order or grants approval for the
rehabilitation, liquidation, conservation or dissolution of the Issuer shall also be deemed to be the Scheduled
Maturity Date. As specified on the reverse hereof, all payments of principal of, interest on or Redemption
Amount (as hereinafter defined) with respect to this Security may be made only out of the Issuer's free and
divisible surplus and only with the prior approval of the Superintendent pursuant to Section 1307. The interest
so payable, and punctually paid or duly provided for, on any Scheduled Interest Payment Date shall be paid, in
accordance with the terms of the Fiscal Agency Agreement hereinafter referred to, to the person (the
"registered holder") in whose name this Security (or one or more predecessor Securities) is registered at the
close of business on June 1 or December 1 (whether or not a Business Day (as defined on the reverse hereof)),
as the case may be (each a "Regular Record Date"), next preceding such Scheduled Interest Payment Date.
Interest on the Securities shall be calculated on the basis of a 360-day year of twelve 30-day months. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered
holder on such Regular Record Date and shall be paid to the person in whose name this Security (or one or more
predecessor Securities) is registered at the close of business on a special record date for the payment of such
interest to be fixed by the Issuer, notice whereof shall be given to registered holders of the Securities not
less than 15 days prior to such special record date.

         Principal of and Redemption Amount with respect to this Security shall be payable against surrender
hereof at the corporate trust office of the Fiscal Agent hereinafter referred to and at the offices of such
other Paying Agents as the Issuer shall have appointed


                                                       3


pursuant to the Fiscal Agency Agreement. Payments of principal of and Redemption Amount with respect to the
Securities shall be made only against surrender of the Securities. Payments of interest on this Security may be
made, in accordance with the foregoing and subject to applicable laws and regulations, by check mailed on or
before the Scheduled Interest Payment Date of such payment to the person entitled thereto at such person's
address appearing on the aforementioned register. Any permitted payment of principal of and Redemption Amount
with respect to this Security may be made by check. Notwithstanding the forgoing, permitted payments of
principal of, any interest on or Redemption Amount with respect to this Security shall be made, in the case of
a registered holder of at least $5,000,000 aggregate principal amount of Securities, by wire transfer to an
account maintained by the payee with a bank in the United States if such registered holder so elects by giving
notice to the Fiscal Agent, not less than 15 days (or such fewer days as the Fiscal Agent may accept at its
discretion) prior to the applicable Scheduled Maturity Date or Scheduled Interest Payment Date hereof, of such
election and of the account to which payment is to be made. Unless such designation is revoked, any such
designation made by such holder with respect to such Securities shall remain in effect with respect to any
future payments with respect to such Securities payable to such holder. The Issuer agrees that until this
Security has been delivered to the Fiscal Agent for cancellation, or monies sufficient to pay the full
principal of and interest remaining unpaid on this Security have been made available for payment and either
paid or returned to the Issuer as provided herein, it will at all times maintain offices or agencies in the
Borough of Manhattan, The City of New York for the payment of the principal of, interest on and Redemption
Amount with respect to the Securities as herein provided.

         Reference is hereby made to the further provisions of this Security set forth on the reverse hereof,
which further provisions shall for all purposes have the same effect as if set forth at this place.

         This Security may be executed by the Issuer by manual or facsimile signatures, and such signatures may
be executed on separate counterparts.

         Unless the certificate of authentication hereon has been executed by the Fiscal Agent by manual
signature, this Security shall not be valid or obligatory for any purpose.


                                                       4



         IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.


Dated:


                                                 PHOENIX LIFE INSURANCE COMPANY


                                                 By:                                                        
                                                       Name:
                                                       Title:



                                                 By:                                                        
                                                       Name:
                                                       Title:



         This is one of the Securities referred to in the within-mentioned Fiscal Agency Agreement.


                                                 THE BANK OF NEW YORK
                                                 as Fiscal Agent


                                                 By:                                                        
                                                                      Authorized Signatory


                                                       5




                                                FORM OF REVERSE

         1.     This Security is one of a duly authorized issue of 7.15% Surplus Notes scheduled to mature on
December 15, 2034 of the Issuer (herein called the "Securities" or "Notes"), limited in aggregate principal
amount to $175,000,000. The Issuer and The Bank of New York (as "Fiscal Agent") have entered into a Fiscal
Agency Agreement, dated as of December 15, 2004 (such instrument, as it may be duly amended from time to time,
is herein called the "Fiscal Agency Agreement"), which provides for the mechanism for issuing the Securities
and, inter alia, sets forth certain duties of the Fiscal Agent in connection therewith. As used herein, the
term "Fiscal Agent" includes any successor fiscal agent under the Fiscal Agency Agreement. Copies of the Fiscal
Agency Agreement are on file and available for inspection at the corporate trust office of the Fiscal Agent in
the Borough of Manhattan, The City of New York. Holders of Securities are referred to the Fiscal Agency
Agreement for a statement of the terms thereof, including those relating to transfer, payment, exchanges and
certain other matters to all of which terms the Securities are subject. The Fiscal Agent or any Paying Agent
shall also act as Transfer Agent and Securities registrar. Terms used herein which are defined in the Fiscal
Agency Agreement but not otherwise defined herein shall have the meanings assigned to such terms in the Fiscal
Agency Agreement.

         The Securities are direct and unsecured obligations of the Issuer and, subject to the payment
restrictions contained in Paragraphs 5 and 11 hereof (the "Payment Restrictions"), are scheduled to mature on
December 15, 2034. Section 1307 provides that the Securities are not part of the legal liabilities of the
Issuer and are not a basis of any set-off against the Issuer.

         The date upon which any state or federal agency obtains an order or grants approval for the
rehabilitation, liquidation, conservation or dissolution of the Issuer shall also be deemed to be the Scheduled
Maturity Date.

         2.     The Securities are issuable only in fully registered form without coupons. The Securities and
beneficial interests in Global Securities shall be issuable: (i) in the case of Securities offered and sold to
the Initial Purchasers and subsequently transferred in reliance on Rule 144A, in minimum denominations of
$10,000 and any amount in excess thereof that is an integral multiple of $1,000; (ii) in the case of Securities
offered and sold to the Initial Purchasers and subsequently transferred in reliance on Regulation S, in minimum
denominations of $10,000 and any amount in excess thereof that is an integral multiple of $1,000; and (iii) in
the case of Securities offered and sold to the Initial Purchasers and subsequently transferred to Accredited
Investors, in minimum denominations of $100,000 and any amount in excess thereof that is an integral multiple
of $1,000.

         3.     The Issuer shall maintain, in the Borough of Manhattan, The City of New York, a Transfer Agent
where Securities may be registered or surrendered for registration of transfer or exchange. The Issuer has
initially appointed the corporate trust office of the Fiscal Agent as its Transfer Agent in the Borough of
Manhattan, The City of New York. The Issuer shall cause each Transfer Agent to act as a Securities registrar
and shall cause to be kept at the office of each Transfer Agent a register in which, subject to such reasonable
regulations as it may prescribe, the Issuer shall provide for the registration of Securities and registration
of transfers of Securities. The Issuer reserves the right to vary or terminate the appointment of any


                                                       6


Transfer Agent or to appoint additional or other Transfer Agents or to approve any change in the office through
which any Transfer Agent acts; provided, that there shall at all times be a Transfer Agent in the Borough of
Manhattan, The City of New York. The Issuer shall cause notice of any resignation, termination or appointment
of the Fiscal Agent or any Paying Agent or Transfer Agent and of any change in the office through which any
such Agent shall act to be provided to holders of Securities.

         Subject to the restrictions set forth herein and in the Fiscal Agency Agreement, the transfer of a
Security is registrable on the aforementioned register upon surrender of such Security at any Transfer Agent
duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer duly
executed by, the registered holder thereof or his attorney duly authorized in writing. Upon such surrender of
this Security for registration of transfer, the Issuer shall execute, and the Fiscal Agent shall authenticate
and deliver, in the name of the designated transferee or transferees, one or more new Securities, dated the
date of authentication thereof, of any authorized denominations and of a like aggregate principal amount.

         Subject to the restrictions set forth herein and in the Fiscal Agency Agreement, at the option of the
registered holder upon request confirmed in writing, Securities may be exchanged for Securities of any
authorized denominations and aggregate principal amount upon surrender of the Securities to be exchanged at the
office of any Transfer Agent. Whenever any Securities are so surrendered for exchange, the Issuer shall
execute, and the Fiscal Agent shall authenticate and deliver, the Securities which the registered holder making
the exchange is entitled to receive. Any registration of transfer or exchange shall be effected upon the Issuer
being satisfied with the documents of title and identity of the person making the request and subject to the
restrictions set forth in the immediately following paragraph and such reasonable regulations as the Issuer may
from time to time agree with the Fiscal Agent.

         All Securities issued upon any registration of transfer or exchange of Securities shall be the valid
obligations of the Issuer, evidencing the same debt, and entitled to the same benefits, as the Securities
surrendered upon such registration of transfer or exchange. No service charge shall be made for any
registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith and any other amounts, if any, required to be paid
by the provisions of the Securities in connection with a transfer or exchange thereof.

         Prior to due presentment of this Security for registration of transfer, the Issuer, the Fiscal Agent
and any agent of the Issuer or the Fiscal Agent may treat the person in whose name this Security is registered
as the absolute owner hereof for all purposes, whether or not this Security be overdue, and neither the Issuer
nor the Fiscal Agent nor any such agent shall be affected by notice to the contrary.

         4.     (a) Subject to the Payment Restrictions, including the prior approval of the Superintendent
pursuant to Section 1307, the Securities are subject to redemption, as a whole or in part, at the option of the
Issuer at any time and from time to time, at a redemption price equal to the greater of (i) 100% of the
principal amount of the Securities to be redeemed and (ii) as determined by the Quotation Agent (as defined
below), the sum of the present values of the


                                                       7


remaining scheduled payments of principal and interest on the Securities to be redeemed (not including any
portion of such payments of interest accrued to the date of redemption) discounted to the date of redemption on
a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate
(as defined below), plus 35 basis points (the greater of (i) and (ii), the "Redemption Amount"), plus, in
either case (i) or (ii), accrued interest on the Securities to be redeemed to, but not including, the date of
redemption.

         (i)    "Adjusted Treasury Rate" means, with respect to any redemption date, the rate per annum equal
to the semi-annual equivalent yield to maturity, as determined by the Quotation Agent, of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for that redemption date.

         (ii)   "Comparable Treasury Issue" means the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the remaining term of the Securities to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues
of corporate debt securities of comparable maturity to the remaining term of such Securities.

         (iii)  "Comparable Treasury Price" means, with respect to any redemption date, (i) the average of the
Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of these
Reference Treasury Dealer Quotations, or (ii) if the Issuer obtains fewer than three Reference Treasury Dealer
Quotations, the average of all such Quotations, in either case (i) or (ii) as determined by the Issuer.

         (iv)   "Quotation Agent" means Goldman, Sachs & Co. (or its successor) or any successor Quotation
Agent appointed by the Issuer from time to time.

         (v)    "Reference Treasury Dealer" means: (i) Goldman, Sachs & Co. (or its successor) and one or more
other Primary Treasury Dealers (as defined in this paragraph) appointed by the Issuer; provided,
however, that if Goldman, Sachs & Co. (or its successor) or any other selected Primary Treasury Dealer shall
cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Issuer shall substitute therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer
selected by the Issuer.

         (vi)   "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Issuer, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to
the Issuer by that Reference Treasury Dealer at 5:00 p.m. on the third Business Day before that redemption
date.

         (b)    Notice of any redemption pursuant to paragraph 4(a) hereof will be given to holders of the
Securities as set forth below. Any determination that is contemplated in paragraph 4(a) hereof to be made by
the Quotation Agent or the Issuer may be made by such person in its sole discretion and, when made by such
person, shall be final and binding on the Issuer, holders of the Securities and all other persons absent
manifest error. Interest installments


                                                       8


due on this Security on or prior to a redemption date will be payable to the holder of this Security of record
at the close of business on the relevant record date, all as provided in the Fiscal Agency Agreement.

         (c)    In the case of any partial redemption of the Securities, the Securities to be redeemed shall be
selected by the Fiscal Agent not less than 30 days prior to the date of such redemption, from the outstanding
Securities not previously called for redemption, by such method as the Fiscal Agent shall deem fair and
appropriate and which may provide for the selection for redemption of portions (equal to $1,000 or a multiple
thereof) of the principal of Securities of denomination larger than $1,000; provided, that if at the time of
redemption such Securities are registered as a Global Security, the Depositary for such Global Security shall
determine, in accordance with its procedures, the principal amount of such Securities to be redeemed held by
each holder of a beneficial interest in such Global Security. The Fiscal Agent shall notify the Issuer promptly
of the Securities or portion thereof to be redeemed.

         (d)    Notices to redeem Securities shall be given to holders of Securities in writing mailed,
first-class postage prepaid, to each holder of registered Securities, or portions thereof, so to be redeemed,
at his address as it appears in the securities register. Such notice will be given once not more than 60 days
nor less than 30 days prior to the date fixed for redemption. If by reason of the suspension of regular mail
service, or by reason of any other cause, it shall be impracticable to give notice to the holders of Securities
in the manner prescribed herein, then such notification in lieu thereof as shall be made by the Issuer or by
the Fiscal Agent on behalf of and at the instruction of the Issuer shall constitute sufficient provision of
such notice, if such notification shall, so far as may be practicable, approximate the terms and conditions of
the mailed notice in lieu of which it is given. Neither the failure to give notice nor any defect in any notice
given to any particular holder of a Note shall affect the sufficiency of any notice with respect to other
Securities. Notices to redeem Securities shall specify the date fixed for redemption, the Redemption Amount,
the place or places of payment, that payment will be made upon presentation and surrender of the Securities to
be redeemed (or portion thereof in the case of a partial redemption), that interest accrued to the date fixed
for redemption (unless the date of redemption is a Scheduled Interest Payment Date) will be paid as specified
in said notice, and that on and after said date interest thereon will cease to accrue if the Securities are so
redeemed. In addition, in the case of a partial redemption, such notice shall specify the Securities called for
redemption and the aggregate principal amount of the Securities to remain outstanding after the redemption.

         (e)    If notice of redemption has been given in the manner set forth in paragraph 4(d) hereof, the
Securities so to be redeemed shall be payable in full on the date specified in such notice and upon
presentation and surrender of the Securities at the place or places specified in such notice, the Securities
shall be paid and redeemed by the Issuer at the places and in the manner and currency herein specified and at
the Redemption Amount together with accrued interest (unless the redemption date is a Scheduled Interest
Payment Date) to, but not including, the redemption date. From and after the redemption date, if monies for the
redemption of Securities called for redemption shall have been made available at the Corporate Trust Office of
the Fiscal Agent for redemption on the redemption date, the Securities called for redemption shall cease to
bear interest, and the only right of the holders with respect to such Securities or portion thereof being
redeemed shall be to receive payment of the Redemption


                                                       9





Amount together with accrued interest (unless the redemption date is a Scheduled Interest Payment Date) to the
redemption date as aforesaid. If monies for the redemption of the Securities are not made available for payment
until after the redemption date, the Securities called for redemption shall not cease to bear interest until
such monies have been so made available.

         (f)   Any Security that is to be redeemed only in part shall be surrendered with, if the Issuer or
the Fiscal Agent so requires, due endorsement by, or a written instrument of transfer in form satisfactory to
the Issuer and the Fiscal Agent duly executed by, the holder thereof or his attorney duly authorized in
writing, and the Issuer shall execute, and the Fiscal Agent shall authenticate and deliver to the holder of
such Security without service charge, a new registered Security or Securities, of any authorized denomination
as requested by such holder, and as permitted by Section 1(d) of the Fiscal Agency Agreement, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so
surrendered.

         5.    (a) Notwithstanding anything to the contrary set forth herein or in the Fiscal Agency Agreement,
any payment of principal of, interest on or Redemption Amount or any other monies owing with respect to this
Security, whether at the Scheduled Interest Payment Date or Scheduled Maturity Date specified herein, on the
redemption date or otherwise, may be made only (i) out of the free and divisible surplus of the Issuer which
the Superintendent determines to be available for such payments under Section 1307 and (ii) with the prior
approval of the Superintendent whenever, in his judgment, the financial condition of the Issuer warrants such
payment, in accordance with Section 1307. If the Superintendent does not approve the making of any payment of
principal of or interest on this Security on the Scheduled Interest Payment Date or Scheduled Maturity Date
thereof, as specified herein, the Scheduled Interest Payment Date or Scheduled Maturity Date, as the case may
be, shall be extended and such payment shall be made by the Issuer on the next following Business Day on which
the Issuer shall have the approval of the Superintendent to make such payment. Interest will continue to accrue
on any such unpaid principal through the actual date of payment at the rate of interest stated on the face
hereof. Interest will not accrue on interest with respect to which the Scheduled Interest Payment Date has been
extended, during the period of such extension. If the Superintendent approves a payment of principal of or
interest on the Securities in an amount that is less than the full amount of principal of and interest on the
Securities then scheduled to be paid in respect of the Securities, payment of such partial amount shall be made
pro rata among Security holders as their interests may appear.

         (b)   Any payment of principal of or interest on any Security as to which the approval of the
Superintendent has been obtained and which is not punctually paid or duly provided for on the Scheduled
Interest Payment Date or Scheduled Maturity Date thereof, as set forth herein (such payment being referred to
as an "Unpaid Amount"), will forthwith cease to be payable to the registered owner of this Security on the
relevant record date designated herein, and such Unpaid Amount will instead be payable to the registered owner
of this Security on a subsequent special record date. The Issuer shall fix the special record date and payment
date for the payment of any Unpaid Amount. At least 15 days before the special record date, the Issuer shall
mail to each holder of the Securities and the Fiscal Agent a notice that states the special record date,
payment date and amount of interest or principal to be paid. On the payment date


                                                      10


set forth in such notice, the Paying Agent shall pay the amount of interest or principal to be so paid to each
holder of the Securities in the manner set forth in Section 4(a) of the Fiscal Agency Agreement.

         6.    (a) For so long as the Fiscal Agent is acting as a Paying Agent hereunder, the Issuer shall
provide, subject to the Payment Restrictions, to the Fiscal Agent in immediately available funds on or prior to
10:00 a.m., New York time, of each date on which a payment of principal of, interest on or Redemption Amount
with respect to this Security is payable, as set forth herein, such amounts as are necessary (with any amounts
then held by the Fiscal Agent and available for the purpose) to make such payment, and the Issuer hereby
authorizes and directs the Fiscal Agent from funds so provided to it to make or cause to be made payment of the
principal of, interest on and Redemption Amount with respect to, as the case may be, this Security as set forth
herein and in the Fiscal Agency Agreement. Payments of interest on this Security may be made, in accordance
with the foregoing and subject to applicable laws and regulations, by check mailed on or before the Scheduled
Interest Payment Date of such payment to the person entitled thereto at such person's address appearing on the
aforementioned register. Any permitted payment of principal of this Security may be made by check.
Notwithstanding the foregoing, permitted payments of principal of, interest on or Redemption Amount with
respect to this Security may be made, in the case of a registered holder of at least $5,000,000 aggregate
principal amount of Securities, by wire transfer to an account maintained by the payee with a bank in the
United States if such registered holder so elects by giving notice to the Fiscal Agent, not less than 15 days
(or such fewer days as the Fiscal Agent may accept at its discretion) prior to the date on which such payment
is scheduled to be made, of such election and of the account to which payments are to be made. Unless such
designation is revoked, any such designation made by such holder with respect to such Securities shall remain
in effect with respect to any future payments with respect to such Securities payable to such holder. The
Issuer shall pay any reasonable administrative costs in connection with making any such payments. The Fiscal
Agent shall arrange directly with any other Paying Agent who may have been appointed by the Issuer pursuant to
the provisions of Section 2 of the Fiscal Agency Agreement for the payment from funds so paid by the Issuer of
the principal of, interest on and Redemption Amount with respect to this Security. Any monies held by the
Fiscal Agent for the payment of the principal of, interest on or Redemption Amount with respect to any of the
Securities remaining unclaimed for two years after such principal, interest or Redemption Amount has become
payable in accordance with the Payment Restrictions (whether at the Scheduled Maturity Date or otherwise) and
monies sufficient therefor shall have been duly made available for payment shall, together with any interest
made available for payment thereon, be repaid to the Issuer upon written request and upon such repayment all
liability of the Fiscal Agent with respect thereto shall cease, without, however, limiting in any way any
obligation the Issuer may have to pay the principal of, interest on and Redemption Amount with respect to this
Security, subject to the Payment Restrictions.

         (b)   In any case where the Scheduled Interest Payment Date, Scheduled Maturity Date or redemption
date of any Security shall be at any place of payment a day on which banking institutions are not carrying out
transactions in U.S. dollars or are authorized or obligated by law or executive order to close, then payment of
principal of, interest on or Redemption Amount with respect to any Security need not be made on such date at
such place but may be made on the next succeeding day at such place which is not a day on which banking


                                                      11


institutions in the applicable jurisdiction are generally authorized or obligated by law or executive order to
close (a "Business Day"), with the same force and effect as if made on the Scheduled Interest Payment Date,
Scheduled Maturity Date or redemption date thereof, and no interest shall accrue for the period of such delay.

         7.    The Issuer shall pay all stamp and other duties, if any, which may be imposed by the United
States of America or any governmental entity or any political subdivision thereof or taxing authority of or in
the foregoing with respect to the Fiscal Agency Agreement or the initial issuance of this Security. Except as
otherwise specifically provided in this Security, the Issuer shall not be required to make any payment with
respect to any tax, duty, assessment or other governmental charge of whatever nature imposed or levied by any
government or any political subdivision or taxing authority thereof or therein.

         8.    For so long as any of the Securities remain outstanding or any amount remains unpaid on any of
the Securities:

         (a)   Except with respect to transactions covered by Paragraph 9 hereof, the Issuer will do or cause
to be done all things necessary to preserve and keep in full force and effect its corporate existence, material
rights (charter and statutory) and franchise; provided, however, that the Issuer shall not be required to
preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the Issuer and that the Issuer has used its best efforts
to not disadvantage in any material respect the holders of the Securities, or that not preserving such right or
franchise is in the best interest of the policyholders of the Issuer having considered the interests of the
holders of the Securities.

         (b)   The Issuer will not be or become an open-end investment company, unit investment trust or face
amount certificate company that is or is required to be registered under Section 8 of the Investment Company
Act of 1940, as amended (the "Investment Company Act"), if such action would cause the Issuer to be in
violation of the Investment Company Act at any time prior to payment in full of the Securities.

         (c)   The Issuer shall use its best efforts to obtain the approval of the Superintendent in
accordance with Section 1307 for the payment by the Issuer of principal of and interest on the Securities on
the Scheduled Interest Payment Dates or Scheduled Maturity Date thereof, and, in the event any such approval
has not been obtained for any such payment at or prior to the Scheduled Interest Payment Date or Scheduled
Maturity Date thereof, as the case may be, to continue to use its best efforts to obtain such approval promptly
thereafter. Not less than 45 days prior to the Scheduled Interest Payment Date or Scheduled Maturity Date
thereof (excluding any such Scheduled Maturity Date that arises as a result of the obtaining of an order or the
granting of approval for the


                                                      12


rehabilitation, liquidation, conservation or dissolution of the Issuer), the Issuer will seek the approval of
the Superintendent to make each payment of principal of and interest on the Securities. In addition, the Issuer
shall notify or cause to be notified the Fiscal Agent no later than 5 Business Days (as defined herein), and
the Fiscal Agent will notify each holder, prior to the Scheduled Interest Payment Date for interest on or the
Scheduled Maturity Date for principal of any Security (excluding any such Scheduled Maturity Date which arises
as a result of the obtaining of an order or the granting of approval for the rehabilitation, liquidation,
conservation or dissolution of the Issuer) in the event that the Superintendent has not then approved the
making of any such payment on such Scheduled Interest Payment Date or such Scheduled Maturity Date, and
thereafter shall promptly notify the Fiscal Agent, and the Fiscal Agent will notify each holder, in the event
that the Issuer shall have failed to make any such payment on any such Scheduled Interest Payment Date or such
Scheduled Maturity Date. Without limiting the Issuer's obligations set forth in this paragraph, it is
understood that, to the extent authorized by the Issuer's Board of Directors, the Issuer may continue to
declare and pay dividends to its stockholders and to declare policyowner dividends and to make dividend
payments on its participating policies, in each case even though payments on the Securities may not have been
approved by the Superintendent, regardless of the effect any such declaration or payment may have on the
Superintendent's decision regarding payment of principal of, interest on or Redemption Amount with respect to
the Securities.

         9.    For so long as any of the Securities remain outstanding or any amounts remain unpaid on any of
the Securities, the Issuer may convert itself in any legal manner from a stock life insurance company into a
mutual life insurance company, merge or consolidate with or into any other corporation or sell, convey,
transfer or otherwise dispose of all or substantially all of its assets to any person, firm or corporation, if
(i) (A) in the case of a conversion, merger or consolidation, the Issuer is the surviving corporation or (B) in
the case of a conversion, merger or consolidation where the Issuer is not the surviving corporation and in the
case of any such sale, conveyance, transfer or other disposition, the successor corporation is a corporation
organized and existing under the laws of the United States or a State thereof and such corporation expressly
assumes by supplemental fiscal agency agreement all the obligations of the Issuer under the Securities and the
Fiscal Agency Agreement, (ii) at the time of any such conversion, merger or consolidation, or such sale,
conveyance, transfer or other disposition, the Issuer shall not have failed to make payment of principal of,
interest on or Redemption Amount with respect to the Securities after having received the Superintendent's
prior approval to make such payment and, in the case of any payment of the Redemption Amount, the Issuer has
given notice of redemption pursuant to Paragraph 4(a) hereof and (iii) the Issuer has delivered to the Fiscal
Agent an Officer's Certificate stating that such conversion, merger, consolidation, sale, conveyance, transfer
or other disposition complies with this paragraph and that all conditions precedent herein provided for
relating to such transaction have been complied with. In the event of the assumption by a successor corporation
of the obligations of the Issuer as provided in clause (i)(B) of the immediately preceding sentence, such
successor corporation shall succeed to and be substituted for the Issuer hereunder and under the Fiscal Agency
Agreement and all such obligations of the Issuer shall terminate.

         10.   No "employee benefit plan" within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") that is subject to Title I of ERISA, or "plan" within the meaning of
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), as to which the Issuer or any
of its affiliates is a "party in interest" within the meaning of Section 3(14) of ERISA or a "disqualified
person" within the meaning of Section 4975(e)(2) of the Code (each a "Plan"), and no person using the assets of
any such Plan, may acquire this Security, unless the acquisition and continued holding of the Security is
exempt under one or more of Prohibited Transaction Class Exemptions ("PTCE") 84-14, 90-1, 91-38, 95-60 or 96-23
issued by the United States Department of Labor ("DOL") or another applicable prohibited transaction exemption
issued by the DOL. The purchase by any person of


                                                      13


this Security shall constitute a representation by such person to the Issuer and the Fiscal Agent that such
person either (i) is not a Plan or a person using the assets of any Plan or (ii) is a Plan or is a person using
the assets of a Plan to purchase this Security and such Plan is (x) a "Qualified Institutional Buyer" as
defined in Section 144A of the Act and (y) may acquire and hold this Security under PTCE 84-14, 90-1, 91-38,
95-60 or 96-23 or another applicable prohibited transaction exemption issued by the DOL. The restrictions on
purchases (and continued holding) of the Securities set forth in this Paragraph 10 are in addition to those
otherwise set forth in Section 6 of the Fiscal Agency Agreement and under applicable law.

         11.   (a) The Issuer agrees, and each Security holder by accepting a Security agrees, that the
indebtedness evidenced by the Securities is subordinated in right of payment, to the extent and in the manner
provided in this Paragraph, to the prior payment in full of all Indebtedness, Policy Claims and Other Creditor
Claims (each as hereinafter defined), in accordance with Section 7435 of the New York Insurance law (together
with any successor provision, and as may be hereafter amended from time to time, "Section 7435").

         (b)   Upon any distribution to creditors of the Issuer in any rehabilitation, liquidation,
conservation, dissolution or reorganization proceeding relating to the Issuer or its property, the priority of
claims of Security holders shall be determined in accordance with Section 7435. In a proceeding commenced under
Article 74 of the New York Insurance Law, claims for principal of, interest on or Redemption Amount with
respect to the Securities constitute Class 7 claims under Section 7435, as currently in effect. If the
Superintendent approves a payment of principal of, interest on or Redemption Amount with respect to the
Securities in an amount that is less than the full amount of principal of, interest on and Redemption Amount
with respect to the Securities then scheduled to be paid in respect of the Securities, payment of such partial
amount shall be made pro rata among Security holders as their interests may appear.

         (c)   If a distribution is made to Security holders that, because of this Paragraph, should not have
been made to them, the Security holders who receive the distribution shall hold it in trust for holders of
Policy Claims, Indebtedness and Other Creditor Claims and pay it over to them as their interests may appear.

         (d)   The Issuer shall promptly notify the Fiscal Agent and the Paying Agent of any facts known to
the Issuer that would cause a payment of principal of, interest on or Redemption Amount with respect to the
Securities to violate this Paragraph.

         (e)   This Paragraph defines the relative rights of security holders, on the one hand, and holders of
any other claims, in accordance with Section 7435, on the other hand. Nothing in this Security or the Fiscal
Agency Agreement shall: (i) impair, as between the Issuer and security holders, the obligation of the Issuer
which is, subject to the Payment Restrictions, absolute and unconditional to pay principal of and interest on
the Securities in accordance with their terms; (ii) affect the relative rights of Security holders and
creditors of the Issuer, other than holders of Policy Claims, Indebtedness or Other Creditor Claims; or (iii)
prevent the Fiscal Agent or any Security holder from exercising any available remedies upon a breach by the
Issuer of its obligations hereunder, subject to the rights of holders of Policy Claims, Indebtedness or other
Creditor Claims to receive distributions otherwise payable to Securityholders.


                                                      14


         (f)   No right of any holder of Policy Claims, Indebtedness or Other Creditor claims to enforce the
subordination of the indebtedness evidenced by the Securities shall be impaired by any act or failure to act by
the Issuer or by its failure to comply with the terms of the Fiscal Agency Agreement.

         (g)   Each holder of Securities, by acceptance thereof, authorizes and directs the Fiscal Agent on
its behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in
this Paragraph and appoints the Fiscal Agent its attorney-in-fact for any and all such purposes.

         As used herein, "Indebtedness" of the Issuer shall mean (i) all existing or future indebtedness of
the Issuer for borrowed money, (ii) all existing or future indebtedness for borrowed money of other persons,
the payment of which is guaranteed by the Issuer, (iii) all existing or future obligations of the Issuer under
any agreement obligating the Issuer to cause another person to maintain a minimum level of net worth, or
otherwise to ensure the solvency of such person and (iv) any expense or any claim or amount, to the extent that
payment of principal of, interest on and Redemption Amount with respect to the Securities is required by law to
be subordinated to the prior payment thereof. Any indebtedness of the Issuer which by its express terms is
subordinated in right of payment to, or ranks equally with, the Securities shall not constitute Indebtedness.
However, under current law the Issuer cannot issue any indebtedness that by its terms is subordinate to the
Securities. In addition, any other surplus notes or similar obligations of the Issuer shall not constitute
Indebtedness and will rank pari passu with the Securities.

         As used herein, "Policy Claims" shall mean all existing or future claims of policyholders or
beneficiaries, as the case may be, under any and all existing or future policies, endorsements, riders and
other contracts of insurance, annuity contracts, including, without limitation, guaranteed investment
contracts, and funding agreements issued, assumed or renewed by the Issuer on or prior to the date hereof or
hereafter created, all claims under separate account agreements to the extent such claims are not fully
discharged by the assets held by the Issuer in the applicable separate accounts and all claims of The Life
Insurance Company Guarantee Corporation of New York or any other guaranty corporation or association of New
York or any other jurisdiction, other than claims described in clause (i) of the definition of "Other Creditor
Claims" below and claims for interest.

         As used herein, "Other Creditor Claims" shall mean all other claims that, pursuant to Section 7435,
have priority over claims with respect to the Securities. Under Section 7435 as currently in effect, such other
claims include: (i) claims with respect to the actual and necessary costs and expenses of administration
incurred by a liquidator, conservator, rehabilitator or ancillary rehabilitator under Section 7435; (ii) claims
with respect to the actual and necessary costs and expenses of administration incurred by The Life Insurance
Guaranty Corporation or The Life Insurance Company Guaranty Corporation of New York; (iii) claims of The Life
Insurance Company Guaranty Corporation for certain funds loaned to the Superintendent under Section 7713(d) of
the New York Insurance Law; (iv) debts up to $1,200 due to employees for services performed within one year of
the commencement of rehabilitation, liquidation, conservation, dissolution or reorganization proceedings; (v)
claims for payment for goods furnished or services rendered in the ordinary course of business within 90 days
of the


                                                      15


declaration of the impairment or insolvency of the Issuer; (vi) claims of the federal or any state or
local government (provided that claims for a penalty or forfeiture shall be included only to the extent of
pecuniary loss and reasonable costs occasioned by the act giving rise to the forfeiture or penalty); and (vii)
claims of general creditors and all other claims having priority under Section 7435.

         12.   For so long as any of the Securities remain outstanding or any amount remains unpaid on any of
the Securities, the Issuer shall, in accordance with Rule 144A, comply with the terms of the agreements set
forth in Section 8 of the Fiscal Agency Agreement. The provisions of Section 8 of the Fiscal Agency Agreement
are hereby incorporated mutatis mutandis herein.

         13.   In case this Security shall become mutilated, defaced, destroyed, lost or stolen, the Issuer
will execute and upon the Issuer's request the Fiscal Agent shall authenticate and deliver a new Security,
having a number not contemporaneously outstanding, of like tenor (including the same date of issuance) and
equal principal amount, registered in the same manner, dated the date of its authentication and bearing
interest from the date to which interest has been paid on this Security, in exchange and substitution for this
Security (upon surrender and cancellation thereof) or in lieu of and substitution for this Security. In the
case where this Security is destroyed, lost or stolen, the applicant for a substituted Security shall furnish
to the Issuer such security or indemnity as may be required by it to save each of it harmless, and, in every
case of destruction, loss or theft of this Security, the applicant shall also furnish to the Issuer
satisfactory evidence of the destruction, loss or theft of this Security and of the ownership thereof;
provided, however, that if the registered holder hereof is, in the judgment of the Issuer, an institution of
recognized responsibility, such holder's written agreement of indemnity shall be deemed to be satisfactory for
the issuance of a new Security in lieu of and substitution for this Security. The Fiscal Agent shall
authenticate any such substituted Security and deliver the same only upon written request or authorization of
the Issuer. Upon the issuance of any substituted Security, the Issuer may require the payment by the registered
holder thereof of a sum sufficient to cover fees and expenses connected therewith. In case this Security has
matured or is about to mature and shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer
may, subject to the Payment Restrictions, instead of issuing a substitute Security, pay or authorize the
payment of the same (without surrender thereof except if this Security is mutilated or defaced) upon compliance
by the registered holder with the provisions of this Paragraph 13 as hereinabove set forth.

            14. Section 11 of the Fiscal Agency Agreement, which Section is hereby incorporated mutatis
mutandis by reference herein, provides that, with certain exceptions as therein provided and with the consent
of the holders of a majority of the principal amount of the outstanding Securities present at a meeting duly
called pursuant thereto or by written consent of such percentage of the principal amount of all outstanding
Securities, the Issuer and the Fiscal Agent may, with the prior approval of the Superintendent, modify, amend
or supplement the Fiscal Agency Agreement or the terms of the Securities or may give consents or waivers or
take other actions with respect thereto. Any such modification, amendment, supplement, consent, waiver or other
action shall be conclusive and binding on the holder of this Security and on all future holders of this
Security and of any Security issued upon the registration of transfer hereof or in exchange heretofore or in
lieu hereof, whether or not notation thereof is made upon this


                                                      16


Security. The Fiscal Agency Agreement and the terms of the Securities may, with the prior approval of the
Superintendent, be modified or amended by the Issuer and the Fiscal Agent, without the consent of any holders
of Securities, for the purpose of (a) adding to the covenants of the Issuer for the benefit of the holders of
Securities, or (b) surrendering any right or power conferred upon the Issuer, or (c) securing the Securities
pursuant to the requirements hereof, thereof or otherwise, or (d) evidencing the succession of another
corporation to the Issuer and the assumption by such successor of the covenants and obligations of the Issuer
herein and in the Fiscal Agency Agreement as permitted by the Securities and the Fiscal Agency Agreement, or
(e) modifying the restrictions on, and procedures for, resale and other transfers of the Securities to the
extent required by any change in applicable law or regulation (or the interpretation thereof) or in practices
relating to the resale or transfer of restricted securities generally, or (f) accommodating the issuance, if
any, of Securities in book-entry or certificated form and matters related thereto which do not adversely affect
the interest of any Security holder in any material respect, or (g) curing any ambiguity or correcting or
supplementing any defective provision contained herein or in the Fiscal Agency Agreement in a manner which does
not adversely affect the interest of any Security holder in any material respect, or (h) effecting any
amendment which the Issuer and the Fiscal Agent may determine is necessary or desirable and which shall not
adversely affect the interest of any Security holder, to all of which each holder of any Security, by
acceptance thereof, consents.

         15.   Holders of Securities may enforce the Fiscal Agency Agreement or the Securities only in the
manner set forth below.

         (a)   In the event that any state or federal agency shall obtain an order or grant approval for the
rehabilitation, liquidation, conservation or dissolution of the Issuer, the Securities will upon the obtaining
of such an order or the granting of such approval immediately mature in full without any action on the part of
the Fiscal Agent or any holder of the Securities, with payment thereon being subject to the Payment
Restrictions, and any restrictions imposed as a consequence of, or pursuant to, such proceedings.
Notwithstanding any other provision of this Security or the Fiscal Agency Agreement, in no event shall the
Fiscal Agent or any holder of the Securities be entitled to declare the Securities to immediately mature or
otherwise be immediately payable.

         (b)   In the event that the Superintendent approves in whole or in part a payment of any principal
of, interest on or Redemption Amount with respect to any Securities and the Issuer fails to pay the full amount
of such approved payment on the date such amount is scheduled to be paid, such approved amount will be
immediately payable on such date without any action on the part of the Fiscal Agent or any holder of
Securities. In the event that the Issuer fails to perform any of its other obligations hereunder or under the
Fiscal Agency Agreement, each holder of the Securities may pursue any available remedy to enforce the
performance of any provision of such Securities or the Fiscal Agency Agreement; provided, however, that such
remedy shall in no event include the right to declare the Securities immediately payable, and shall in no
circumstances be inconsistent with the provisions of Section 1307. A delay or omission by any Security holder
in exercising any right or remedy accruing as a result of the Issuer's failure to perform its obligations
hereunder or under the Fiscal Agency Agreement and the continuation thereof shall not impair such right or
remedy or constitute a waiver of or


                                                      17


acquiescence in such non-performance by the Issuer. To the extent permitted by law, no remedy is exclusive of
any other remedy and all remedies are cumulative.

         (c)   Notwithstanding any other provision of this Security or the Fiscal Agency Agreement, the right
of any holder of Securities to receive payment of the principal of and interest on such holder's Securities on
or after the respective Scheduled Interest Payment Dates or Scheduled Maturity Date expressed in such
Securities, or to bring suit for the enforcement of any such payment on or after such respective Scheduled
Interest Payment Dates or Scheduled Maturity Date, in each case subject to such payment on such dates having
received the approval of the Superintendent pursuant to the Payment Restrictions, including the approval of the
Superintendent pursuant to Section 1307, is absolute and unconditional and shall not be impaired or affected
without the consent of the holder.

         16.   No reference herein to the Fiscal Agency Agreement and no provision of this Security or of the
Fiscal Agency Agreement shall alter or impair the obligation of the Issuer, subject to the Payment
Restrictions, to pay the principal of, interest on and Redemption Amount with respect to this Security at the
times, place and rate, and in the coin or currency, herein prescribed.

         17.   THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, UNITED STATES OF AMERICA, WITHOUT REFERENCE TO CONFLICTS OF LAWS PROVISIONS.


                                                      18


                                                                                                    EXHIBIT B-2

                                 FORM OF TEMPORARY REGULATION S GLOBAL SECURITY











                                                     B-2-1

                                 FORM OF REGULATION S TEMPORARY GLOBAL SECURITY

                  THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM AND IN ACCORDANCE WITH THE FISCAL AGENCY AGREEMENT, COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT
THE CORPORATE TRUST OFFICE OF THE FISCAL AGENT. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM SUCH REGISTRATION PROVIDED BY RULE 144A UNDER THE
ACT (TOGETHER WITH ANY SUCCESSOR PROVISION AND AS SUCH MAY BE HEREAFTER AMENDED FROM TIME TO TIME, "RULE
144A").

                  UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY ("DTC") TO PHOENIX LIFE INSURANCE COMPANY (THE "ISSUER") OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IN EXCHANGE FOR THIS SECURITY OR ANY PORTION HEREOF IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON OTHER THAN DTC OR A NOMINEE
THEREOF IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                  THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE FISCAL AGENCY AGREEMENT REFERRED
TO HEREINAFTER. THIS GLOBAL SECURITY MAY NOT BE EXCHANGED, IN WHOLE OR IN PART, FOR A SECURITY REGISTERED IN
THE NAME OF ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES SET FORTH IN
SECTION 5 OF THE FISCAL AGENCY AGREEMENT, AND MAY NOT BE TRANSFERRED, IN WHOLE OR IN PART, EXCEPT IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN SECTION 6(C) OF THE FISCAL AGENCY AGREEMENT.

                  THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS SECURITY MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN A MINIMUM PRINCIPAL AMOUNT OF $10,000 TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, AS DEFINED IN RULE 144A, IN A
TRANSACTION IN ACCORDANCE WITH RULE 144A, (2) IN A MINIMUM PRINCIPAL AMOUNT OF $10,000 IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE ACT (TOGETHER WITH ANY SUCCESSOR
PROVISION THERETO, AND AS MAY BE HEREAFTER AMENDED FROM TIME TO TIME, "REGULATION S"), (3) PURSUANT TO AN
EXEMPTION FROM




REGISTRATION PROVIDED BY RULE 144 (OR ANY SUCCESSOR PROVISION THERETO, AND AS MAY BE HEREAFTER AMENDED FROM
TIME TO TIME) UNDER THE ACT (IF AVAILABLE), (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
OR (5) SUBJECT TO THE PRIOR APPROVAL OF THE SUPERINTENDENT (AS HEREINAFTER DEFINED) TO THE ISSUER OR ANY
AFFILIATE OF THE ISSUER (WITHIN THE MEANING OF THE ACT), IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES, AND (B) THAT THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESTRICTIONS REFERRED TO IN (A) ABOVE.

                  ALL PAYMENTS OF PRINCIPAL (INCLUDING ANY PAYMENT OF A REDEMPTION AMOUNT, AS HEREINAFTER
DEFINED) AND INTEREST ON THIS SECURITY MAY ONLY BE MADE OUT OF THE ISSUER'S FREE AND DIVISIBLE SURPLUS AND WITH
THE PRIOR APPROVAL OF THE SUPERINTENDENT OF INSURANCE OF THE STATE OF NEW YORK (THE "SUPERINTENDENT"), IN
ACCORDANCE WITH SECTION 1307 OF THE NEW YORK INSURANCE LAW (TOGETHER WITH ANY SUCCESSOR PROVISION, AND AS MAY
BE HEREAFTER AMENDED FROM TIME TO TIME, "SECTION 1307"). THERE ARE NO GUIDELINES OR INTERPRETATIONS AS TO THE
EXTENT OF THE SUPERINTENDENT'S DISCRETION UNDER SECTION 1307 IN DETERMINING WHETHER THE FINANCIAL CONDITION OF
THE ISSUER WARRANTS THE MAKING OF SUCH PAYMENTS.

                  BY ITS ACCEPTANCE OF THE NOTES, EACH HOLDER OF THE NOTES SHALL BE DEEMED TO HAVE REPRESENTED
TO THE ISSUER THAT (A) SUCH HOLDER IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S) AND IS NOT PURCHASING THE
NOTES IN THE UNITED STATES OF AMERICA, ITS TERRITORIES, ITS POSSESSIONS AND OTHER AREAS SUBJECT TO ITS
JURISDICTION (THE "UNITED STATES"); AND (B) IT IS ITS INTENT AND IT UNDERSTANDS IT IS THE INTENT OF THE ISSUER,
FOR PURPOSES OF UNITED STATES FEDERAL, STATE AND LOCAL INCOME TAXES THAT THE NOTES BE TREATED AS INDEBTEDNESS
OF THE ISSUER, AGREES TO SUCH TREATMENT AND AGREES TO TAKE NO ACTION INCONSISTENT WITH SUCH TREATMENT.

                  THE RIGHTS ATTACHING TO THIS TEMPORARY GLOBAL SECURITY, AND THE CONDITIONS AND PROCEDURES
GOVERNING ITS EXCHANGE FOR A PERMANENT GLOBAL SECURITY OR DEFINITIVE SECURITIES, ARE AS SPECIFIED IN THE FISCAL
AGENCY AGREEMENT.


                                                       2



                                         PHOENIX LIFE INSURANCE COMPANY

                                   7.15% Surplus Notes scheduled to mature on
                                               December 15, 2034

CUSIP No.:  U71885 AA2
ISIN No.:   USU71885AA28                                                                               $_____

                  PHOENIX LIFE INSURANCE COMPANY, a stock life insurance company organized under the laws of
the State of New York (herein called the "Issuer"), for value received, hereby promises to pay, subject to the
approval of the Superintendent pursuant to Section 1307, to Cede & Co., or registered assigns, the principal
sum of _____ United States dollars ($_________) or such other amount (not to exceed one hundred seventy five
million dollars ($175,000,000) when taken together with all of the Issuer's 7.15% Surplus Notes scheduled to
mature on December 15, 2034 issued and outstanding in definitive certificated form or in the form of another
Global Security) as may from time to time represent the principal amount of the Issuer's 7.15% Surplus Notes
scheduled to mature on December 15, 2034 in respect of which beneficial interests are held through the
Depositary in the form of a Global Security, on December 15, 2034 (the "Scheduled Maturity Date"), and to pay
interest thereon, subject to the approval of the Superintendent pursuant to Section 1307, from December 15,
2004 or from the most recent Scheduled Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on June 15 and December 15 in each year, commencing June 15, 2005 (each a
"Scheduled Interest Payment Date"), at the rate of 7.15% per annum, until the principal hereof is paid or duly
provided for. This Security is subject to redemption prior to the Scheduled Maturity Date as specified in
paragraph 4 hereof. The date upon which any state or federal agency obtains an order or grants approval for the
rehabilitation, liquidation, conservation or dissolution of the Issuer shall also be deemed to be the Scheduled
Maturity Date. As specified on the reverse hereof, all payments of principal of, interest on or Redemption
Amount (as hereinafter defined) with respect to this Security may be made only out of the Issuer's free and
divisible surplus and only with the prior approval of the Superintendent pursuant to Section 1307. The interest
so payable, and punctually paid or duly provided for, on any Scheduled Interest Payment Date shall be paid, in
accordance with the terms of the Fiscal Agency Agreement hereinafter referred to, to the person (the
"registered holder") in whose name this Security (or one or more predecessor Securities) is registered at the
close of business on June 1 or December 1 (whether or not a Business Day (as defined on the reverse hereof)),
as the case may be (each a "Regular Record Date"), next preceding such Scheduled Interest Payment Date.
Interest on the Securities shall be calculated on the basis of a 360-day year of twelve 30-day months. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered
holder on such Regular Record Date and shall be paid to the person in whose name this Security (or one or more
predecessor Securities) is registered at the close of business on a special record date for the payment of such
interest to be fixed by the Issuer, notice whereof shall be given to registered holders of the Securities not
less than 15 days prior to such special record date.

                  Principal of and Redemption Amount with respect to this Security shall be payable against
surrender hereof at the corporate trust office of the Fiscal Agent hereinafter referred to and at the offices
of such other Paying Agents as the Issuer shall have appointed


                                                       3



pursuant to the Fiscal Agency Agreement. Payments of principal of and Redemption Amount with respect to the
Securities shall be made only against surrender of the Securities. Payments of interest on this Security may be
made, in accordance with the foregoing and subject to applicable laws and regulations, by check mailed on or
before the Scheduled Interest Payment Date of such payment to the person entitled thereto at such person's
address appearing on the aforementioned register. Any permitted payment of principal of and Redemption Amount
with respect to this Security may be made by check. Notwithstanding the foregoing, permitted payments of
principal of, any interest on or Redemption Amount with respect to this Security shall be made, in the case of
a registered holder of at least $5,000,000 aggregate principal amount of Securities, by wire transfer to an
account maintained by the payee with a bank in the United States if such registered holder so elects by giving
notice to the Fiscal Agent, not less than 15 days (or such fewer days as the Fiscal Agent may accept at its
discretion) prior to the applicable Scheduled Maturity Date or Scheduled Interest Payment Date hereof, of such
election and of the account to which payment is to be made. Unless such designation is revoked, any such
designation made by such holder with respect to such Securities shall remain in effect with respect to any
future payments with respect to such Securities payable to such holder. The Issuer agrees that until this
Security has been delivered to the Fiscal Agent for cancellation, or monies sufficient to pay the full
principal of and interest remaining unpaid on this Security have been made available for payment and either
paid or returned to the Issuer as provided herein, it will at all times maintain offices or agencies in the
Borough of Manhattan, The City of New York for the payment of the principal of, interest on and Redemption
Amount with respect to the Securities as herein provided.

                  Reference is hereby made to the further provisions of this Security set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

                  This Security may be executed by the Issuer by manual or facsimile signatures, and such
signatures may be executed on separate counterparts.

                  Unless the certificate of authentication hereon has been executed by the Fiscal Agent by
manual signature, this Security shall not be valid or obligatory for any purpose.


                                                       4


IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.

Dated:

                                                     PHOENIX LIFE INSURANCE COMPANY

                                                     By: ______________________________________________
                                                           Name:
                                                           Title:



                                                     By: ______________________________________________
                                                           Name:
                                                           Title:



                  This is one of the Securities referred to in the within-mentioned Fiscal Agency Agreement.

                                                     THE BANK OF NEW YORK
                                                     as Fiscal Agent

                                                     By: ______________________________________________
                                                                      Authorized Signatory


                                                       5



                                                FORM OF REVERSE

                  1. This Security is one of a duly authorized issue of 7.15% Surplus Notes scheduled to mature
on December 15, 2034 of the Issuer (herein called the "Securities" or "Notes"), limited in aggregate principal
amount to $175,000,000. The Issuer and The Bank of New York (as "Fiscal Agent") have entered into a Fiscal
Agency Agreement, dated as of December 15, 2004 (such instrument, as it may be duly amended from time to time,
is herein called the "Fiscal Agency Agreement"), which provides for the mechanism for issuing the Securities
and, inter alia, sets forth certain duties of the Fiscal Agent in connection therewith. As used herein, the
term "Fiscal Agent" includes any successor fiscal agent under the Fiscal Agency Agreement. Copies of the Fiscal
Agency Agreement are on file and available for inspection at the corporate trust office of the Fiscal Agent in
the Borough of Manhattan, The City of New York. Holders of Securities are referred to the Fiscal Agency
Agreement for a statement of the terms thereof, including those relating to transfer, payment, exchanges and
certain other matters to all of which terms the Securities are subject. The Fiscal Agent or any Paying Agent
shall also act as Transfer Agent and Securities registrar. Terms used herein which are defined in the Fiscal
Agency Agreement but not otherwise defined herein shall have the meanings assigned to such terms in the Fiscal
Agency Agreement.

                  The Securities are direct and unsecured obligations of the Issuer and, subject to the payment
restrictions contained in Paragraphs 5 and 11 hereof (the "Payment Restrictions"), are scheduled to mature on
December 15, 2034. Section 1307 provides that the Securities are not part of the legal liabilities of the
Issuer and are not a basis of any set-off against the Issuer.

                  The date upon which any state or federal agency obtains an order or grants approval for the
rehabilitation, liquidation, conservation or dissolution of the Issuer shall also be deemed to be the Scheduled
Maturity Date.

                  2. The Securities are issuable only in fully registered form without coupons. The Securities
and beneficial interests in Global Securities shall be issuable: (i) in the case of Securities offered and sold
to the Initial Purchasers and subsequently transferred in reliance on Rule 144A, in minimum denominations of
$10,000 and any amount in excess thereof that is an integral multiple of $1,000; (ii) in the case of Securities
offered and sold to the Initial Purchasers and subsequently transferred in reliance on Regulation S, in minimum
denominations of $10,000 and any amount in excess thereof that is an integral multiple of $1,000; and (iii) in
the case of Securities offered and sold to the Initial Purchasers and subsequently transferred to Accredited
Investors, in minimum denominations of $100,000 and any amount in excess thereof that is an integral multiple
of $1,000.

                  3. The Issuer shall maintain, in the Borough of Manhattan, The City of New York, a Transfer
Agent where Securities may be registered or surrendered for registration of transfer or exchange. The Issuer
has initially appointed the corporate trust office of the Fiscal Agent as its Transfer Agent in the Borough of
Manhattan, The City of New York. The Issuer shall cause each Transfer Agent to act as a Securities registrar
and shall cause to be kept at the office of each Transfer Agent a register in which, subject to such reasonable
regulations as it may prescribe, the Issuer shall provide for the registration of Securities and registration
of transfers of Securities. The Issuer reserves the right to vary or terminate the appointment of any


                                                       6


Transfer Agent or to appoint additional or other Transfer Agents or to approve any change in the office through
which any Transfer Agent acts; provided, that there shall at all times be a Transfer Agent in the Borough of
Manhattan, The City of New York. The Issuer shall cause notice of any resignation, termination or appointment
of the Fiscal Agent or any Paying Agent or Transfer Agent and of any change in the office through which any
such Agent shall act to be provided to holders of Securities.

                  Subject to the restrictions set forth herein and in the Fiscal Agency Agreement, the transfer
of a Security is registrable on the aforementioned register upon surrender of such Security at any Transfer
Agent duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer
duly executed by, the registered holder thereof or his attorney duly authorized in writing. Upon such surrender
of this Security for registration of transfer, the Issuer shall execute, and the Fiscal Agent shall
authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities,
dated the date of authentication thereof, of any authorized denominations and of a like aggregate principal
amount.

                  Subject to the restrictions set forth herein and in the Fiscal Agency Agreement, at the
option of the registered holder upon request confirmed in writing, Securities may be exchanged for Securities
of any authorized denominations and aggregate principal amount upon surrender of the Securities to be exchanged
at the office of any Transfer Agent. This Security will be exchanged in whole for a Regulation S Global
Security promptly following the expiration of the Distribution Compliance Period. Simultaneously with the
authentication of the Regulation S Global Security, the Fiscal Agent shall cancel this Security. Whenever any
Securities are so surrendered for exchange, the Issuer shall execute, and the Fiscal Agent shall authenticate
and deliver, the Securities which the registered holder making the exchange is entitled to receive. Any
registration of transfer or exchange shall be effected upon the Issuer being satisfied with the documents of
title and identity of the person making the request and subject to the restrictions set forth in the
immediately following paragraph and such reasonable regulations as the Issuer may from time to time agree with
the Fiscal Agent.

                  All Securities issued upon any registration of transfer or exchange of Securities shall be
the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits, as the
Securities surrendered upon such registration of transfer or exchange. No service charge shall be made for any
registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith and any other amounts, if any, required to be paid
by the provisions of the Securities in connection with a transfer or exchange thereof.

                  Prior to due presentment of this Security for registration of transfer, the Issuer, the
Fiscal Agent and any agent of the Issuer or the Fiscal Agent may treat the person in whose name this Security
is registered as the absolute owner hereof for all purposes, whether or not this Security be overdue, and
neither the Issuer nor the Fiscal Agent nor any such agent shall be affected by notice to the contrary.

                  4. (a) Subject to the Payment Restrictions, including the prior approval of the
Superintendent pursuant to Section 1307, the Securities are subject to redemption, as a whole or


                                                       7



in part, at the option of the Issuer at any time and from time to time, at a redemption price equal to the
greater of (i) 100% of the principal amount of the Securities to be redeemed and (ii) as determined by the
Quotation Agent (as defined below), the sum of the present values of the remaining scheduled payments of
principal and interest on the Securities to be redeemed (not including any portion of such payments of interest
accrued to the date of redemption) discounted to the date of redemption on a semi-annual basis, assuming a
360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate (as defined below), plus 35
basis points (the greater of (i) and (ii), the "Redemption Amount"), plus, in either case (i) or (ii), accrued
interest on the Securities to be redeemed to, but not including, the date of redemption.

                  (i) "Adjusted Treasury Rate" means, with respect to any redemption date, the rate per annum
equal to the semi-annual equivalent yield to maturity, as determined by the Quotation Agent, of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for that redemption date.

                  (ii) "Comparable Treasury Issue" means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the Securities to be redeemed that
would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term of such Securities.

                  (iii) "Comparable Treasury Price" means, with respect to any redemption date, (i) the average
of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of
these Reference Treasury Dealer Quotations, or (ii) if the Issuer obtains fewer than three Reference Treasury
Dealer Quotations, the average of all such Quotations, in either case (i) or (ii) as determined by the Issuer.

                  (iv) "Quotation Agent" means Goldman, Sachs&Co. (or its successor) or any successor
Quotation Agent appointed by the Issuer from time to time.

                  (v) "Reference Treasury Dealer" means: (i) Goldman, Sachs&Co. (or its successor) and one or
more other Primary Treasury Dealers (as defined in this paragraph) appointed by the Issuer; provided, however,
that if Goldman, Sachs&Co. (or its successor) or any other selected Primary Treasury Dealer shall cease to be
a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Issuer shall
substitute therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by the
Issuer.

                  (vi) "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Issuer, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to
the Issuer by that Reference Treasury Dealer at 5:00 p.m. on the third Business Day before that redemption
date.

                  (b) Notice of any redemption pursuant to paragraph 4(a) hereof will be given to holders of
the Securities as set forth below. Any determination that is contemplated in


                                                       8


paragraph 4(a) hereof to be made by the Quotation Agent or the Issuer may be made by such person in its sole
discretion and, when made by such person, shall be final and binding on the Issuer, holders of the Securities
and all other persons absent manifest error. Interest installments due on this Security on or prior to a
redemption date will be payable to the holder of this Security of record at the close of business on the
relevant record date, all as provided in the Fiscal Agency Agreement.

                  (c) In the case of any partial redemption of the Securities, the Securities to be redeemed
shall be selected by the Fiscal Agent not less than 30 days prior to the date of such redemption, from the
outstanding Securities not previously called for redemption, by such method as the Fiscal Agent shall deem fair
and appropriate and which may provide for the selection for redemption of portions (equal to $1,000 or a
multiple thereof) of the principal of Securities of denomination larger than $1,000; provided, that if at the
time of redemption such Securities are registered as a Global Security, the Depositary for such Global Security
shall determine, in accordance with its procedures, the principal amount of such Securities to be redeemed held
by each holder of a beneficial interest in such Global Security. The Fiscal Agent shall notify the Issuer
promptly of the Securities or portion thereof to be redeemed.

                  (d) Notices to redeem Securities shall be given to holders of Securities in writing mailed,
first-class postage prepaid, to each holder of registered Securities, or portions thereof, so to be redeemed,
at his address as it appears in the securities register. Such notice will be given once not more than 60 days
nor less than 30 days prior to the date fixed for redemption. If by reason of the suspension of regular mail
service, or by reason of any other cause, it shall be impracticable to give notice to the holders of Securities
in the manner prescribed herein, then such notification in lieu thereof as shall be made by the Issuer or by
the Fiscal Agent on behalf of and at the instruction of the Issuer shall constitute sufficient provision of
such notice, if such notification shall, so far as may be practicable, approximate the terms and conditions of
the mailed notice in lieu of which it is given. Neither the failure to give notice nor any defect in any notice
given to any particular holder of a Note shall affect the sufficiency of any notice with respect to other
Securities. Notices to redeem Securities shall specify the date fixed for redemption, the Redemption Amount,
the place or places of payment, that payment will be made upon presentation and surrender of the Securities to
be redeemed (or portion thereof in the case of a partial redemption), that interest accrued to the date fixed
for redemption (unless the date of redemption is a Scheduled Interest Payment Date) will be paid as specified
in said notice, and that on and after said date interest thereon will cease to accrue if the Securities are so
redeemed. In addition, in the case of a partial redemption, such notice shall specify the Securities called for
redemption and the aggregate principal amount of the Securities to remain outstanding after the redemption.

                  (e) If notice of redemption has been given in the manner set forth in paragraph 4(d) hereof,
the Securities so to be redeemed shall be payable in full on the date specified in such notice and upon
presentation and surrender of the Securities at the place or places specified in such notice, the Securities
shall be paid and redeemed by the Issuer at the places and in the manner and currency herein specified and at
the Redemption Amount together with accrued interest (unless the redemption date is a Scheduled Interest
Payment Date) to, but not including, the redemption date. From and after the redemption date, if monies for the
redemption of Securities called for redemption shall have been made available at the Corporate


                                                       9


Trust Office of the Fiscal Agent for redemption on the redemption date, the Securities called for redemption
shall cease to bear interest, and the only right of the holders with respect to such Securities or portion
thereof being redeemed shall be to receive payment of the Redemption Amount together with accrued interest
(unless the redemption date is a Scheduled Interest Payment Date) to the redemption date as aforesaid. If
monies for the redemption of the Securities are not made available for payment until after the redemption date,
the Securities called for redemption shall not cease to bear interest until such monies have been so made
available.

                  (f) Any Security that is to be redeemed only in part shall be surrendered with, if the Issuer
or the Fiscal Agent so requires, due endorsement by, or a written instrument of transfer in form satisfactory
to the Issuer and the Fiscal Agent duly executed by, the holder thereof or his attorney duly authorized in
writing, and the Issuer shall execute, and the Fiscal Agent shall authenticate and deliver to the holder of
such Security without service charge, a new registered Security or Securities, of any authorized denomination
as requested by such holder, and as permitted by Section 1(d) of the Fiscal Agency Agreement, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so
surrendered.

                  5. (a) Notwithstanding anything to the contrary set forth herein or in the Fiscal Agency
Agreement, any payment of principal of, interest on or Redemption Amount or any other monies owing with respect
to this Security, whether at the Scheduled Interest Payment Date or Scheduled Maturity Date specified herein,
on the redemption date or otherwise, may be made only (i) out of the free and divisible surplus of the Issuer
which the Superintendent determines to be available for such payments under Section 1307 and (ii) with the
prior approval of the Superintendent whenever, in his judgment, the financial condition of the Issuer warrants
such payment, in accordance with Section 1307. If the Superintendent does not approve the making of any payment
of principal of or interest on this Security on the Scheduled Interest Payment Date or Scheduled Maturity Date
thereof, as specified herein, the Scheduled Interest Payment Date or Scheduled Maturity Date, as the case may
be, shall be extended and such payment shall be made by the Issuer on the next following Business Day on which
the Issuer shall have the approval of the Superintendent to make such payment. Interest will continue to accrue
on any such unpaid principal through the actual date of payment at the rate of interest stated on the face
hereof. Interest will not accrue on interest with respect to which the Scheduled Interest Payment Date has been
extended, during the period of such extension. If the Superintendent approves a payment of principal of or
interest on the Securities in an amount that is less than the full amount of principal of and interest on the
Securities then scheduled to be paid in respect of the Securities, payment of such partial amount shall be made
pro rata among Security holders as their interests may appear.

                  (b) Any payment of principal of or interest on any Security as to which the approval of the
Superintendent has been obtained and which is not punctually paid or duly provided for on the Scheduled
Interest Payment Date or Scheduled Maturity Date thereof, as set forth herein (such payment being referred to
as an "Unpaid Amount"), will forthwith cease to be payable to the registered owner of this Security on the
relevant record date designated herein, and such Unpaid Amount will instead be payable to the registered owner
of this Security on a subsequent special record date. The Issuer shall fix the special record date and payment
date for


                                                      10


the payment of any Unpaid Amount. At least 15 days before the special record date, the Issuer shall mail to
each holder of the Securities and the Fiscal Agent a notice that states the special record date, payment date
and amount of interest or principal to be paid. On the payment date set forth in such notice, the Paying Agent
shall pay the amount of interest or principal to be so paid to each holder of the Securities in the manner set
forth in Section 4(a) of the Fiscal Agency Agreement.

                  6. (a) For so long as the Fiscal Agent is acting as a Paying Agent hereunder, the Issuer
shall provide, subject to the Payment Restrictions, to the Fiscal Agent in immediately available funds on or
prior to 10:00 a.m., New York time, of each date on which a payment of principal of, interest on or Redemption
Amount with respect to this Security is payable, as set forth herein, such amounts as are necessary (with any
amounts then held by the Fiscal Agent and available for the purpose) to make such payment, and the Issuer
hereby authorizes and directs the Fiscal Agent from funds so provided to it to make or cause to be made payment
of the principal of, interest on and Redemption Amount with respect to, as the case may be, on this Security as
set forth herein and in the Fiscal Agency Agreement. Payments of interest on this Security may be made, in
accordance with the foregoing and subject to applicable laws and regulations, by check mailed on or before the
Scheduled Interest Payment Date of such payment to the person entitled thereto at such person's address
appearing on the aforementioned register. Any permitted payment of principal of this Security may be made by
check. Notwithstanding the foregoing, permitted payments of principal of, interest on or Redemption Amount with
respect to this Security may be made, in the case of a registered holder of at least $5,000,000 aggregate
principal amount of Securities, by wire transfer to an account maintained by the payee with a bank in the
United States if such registered holder so elects by giving notice to the Fiscal Agent, not less than 15 days
(or such fewer days as the Fiscal Agent may accept at its discretion) prior to the date on which such payment
is scheduled to be made, of such election and of the account to which payments are to be made. Unless such
designation is revoked, any such designation made by such holder with respect to such Securities shall remain
in effect with respect to any future payments with respect to such Securities payable to such holder. The
Issuer shall pay any reasonable administrative costs in connection with making any such payments. The Fiscal
Agent shall arrange directly with any other Paying Agent who may have been appointed by the Issuer pursuant to
the provisions of Section 2 of the Fiscal Agency Agreement for the payment from funds so paid by the Issuer of
the principal of , interest on and Redemption Amount with respect to this Security. Any monies held by the
Fiscal Agent for the payment of the principal of, interest on or Redemption Amount with respect to any of the
Securities remaining unclaimed for two years after such principal, interest or Redemption Amount has become
payable in accordance with the Payment Restrictions (whether at the Scheduled Maturity Date or otherwise) and
monies sufficient therefor shall have been duly made available for payment shall, together with any interest
made available for payment thereon, be repaid to the Issuer upon written request and upon such repayment all
liability of the Fiscal Agent with respect thereto shall cease, without, however, limiting in any way any
obligation the Issuer may have to pay the principal of, interest on and Redemption Amount with respect to this
Security, subject to the Payment Restrictions.

                  (b) In any case where the Scheduled Interest Payment Date, Scheduled Maturity Date or
redemption date of any Security shall be at any place of payment a day on which banking institutions are not
carrying out transactions in U.S. dollars or are authorized or


                                                      11


obligated by law or executive order to close, then payment of principal of, interest on or Redemption Amount
with respect to any Security need not be made on such date at such place but may be made on the next succeeding
day at such place which is not a day on which banking institutions in the applicable jurisdiction are generally
authorized or obligated by law or executive order to close (a "Business Day"), with the same force and effect
as if made on the Scheduled Interest Payment Date, Scheduled Maturity Date or redemption date thereof, and no
interest shall accrue for the period of such delay.

                  7. The Issuer shall pay all stamp and other duties, if any, which may be imposed by the
United States of America or any governmental entity or any political subdivision thereof or taxing authority of
or in the foregoing with respect to the Fiscal Agency Agreement or the initial issuance of this Security.
Except as otherwise specifically provided in this Security, the Issuer shall not be required to make any
payment with respect to any tax, duty, assessment or other governmental charge of whatever nature imposed or
levied by any government or any political subdivision or taxing authority thereof or therein.

                  8. For so long as any of the Securities remain outstanding or any amount remains unpaid on
any of the Securities:

                  (a) Except with respect to transactions covered by Paragraph 9 hereof, the Issuer will do or
cause to be done all things necessary to preserve and keep in full force and effect its corporate existence,
material rights (charter and statutory) and franchise; provided, however, that the Issuer shall not be required
to preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Issuer and that the Issuer has used its best
efforts to not disadvantage in any material respect the holders of the Securities, or that not preserving such
right or franchise is in the best interest of the policyholders of the Issuer having considered the interests
of the holders of the Securities.

                  (b) The Issuer will not be or become an open-end investment company, unit investment trust or
face amount certificate company that is or is required to be registered under Section 8 of the Investment
Company Act of 1940, as amended (the "Investment Company Act"), if such action would cause the Issuer to be in
violation of the Investment Company Act at any time prior to payment in full of the Securities.

                  (c) The Issuer shall use its best efforts to obtain the approval of the Superintendent in
accordance with Section 1307 for the payment by the Issuer of principal of and interest on the Securities on
the Scheduled Interest Payment Dates or Scheduled Maturity Date thereof, and, in the event any such approval
has not been obtained for any such payment at or prior to the Scheduled Interest Payment Date or Scheduled
Maturity Date thereof, as the case may be, to continue to use its best efforts to obtain such approval promptly
thereafter. Not less than 45 days prior to the Scheduled Interest Payment Date or Scheduled Maturity Date
thereof (excluding any such Scheduled Maturity Date that arises as a result of the obtaining of an order or the
granting of approval for the rehabilitation, liquidation, conservation or dissolution of the Issuer), the
Issuer will seek the approval of the Superintendent to make each payment of principal of and interest on the
Securities. In addition, the Issuer shall notify or cause to be notified the Fiscal Agent no later than 5
Business Days (as defined herein), and the Fiscal Agent


                                                      12


will notify each holder, prior to the Scheduled Interest Payment Date for interest on or the Scheduled Maturity
Date for principal of any Security (excluding any such Scheduled Maturity Date which arises as a result of the
obtaining of an order or the granting of approval for the rehabilitation, liquidation, conservation or
dissolution of the Issuer) in the event that the Superintendent has not then approved the making of any such
payment on such Scheduled Interest Payment Date or such Scheduled Maturity Date, and thereafter shall promptly
notify the Fiscal Agent, and the Fiscal Agent will notify each holder, in the event that the Issuer shall have
failed to make any such payment on any such Scheduled Interest Payment Date or such Scheduled Maturity Date.
Without limiting the Issuer's obligations set forth in this paragraph, it is understood that, to the extent
authorized by the Issuer's Board of Directors, the Issuer may continue to declare and pay dividends to its
stockholders and to declare policyowner dividends and to make dividend payments on its participating policies,
in each case, even though payments on the Securities may not have been approved by the Superintendent,
regardless of the effect any such declaration or payment may have on the Superintendent's decision regarding
payment of principal of, interest on or Redemption Amount with respect to the Securities.

                  9. For so long as any of the Securities remain outstanding or any amounts remain unpaid on
any of the Securities, the Issuer may convert itself in any legal manner from a stock life insurance company
into a mutual life insurance company, merge or consolidate with or into any other corporation or sell, convey,
transfer or otherwise dispose of all or substantially all of its assets to any person, firm or corporation, if
(i) (A) in the case of a conversion, merger or consolidation, the Issuer is the surviving corporation or (B) in
the case of a conversion, merger or consolidation where the Issuer is not the surviving corporation and in the
case of any such sale, conveyance, transfer or other disposition, the successor corporation is a corporation
organized and existing under the laws of the United States or a State thereof and such corporation expressly
assumes by supplemental fiscal agency agreement all the obligations of the Issuer under the Securities and the
Fiscal Agency Agreement, (ii) at the time of any such conversion, merger or consolidation, or such sale,
conveyance, transfer or other disposition, the Issuer shall not have failed to make payment of principal of,
interest on or Redemption Amount with respect to the Securities after having received the Superintendent's
prior approval to make such payment and, in the case of any payment of the Redemption Amount, the Issuer has
given notice of redemption pursuant to paragraph 4(a) hereof and (iii) the Issuer has delivered to the Fiscal
Agent an Officer's Certificate stating that such conversion, merger, consolidation, sale, conveyance, transfer
or other disposition complies with this paragraph and that all conditions precedent herein provided for
relating to such transaction have been complied with. In the event of the assumption by a successor corporation
of the obligations of the Issuer as provided in clause (i)(B) of the immediately preceding sentence, such
successor corporation shall succeed to and be substituted for the Issuer hereunder and under the Fiscal Agency
Agreement and all such obligations of the Issuer shall terminate.

                  10. No "employee benefit plan" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") that is subject to Title I of ERISA, or "plan" within the
meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), as to which the
Issuer or any of its affiliates is a "party in interest" within the meaning of Section 3(14) of ERISA or a
"disqualified person" within the meaning of Section 4975(e)(2) of the Code (each a "Plan"), and no person using
the assets of any such Plan, may acquire this Security, unless the acquisition and continued holding of the
Security


                                                      13

is exempt under one or more of Prohibited Transaction Class Exemptions ("PTCE") 84-14, 90-1, 91-38, 95-60 or
96-23 issued by the United States Department of Labor ("DOL") or another applicable prohibited transaction
exemption issued by the DOL. The purchase by any person of this Security shall constitute a representation by
such person to the Issuer and the Fiscal Agent that such person either (i) is not a Plan or a person using the
assets of any Plan or (ii) is a Plan or is a person using the assets of a Plan to purchase this Security and
such Plan is (x) a "Qualified Institutional Buyer" as defined in Section 144A of the Act and (y) may acquire
and hold this Security under PTCE 84-14, 90-1, 91-38, 95-60 or 96-23 or another applicable prohibited
transaction exemption issued by the DOL. The restrictions on purchases (and continued holding) of the
Securities set forth in this Paragraph 10 are in addition to those otherwise set forth in Section 6 of the
Fiscal Agency Agreement and under applicable law.

                  11. (a) The Issuer agrees, and each Security holder by accepting a Security agrees, that the
indebtedness evidenced by the Securities is subordinated in right of payment, to the extent and in the manner
provided in this Paragraph, to the prior payment in full of all Indebtedness, Policy Claims and Other Creditor
Claims (each as hereinafter defined), in accordance with Section 7435 of the New York Insurance law (together
with any successor provision, and as may be hereafter amended from time to time, "Section 7435").

                  (b) Upon any distribution to creditors of the Issuer in any rehabilitation, liquidation,
conservation, dissolution or reorganization proceeding relating to the Issuer or its property, the priority of
claims of Security holders shall be determined in accordance with Section 7435. In a proceeding commenced under
Article 74 of the New York Insurance Law, claims for principal of, interest on or Redemption Amount with
respect to the Securities constitute Class 7 claims under Section 7435, as currently in effect. If the
Superintendent approves a payment of principal of, interest on or Redemption Amount with respect to the
Securities in an amount that is less than the full amount of principal of, interest on and Redemption Amount
with respect to the Securities then scheduled to be paid in respect of the Securities, payment of such partial
amount shall be made pro rata among Security holders as their interests may appear.

                  (c) If a distribution is made to Security holders that, because of this Paragraph, should not
have been made to them, the Security holders who receive the distribution shall hold it in trust for holders of
Policy Claims, Indebtedness and Other Creditor Claims and pay it over to them as their interests may appear.

                  (d) The Issuer shall promptly notify the Fiscal Agent and the Paying Agent of any facts known
to the Issuer that would cause a payment of principal of, interest on or Redemption Amount with respect to the
Securities to violate this Paragraph.

                  (e) This Paragraph defines the relative rights of security holders, on the one hand, and
holders of any other claims, in accordance with Section 7435, on the other hand. Nothing in this Security or
the Fiscal Agency Agreement shall: (i) impair, as between the Issuer and security holders, the obligation of
the Issuer which is, subject to the Payment Restrictions, absolute and unconditional to pay principal of and
interest on the Securities in accordance with their terms; (ii) affect the relative rights of Security holders
and creditors of the Issuer, other than holders of Policy Claims, Indebtedness or Other Creditor Claims; or
(iii) prevent the Fiscal


                                                      14


Agent or any Security holder from exercising any available remedies upon a breach by the Issuer of its
obligations hereunder, subject to the rights of holders of Policy Claims, Indebtedness or other Creditor Claims
to receive distributions otherwise payable to Securityholders.

                  (f) No right of any holder of Policy Claims, Indebtedness or Other Creditor claims to enforce
the subordination of the indebtedness evidenced by the Securities shall be impaired by any act or failure to
act by the Issuer or by its failure to comply with the terms of the Fiscal Agency Agreement.

                  (g) Each holder of Securities, by acceptance thereof, authorizes and directs the Fiscal Agent
on its behalf to take such action as may be necessary or appropriate to effectuate the subordination provided
in this Paragraph and appoints the Fiscal Agent its attorney-in-fact for any and all such purposes.

                  As used herein, "Indebtedness" of the Issuer shall mean (i) all existing or future
indebtedness of the Issuer for borrowed money, (ii) all existing or future indebtedness for borrowed money of
other persons, the payment of which is guaranteed by the Issuer, (iii) all existing or future obligations of
the Issuer under any agreement obligating the Issuer to cause another person to maintain a minimum level of net
worth, or otherwise to ensure the solvency of such person and (iv) any expense or any claim or amount, to the
extent that payment of principal of, interest on and Redemption Amount with respect to the Securities is
required by law to be subordinated to the prior payment thereof. Any indebtedness of the Issuer which by its
express terms is subordinated in right of payment to, or ranks equally with, the Securities shall not
constitute Indebtedness. However, under current law the Issuer cannot issue any indebtedness that by its terms
is subordinate to the Securities. In addition, any other surplus notes or similar obligations of the Issuer
shall not constitute Indebtedness and will rank pari passu with the Securities.

                  As used herein, "Policy Claims" shall mean all existing or future claims of policyholders or
beneficiaries, as the case may be, under any and all existing or future policies, endorsements, riders and
other contracts of insurance, annuity contracts, including, without limitation, guaranteed investment
contracts, and funding agreements issued, assumed or renewed by the Issuer on or prior to the date hereof or
hereafter created, all claims under separate account agreements to the extent such claims are not fully
discharged by the assets held by the Issuer in the applicable separate accounts and all claims of The Life
Insurance Company Guarantee Corporation of New York or any other guaranty corporation or association of New
York or any other jurisdiction, other than claims described in clause (i) of the definition of "Other Creditor
Claims" below and claims for interest.

                  As used herein, "Other Creditor Claims" shall mean all other claims that, pursuant to Section
7435, have priority over claims with respect to the Securities. Under Section 7435 as currently in effect, such
other claims include: (i) claims with respect to the actual and necessary costs and expenses of administration
incurred by a liquidator, conservator, rehabilitator or ancillary rehabilitator under Section 7435; (ii) claims
with respect to the actual and necessary costs and expenses of administration incurred by The Life Insurance
Guaranty Corporation or The Life Insurance Company Guaranty Corporation of New York; (iii) claims of The Life
Insurance Company Guaranty Corporation for certain funds loaned to the Superintendent under


                                                      15


Section 7713(d) of the New York Insurance Law; (iv) debts up to $1,200 due to employees for services performed
within one year of the commencement of rehabilitation, liquidation, conservation, dissolution or reorganization
proceedings; (v) claims for payment for goods furnished or services rendered in the ordinary course of business
within 90 days of the declaration of the impairment or insolvency of the Issuer; (vi) claims of the federal or
any state or local government (provided that claims for a penalty or forfeiture shall be included only to the
extent of pecuniary loss and reasonable costs occasioned by the act giving rise to the forfeiture or penalty);
and (vii) claims of general creditors and all other claims having priority under Section 7435.

                  12. For so long as any of the Securities remain outstanding or any amount remains unpaid on
any of the Securities, the Issuer shall, in accordance with Rule 144A, comply with the terms of the agreements
set forth in Section 8 of the Fiscal Agency Agreement. The provisions of Section 8 of the Fiscal Agency
Agreement are hereby incorporated mutatis mutandis herein.

                  13. In case this Security shall become mutilated, defaced, destroyed, lost or stolen, the
Issuer will execute and upon the Issuer's request the Fiscal Agent shall authenticate and deliver a new
Security, having a number not contemporaneously outstanding, of like tenor (including the same date of
issuance) and equal principal amount, registered in the same manner, dated the date of its authentication and
bearing interest from the date to which interest has been paid on this Security, in exchange and substitution
for this Security (upon surrender and cancellation thereof) or in lieu of and substitution for this Security.
In the case where this Security is destroyed, lost or stolen, the applicant for a substituted Security shall
furnish to the Issuer such security or indemnity as may be required by it to save each of it harmless, and, in
every case of destruction, loss or theft of this Security, the applicant shall also furnish to the Issuer
satisfactory evidence of the destruction, loss or theft of this Security and of the ownership thereof;
provided, however, that if the registered holder hereof is, in the judgment of the Issuer, an institution of
recognized responsibility, such holder's written agreement of indemnity shall be deemed to be satisfactory for
the issuance of a new Security in lieu of and substitution for this Security. The Fiscal Agent shall
authenticate any such substituted Security and deliver the same only upon written request or authorization of
the Issuer. Upon the issuance of any substituted Security, the Issuer may require the payment by the registered
holder thereof of a sum sufficient to cover fees and expenses connected therewith. In case this Security has
matured or is about to mature and shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer
may, subject to the Payment Restrictions, instead of issuing a substitute Security, pay or authorize the
payment of the same (without surrender thereof except if this Security is mutilated or defaced) upon compliance
by the registered holder with the provisions of this Paragraph 13 as hereinabove set forth.

                  14. Section 11 of the Fiscal Agency Agreement, which Section is hereby incorporated mutatis
mutandis by reference herein, provides that, with certain exceptions as therein provided and with the consent
of the holders of a majority of the principal amount of the outstanding Securities present at a meeting duly
called pursuant thereto or by written consent of such percentage of the principal amount of all outstanding
Securities, the Issuer and the Fiscal Agent may, with the prior approval of the Superintendent, modify, amend
or supplement the Fiscal Agency Agreement or the terms of the Securities or may give consents or waivers or
take


                                                      16


other actions with respect thereto. Any such modification, amendment, supplement, consent, waiver or other
action shall be conclusive and binding on the holder of this Security and on all future holders of this
Security and of any Security issued upon the registration of transfer hereof or in exchange heretofore or in
lieu hereof, whether or not notation thereof is made upon this Security. The Fiscal Agency Agreement and the
terms of the Securities may, with the prior approval of the Superintendent, be modified or amended by the
Issuer and the Fiscal Agent, without the consent of any holders of Securities, for the purpose of (a) adding to
the covenants of the Issuer for the benefit of the holders of Securities, or (b) surrendering any right or
power conferred upon the Issuer, or (c) securing the Securities pursuant to the requirements hereof, thereof or
otherwise, or (d) evidencing the succession of another corporation to the Issuer and the assumption by such
successor of the covenants and obligations of the Issuer herein and in the Fiscal Agency Agreement as permitted
by the Securities and the Fiscal Agency Agreement, or (e) modifying the restrictions on, and procedures for,
resale and other transfers of the Securities to the extent required by any change in applicable law or
regulation (or the interpretation thereof) or in practices relating to the resale or transfer of restricted
securities generally, or (f) accommodating the issuance, if any, of Securities in book-entry or certificated
form and matters related thereto which do not adversely affect the interest of any Security holder in any
material respect, or (g) curing any ambiguity or correcting or supplementing any defective provision contained
herein or in the Fiscal Agency Agreement in a manner which does not adversely affect the interest of any
Security holder in any material respect, or (h) effecting any amendment which the Issuer and the Fiscal Agent
may determine is necessary or desirable and which shall not adversely affect the interest of any Security
holder, to all of which each holder of any Security, by acceptance thereof, consents.

                  15. Holders of Securities may enforce the Fiscal Agency Agreement or the Securities only in
the manner set forth below.

                  (a) In the event that any state or federal agency shall obtain an order or grant approval for
the rehabilitation, liquidation, conservation or dissolution of the Issuer, the Securities will upon the
obtaining of such an order or the granting of such approval immediately mature in full without any action on
the part of the Fiscal Agent or any holder of the Securities, with payment thereon being subject to the Payment
Restrictions, and any restrictions imposed as a consequence of, or pursuant to, such proceedings.
Notwithstanding any other provision of this Security or the Fiscal Agency Agreement, in no event shall the
Fiscal Agent or any holder of the Securities be entitled to declare the Securities to immediately mature or
otherwise be immediately payable.

                  (b) In the event that the Superintendent approves in whole or in part a payment of any
principal of, interest on or Redemption Amount with respect to any Securities and the Issuer fails to pay the
full amount of such approved payment on the date such amount is scheduled to be paid, such approved amount will
be immediately payable on such date without any action on the part of the Fiscal Agent or any holder of
Securities. In the event that the Issuer fails to perform any of its other obligations hereunder or under the
Fiscal Agency Agreement, each holder of the Securities may pursue any available remedy to enforce the
performance of any provision of such Securities or the Fiscal Agency Agreement; provided, however, that such
remedy shall in no event include the right to declare the Securities immediately payable, and shall in no
circumstances be inconsistent with the provisions of Section 1307. A delay or


                                                      17


omission by any Security holder in exercising any right or remedy accruing as a result of the Issuer's failure
to perform its obligations hereunder or under the Fiscal Agency Agreement and the continuation thereof shall
not impair such right or remedy or constitute a waiver of or acquiescence in such non-performance by the
Issuer. To the extent permitted by law, no remedy is exclusive of any other remedy and all remedies are
cumulative.

                  (c) Notwithstanding any other provision of this Security or the Fiscal Agency Agreement, the
right of any holder of Securities to receive payment of the principal of and interest on such holder's
Securities on or after the respective Scheduled Interest Payment Dates or Scheduled Maturity Date expressed in
such Securities, or to bring suit for the enforcement of any such payment on or after such respective Scheduled
Interest Payment Dates or Scheduled Maturity Date, in each case subject to such payment on such dates having
received the approval of the Superintendent pursuant to the Payment Restrictions, including the approval of the
Superintendent pursuant to Section 1307, is absolute and unconditional and shall not be impaired or affected
without the consent of the holder.

                  16. No reference herein to the Fiscal Agency Agreement and no provision of this Security or
of the Fiscal Agency Agreement shall alter or impair the obligation of the Issuer, subject to the Payment
Restrictions, to pay the principal of, interest on and Redemption Amount with respect to this Security at the
times, place and rate, and in the coin or currency, herein prescribed.

                  17. THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REFERENCE TO CONFLICTS OF LAWS PROVISIONS.


                                                      18


                                                                                                      EXHIBIT C




                                          FORM OF DEFINITIVE SECURITY





























                                                      C-1



                                          FORM OF DEFINITIVE SECURITY

                  THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM AND IN ACCORDANCE WITH THE FISCAL AGENCY AGREEMENT, COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT
THE CORPORATE TRUST OFFICE OF THE FISCAL AGENT. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM SUCH REGISTRATION PROVIDED BY RULE 144A UNDER THE
ACT (TOGETHER WITH ANY SUCCESSOR PROVISION AND AS MAY BE HEREAFTER AMENDED FROM TIME TO TIME, "RULE 144A").

                  [INCLUDE UNLESS, PURSUANT TO SECTION 6(G) OF THE FISCAL AGENCY AGREEMENT, THE ISSUER
DETERMINES THAT THE LEGEND MAY BE REMOVED] THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF PHOENIX LIFE
INSURANCE COMPANY (THE "ISSUER") THAT (A) THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (1) IN A MINIMUM PRINCIPAL AMOUNT OF $10,000 TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER, AS DEFINED IN RULE 144A, IN A TRANSACTION IN ACCORDANCE WITH RULE 144A, (2)
IN A MINIMUM PRINCIPAL AMOUNT OF $10,000 IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE ACT (TOGETHER WITH ANY SUCCESSOR PROVISION THERETO, AND AS MAY BE HEREAFTER AMENDED FROM
TIME TO TIME, "REGULATION S"), (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 (OR ANY
SUCCESSOR PROVISION THERETO, AND AS MAY BE HEREAFTER AMENDED FROM TIME TO TIME) UNDER THE ACT (IF AVAILABLE),
(4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (5) SUBJECT TO THE PRIOR APPROVAL OF THE
SUPERINTENDENT (AS HEREINAFTER DEFINED), TO THE ISSUER OR ANY AFFILIATE OF THE ISSUER (WITHIN THE MEANING OF
THE ACT), IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES,
AND (B) THAT THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY
FROM IT OF THE RESTRICTIONS REFERRED TO IN (A) ABOVE.

                  [INCLUDE UNLESS, PURSUANT TO SECTION 6(G) OF THE FISCAL AGENCY AGREEMENT, THE ISSUER
DETERMINES THAT THE LEGEND MAY BE REMOVED] THE HOLDER OF THIS SECURITY AGREES THAT, IN CONNECTION WITH ANY
EXCHANGE OR TRANSFER OF THIS SECURITY, SUCH HOLDER WILL DELIVER TO THE FISCAL AGENT A CERTIFICATION
SUBSTANTIALLY IN THE FORM OF EXHIBIT D TO THE FISCAL AGENCY AGREEMENT AND AN OPINION OF COUNSEL REFERRED TO IN
SECTION 6(G) OF THE FISCAL AGENCY AGREEMENT.




                  ALL PAYMENTS OF PRINCIPAL (INCLUDING ANY PAYMENT OF A REDEMPTION AMOUNT, AS HEREINAFTER
DEFINED) AND INTEREST ON THIS SECURITY MAY ONLY BE MADE OUT OF THE ISSUER'S FREE AND DIVISIBLE SURPLUS AND WITH
THE PRIOR APPROVAL OF THE SUPERINTENDENT OF INSURANCE OF THE STATE OF NEW YORK (THE "SUPERINTENDENT"), IN
ACCORDANCE WITH SECTION 1307 OF THE NEW YORK INSURANCE LAW (TOGETHER WITH ANY SUCCESSOR PROVISION, AND AS MAY
BE HEREAFTER AMENDED FROM TIME TO TIME, "SECTION 1307"). THERE ARE NO GUIDELINES OR INTERPRETATIONS AS TO THE
EXTENT OF THE SUPERINTENDENT'S DISCRETION UNDER SECTION 1307 IN DETERMINING WHETHER THE FINANCIAL CONDITION OF
THE ISSUER WARRANTS THE MAKING OF SUCH PAYMENTS.

























                                                       2



                                         PHOENIX LIFE INSURANCE COMPANY

                                   7.15% Surplus Note scheduled to mature on
                                               December 15, 2034


CUSIP No.:  71909V AC 8
ISIN No.:   US71909VAC81                                                                             $_______

                  PHOENIX LIFE INSURANCE COMPANY, a stock life insurance company organized under the laws of
the State of New York (herein called the "Issuer"), for value received, hereby promises to pay, subject to the
approval of the Superintendent pursuant to Section 1307, to Cede & Co., or registered assigns, the
principal sum of __________ United States dollars ($____________) on December 15, 2034 (the "Scheduled Maturity
Date"), and to pay interest thereon, subject to the approval of the Superintendent pursuant to Section 1307,
from December 15, 2004 or from the most recent Scheduled Interest Payment Date to which interest has been paid
or duly provided for, semi-annually in arrears on June 15 and December 15 in each year, commencing June 15,
2005 (each a "Scheduled Interest Payment Date"), at the rate of 7.15% per annum, until the principal hereof is
paid or duly provided for. This Security is subject to redemption prior to the Scheduled Maturity Date as
specified in paragraph 4 hereof. The date upon which any state or federal agency obtains an order or grants
approval for the rehabilitation, liquidation, conservation or dissolution of the Issuer shall also be deemed to
be the Scheduled Maturity Date. As specified on the reverse hereof, all payments of principal of, interest on
or Redemption Amount (as hereinafter defined) with respect to this Security may be made only out of the
Issuer's free and divisible surplus and only with the prior approval of the Superintendent pursuant to Section
1307. The interest so payable, and punctually paid or duly provided for, on any Scheduled Interest Payment Date
shall be paid, in accordance with the terms of the Fiscal Agency Agreement hereinafter referred to, to the
person (the "registered holder") in whose name this Security (or one or more predecessor Securities) is
registered at the close of business on June 1 or December 1 whether or not a Business Day (as defined on the
reverse hereof), as the case may be (each a "Regular Record Date"), next preceding such Scheduled Interest
Payment Date. Interest on the Securities shall be calculated on the basis of a 360-day year of twelve 30-day
months. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to
the registered holder on such Regular Record Date and shall be paid to the person in whose name this Security
(or one or more predecessor Securities) is registered at the close of business on a special record date for the
payment of such interest to be fixed by the Issuer, notice whereof shall be given to registered holders of the
Securities not less than 15 days prior to such special record date.

                  Principal of and Redemption Amount with respect to this Security shall be payable against
surrender hereof at the corporate trust office of the Fiscal Agent hereinafter referred to and at the offices
of such other Paying Agents as the Issuer shall have appointed pursuant to the Fiscal Agency Agreement.
Payments of principal of and Redemption Amount with respect to the Securities shall be made only against
surrender of the Securities. Payments of interest on this Security may be made, in accordance with the
foregoing and subject to applicable laws and regulations, by check mailed on or before the Scheduled Interest
Payment Date of such payment to the person entitled thereto at such person's address appearing on the
aforementioned register. Any permitted payment of principal of and Redemption Amount with respect to this


                                                       3



Security may be made by check. Notwithstanding the foregoing, permitted payments of principal of, any interest
on or Redemption Amount with respect to this Security shall be made, in the case of a registered holder of at
least $5,000,000 aggregate principal amount of Securities, by wire transfer to an account maintained by the
payee with a bank in the United States if such registered holder so elects by giving notice to the Fiscal
Agent, not less than 15 days (or such fewer days as the Fiscal Agent may accept at its discretion) prior to the
applicable Scheduled Maturity Date or Scheduled Interest Payment Date hereof, of such election and of the
account to which payment is to be made. Unless such designation is revoked, any such designation made by such
holder with respect to such Securities shall remain in effect with respect to any future payments with respect
to such Securities payable to such holder. The Issuer agrees that until this Security has been delivered to the
Fiscal Agent for cancellation, or monies sufficient to pay the full principal of and interest remaining unpaid
on this Security have been made available for payment and either paid or returned to the Issuer as provided
herein, it will at all times maintain offices or agencies in the Borough of Manhattan, The City of New York for
the payment of the principal of, interest on and Redemption Amount with respect to the Securities as herein
provided.

                  Reference is hereby made to the further provisions of this Security set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

                  This Security may be executed by the Issuer by manual or facsimile signatures, and such
signatures may be executed on separate counterparts.

                  Unless the certificate of authentication hereon has been executed by the Fiscal Agent by
manual signature, this Security shall not be valid or obligatory for any purpose.




















                                                       4



                  IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.

Dated:

                                                     PHOENIX LIFE INSURANCE COMPANY

                                                     By:   ____________________________________________________
                                                           Name:
                                                           Title:



                                                     By:   ____________________________________________________
                                                           Name:
                                                           Title:



                  This is one of the Securities referred to in the within-mentioned Fiscal Agency Agreement.

                                                     THE BANK OF NEW YORK
                                                     as Fiscal Agent

                                                     By:   ____________________________________________________
                                                                          Authorized Signatory




















                                                       5




                                                FORM OF REVERSE

                  1.        This Security is one of a duly authorized issue of 7.15% Surplus Notes scheduled to
mature on December 15, 2034 of the Issuer (herein called the "Securities" or "Notes"), limited in aggregate
principal amount to $175,000,000. The Issuer and The Bank of New York (as "Fiscal Agent") have entered into a
Fiscal Agency Agreement, dated as of December 15, 2004 (such instrument, as it may be duly amended from time to
time, is herein called the "Fiscal Agency Agreement"), which provides for the mechanism for issuing the
Securities and, inter alia, sets forth certain duties of the Fiscal Agent in connection therewith. As used
herein, the term "Fiscal Agent" includes any successor fiscal agent under the Fiscal Agency Agreement. Copies
of the Fiscal Agency Agreement are on file and available for inspection at the corporate trust office of the
Fiscal Agent in the Borough of Manhattan, The City of New York. Holders of Securities are referred to the
Fiscal Agency Agreement for a statement of the terms thereof, including those relating to transfer, payment,
exchanges and certain other matters, to all of which terms the Securities are subject. The Fiscal Agent or any
Paying Agent shall also act as Transfer Agent and Securities registrar. Terms used herein which are defined in
the Fiscal Agency Agreement but not otherwise defined herein shall have the meanings assigned to such terms in
the Fiscal Agency Agreement.

                  The Securities are direct and unsecured obligations of the Issuer and, subject to the payment
restrictions contained in paragraphs 5 and 11 hereof (the "Payment Restrictions"), are scheduled to mature on
December 15, 2034. Section 1307 provides that the Securities are not part of the legal liabilities of the
Issuer and are not a basis of any set-off against the Issuer.

                  The date upon which any state or federal agency obtains an order or grants approval for the
rehabilitation, liquidation, conservation or dissolution of the Issuer shall also be deemed to be the Scheduled
Maturity Date.

                  2.        The Securities are issuable only in fully registered form without coupons. The
Securities and beneficial interests in Global Securities shall be issuable: (i) in the case of Securities
offered and sold to the Initial Purchasers and subsequently transferred in reliance on Rule 144A, in minimum
denominations of $10,000 and any amount in excess thereof that is an integral multiple of $1,000; (ii) in the
case of Securities offered and sold to the Initial Purchasers and subsequently transferred in reliance on
Regulation S, in minimum denominations of $10,000 and any amount in excess thereof that is an integral multiple
of $1,000; and (iii) in the case of Securities offered and sold to the Initial Purchasers and subsequently
transferred to Accredited Investors, in minimum denominations of $100,000 and any amount in excess thereof that
is an integral multiple of $1,000.

                  3.        The Issuer shall maintain, in the Borough of Manhattan, The City of New York, a
Transfer Agent where Securities may be registered or surrendered for registration of transfer or exchange. The
Issuer has initially appointed the corporate trust office of the Fiscal Agent as its Transfer Agent in the
Borough of Manhattan, The City of New York. The Issuer shall cause each Transfer Agent to act as a Securities
registrar and shall cause to be kept at the office of each Transfer Agent a register in which, subject to such
reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Securities and
registration of transfers of Securities. The Issuer reserves the right to vary or terminate the appointment of
any


                                                       6



Transfer Agent or to appoint additional or other Transfer Agents or to approve any change in the office
through which any Transfer Agent acts; provided, that there shall at all times be a Transfer Agent in the
Borough of Manhattan, The City of New York. The Issuer shall cause notice of any resignation, termination or
appointment of the Fiscal Agent or any Paying Agent or Transfer Agent and of any change in the office through
which any such Agent shall act to be provided to holders of Securities.

                  Subject to the restrictions set forth herein and in the Fiscal Agency Agreement, the transfer
of a Security is registrable on the aforementioned register upon surrender of such Security at any Transfer
Agent duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer
duly executed by, the registered holder thereof or his attorney duly authorized in writing. Upon such surrender
of this Security for registration of transfer, the Issuer shall execute, and the Fiscal Agent shall
authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities,
dated the date of authentication thereof, of any authorized denominations and of a like aggregate principal
amount.

                  Subject to the restrictions set forth herein and in the Fiscal Agency Agreement, at the
option of the registered holder upon request confirmed in writing, Securities may be exchanged for Securities
of any authorized denominations and aggregate principal amount upon surrender of the Securities to be exchanged
at the office of any Transfer Agent. Whenever any Securities are so surrendered for exchange, the Issuer shall
execute, and the Fiscal Agent shall authenticate and deliver, the Securities which the registered holder making
the exchange is entitled to receive. Any registration of transfer or exchange shall be effected upon the Issuer
being satisfied with the documents of title and identity of the person making the request and subject to the
restrictions set forth in the immediately following paragraph and such reasonable regulations as the Issuer may
from time to time agree with the Fiscal Agent.

                  All Securities issued upon any registration of transfer or exchange of Securities shall be
the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits, as the
Securities surrendered upon such registration of transfer or exchange. No service charge shall be made for any
registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith and any other amounts, if any, required to be paid
by the provisions of the Securities in connection with a transfer or exchange thereof.

                  Prior to due presentment of this Security for registration of transfer, the Issuer, the
Fiscal Agent and any agent of the Issuer or the Fiscal Agent may treat the person in whose name this Security
is registered as the absolute owner hereof for all purposes, whether or not this Security be overdue, and
neither the Issuer nor the Fiscal Agent nor any such agent shall be affected by notice to the contrary.

                  4.        (a) Subject to the Payment Restrictions, including the prior approval of the
Superintendent pursuant to Section 1307, the Securities are subject to redemption, as a whole or in part, at
the option of the Issuer at any time and from time to time, at a redemption price equal to the greater of (i)
100% of the principal amount of the Securities to be redeemed and (ii) as determined by the Quotation Agent (as
defined below), the sum of the present values of the


                                                       7



remaining scheduled payments of principal and interest on the Securities to be redeemed (not including any
portion of such payments of interest accrued to the date of redemption) discounted to the date of redemption on
a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate
(as defined below), plus 35 basis points (the greater of (i) and (ii), the "Redemption Amount"), plus, in
either case (i) or (ii), accrued interest on the Securities to be redeemed to, but not including, the date of
redemption.

                  (i)       "Adjusted Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semi-annual equivalent yield to maturity, as determined by the Quotation Agent, of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for that redemption date.

                  (ii)      "Comparable Treasury Issue" means the United States Treasury security selected by
the Quotation Agent as having a maturity comparable to the remaining term of the Securities to be redeemed that
would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term of such Securities.

                  (iii)     "Comparable Treasury Price" means, with respect to any redemption date, (i) the
average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest of these Reference Treasury Dealer Quotations, or (ii) if the Issuer obtains fewer than three Reference
Treasury Dealer Quotations, the average of all such Quotations, in either case (i) or (ii) as determined by the
Issuer.

                  (iv)      "Quotation Agent" means Goldman, Sachs & Co. (or its successor) or any
successor Quotation Agent appointed by the Issuer from time to time.

                  (v)       Reference Treasury Dealer" means: (i) Goldman, Sachs & Co. (or its successor)
and one or more other Primary Treasury Dealers (as defined in this paragraph) appointed by the Issuer;
provided, however, that if Goldman, Sachs & Co. (or its successor) or any other selected Primary Treasury
Dealer shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Issuer shall substitute therefor another Primary Treasury Dealer; and (ii) any other Primary
Treasury Dealer selected by the Issuer.

                  (vi)      "Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the Issuer, of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Issuer by that Reference Treasury Dealer at 5:00 p.m. on the third Business Day before that
redemption date.

                  (b)       Notice of any redemption pursuant to paragraph 4(a) hereof will be given to holders
of the Securities as set forth below. Any determination that is contemplated in paragraph 4(a) hereof to be
made by the Quotation Agent or the Issuer may be made by such person in its sole discretion and, when made by
such person, shall be final and binding on the Issuer, holders of the Securities and all other persons absent
manifest error. Interest installments


                                                       8



due on this Security on or prior to a redemption date will be payable to the holder of this Security of record
at the close of business on the relevant record date, all as provided in the Fiscal Agency Agreement.

                  (c)       In the case of any partial redemption of the Securities, the Securities to be
redeemed shall be selected by the Fiscal Agent not less than 30 days prior to the date of such redemption, from
the outstanding Securities not previously called for redemption, by such method as the Fiscal Agent shall deem
fair and appropriate and which may provide for the selection for redemption of portions (equal to $1,000 or a
multiple thereof) of the principal of Securities of denomination larger than $1,000; provided, that if at the
time of redemption such Securities are registered as a Global Security, the Depositary for such Global Security
shall determine, in accordance with its procedures, the principal amount of such Securities to be redeemed held
by each holder of a beneficial interest in such Global Security. The Fiscal Agent shall notify the Issuer
promptly of the Securities or portion thereof to be redeemed.

                  (d)       Notices to redeem Securities shall be given to holders of Securities in writing
mailed, first-class postage prepaid, to each holder of registered Securities, or portions thereof, so to be
redeemed, at his address as it appears in the securities register. Such notice will be given once not more than
60 days nor less than 30 days prior to the date fixed for redemption. If by reason of the suspension of regular
mail service, or by reason of any other cause, it shall be impracticable to give notice to the holders of
Securities in the manner prescribed herein, then such notification in lieu thereof as shall be made by the
Issuer or by the Fiscal Agent on behalf of and at the instruction of the Issuer shall constitute sufficient
provision of such notice, if such notification shall, so far as may be practicable, approximate the terms and
conditions of the mailed notice in lieu of which it is given. Neither the failure to give notice nor any defect
in any notice given to any particular holder of a Note shall affect the sufficiency of any notice with respect
to other Securities. Notices to redeem Securities shall specify the date fixed for redemption, the Redemption
Amount, the place or places of payment, that payment will be made upon presentation and surrender of the
Securities to be redeemed (or portion thereof in the case of a partial redemption), that interest accrued to
the date fixed for redemption (unless the date of redemption is a Scheduled Interest Payment Date) will be paid
as specified in said notice, and that on and after said date interest thereon will cease to accrue if the
Securities are so redeemed. In addition, in the case of a partial redemption, such notice shall specify the
Securities called for redemption and the aggregate principal amount of the Securities to remain outstanding
after the redemption.

                  (e)       If notice of redemption has been given in the manner set forth in paragraph 4(d)
hereof, the Securities so to be redeemed shall be payable in full on the date specified in such notice and upon
presentation and surrender of the Securities at the place or places specified in such notice, the Securities
shall be paid and redeemed by the Issuer at the places and in the manner and currency herein specified and at
the Redemption Amount together with accrued interest (unless the redemption date is a Scheduled Interest
Payment Date) to, but not including, the redemption date. From and after the redemption date, if monies for the
redemption of Securities called for redemption shall have been made available at the Corporate Trust Office of
the Fiscal Agent for redemption on the redemption date, the Securities called for redemption shall cease to
bear interest, and the only right of the holders with respect to such Securities or portion thereof being
redeemed shall be to receive payment of the Redemption


                                                       9



Amount together with accrued interest (unless the redemption date is a Scheduled Interest Payment Date) to the
redemption date as aforesaid. If monies for the redemption of the Securities are not made available for payment
until after the redemption date, the Securities called for redemption shall not cease to bear interest until
such monies have been so made available.

                  (f)       Any Security that is to be redeemed only in part shall be surrendered with, if the
Issuer or the Fiscal Agent so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Issuer and the Fiscal Agent duly executed by, the holder thereof or his attorney duly
authorized in writing, and the Issuer shall execute, and the Fiscal Agent shall authenticate and deliver to the
holder of such Security without service charge, a new registered Security or Securities, of any authorized
denomination as requested by such holder, and as permitted by Section 1(d) of the Fiscal Agency Agreement, in
aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security
so surrendered.

                  5.        (a) Notwithstanding anything to the contrary set forth herein or in the Fiscal
Agency Agreement, any payment of principal of, interest on or Redemption Amount or any other monies owing with
respect to this Security, whether at the Scheduled Interest Payment Date or Scheduled Maturity Date specified
herein, on the redemption date or otherwise, may be made only (i) out of the free and divisible surplus of the
Issuer which the Superintendent determines to be available for such payments under Section 1307 and (ii) with
the prior approval of the Superintendent whenever, in his judgment, the financial condition of the Issuer
warrants such payment, in accordance with Section 1307. If the Superintendent does not approve the making of
any payment of principal of or interest on this Security on the Scheduled Interest Payment Date or Scheduled
Maturity Date thereof, as specified herein, the Scheduled Interest Payment Date or Scheduled Maturity Date, as
the case may be, shall be extended and such payment shall be made by the Issuer on the next following Business
Day on which the Issuer shall have the approval of the Superintendent to make such payment. Interest will
continue to accrue on any such unpaid principal through the actual date of payment at the rate of interest
stated on the face hereof. Interest will not accrue on interest with respect to which the Scheduled Interest
Payment Date has been extended, during the period of such extension. If the Superintendent approves a payment
of principal of or interest on the Securities in an amount that is less than the full amount of principal of
and interest on the Securities then scheduled to be paid in respect of the Securities, payment of such partial
amount shall be made pro rata among Security holders as their interests may appear.

                  (b)       Any payment of principal of or interest on any Security as to which the approval of
the Superintendent has been obtained and which is not punctually paid or duly provided for on the Scheduled
Interest Payment Date or Scheduled Maturity Date thereof, as set forth herein (such payment being referred to
as an "Unpaid Amount"), will forthwith cease to be payable to the registered owner of this Security on the
relevant record date designated herein, and such Unpaid Amount will instead be payable to the registered owner
of this Security on a subsequent special record date. The Issuer shall fix the special record date and payment
date for the payment of any Unpaid Amount. At least 15 days before the special record date, the Issuer shall
mail to each holder of the Securities and the Fiscal Agent a notice that states the special record date,
payment date and amount of interest or principal to be paid. On the payment date


                                                      10



set forth in such notice, the Paying Agent shall pay the amount of interest or principal to be so paid to each
holder of the Securities in the manner set forth in Section 4(a) of the Fiscal Agency Agreement.

                  6.        (a) For so long as the Fiscal Agent is acting as a Paying Agent hereunder, the
Issuer shall provide, subject to the Payment Restrictions, to the Fiscal Agent in immediately available funds
on or prior to 10:00 a.m., New York time, of each date on which a payment of principal of, interest on or
Redemption Amount with respect to this Security is payable, as set forth herein, such amounts as are necessary
(with any amounts then held by the Fiscal Agent and available for the purpose) to make such payment, and the
Issuer hereby authorizes and directs the Fiscal Agent from funds so provided to it to make or cause to be made
payment of the principal of, interest on and Redemption Amount with respect to, as the case may be, this
Security as set forth herein and in the Fiscal Agency Agreement. Payments of interest on this Security may be
made, in accordance with the foregoing and subject to applicable laws and regulations, by check mailed on or
before the Scheduled Interest Payment Date of such payment to the person entitled thereto at such person's
address appearing on the aforementioned register. Any permitted payment of principal of this Security may be
made by check. Notwithstanding the foregoing, permitted payments of principal of, interest on or Redemption
Amount with respect to this Security may be made, in the case of a registered holder of at least $5,000,000
aggregate principal amount of Securities, by wire transfer to an account maintained by the payee with a bank in
the United States if such registered holder so elects by giving notice to the Fiscal Agent, not less than 15
days (or such fewer days as the Fiscal Agent may accept at its discretion) prior to the date on which such
payment is scheduled to be made, of such election and of the account to which payment is to be made. Unless
such designation is revoked, any such designation made by such holder with respect to such Securities shall
remain in effect with respect to any future payments with respect to such Securities payable to such holder.
The Issuer shall pay any reasonable administrative costs in connection with making any such payments. The
Fiscal Agent shall arrange directly with any other Paying Agent who may have been appointed by the Issuer
pursuant to the provisions of Section 2 of the Fiscal Agency Agreement for the payment from funds so paid by
the Issuer of the principal of, interest on and Redemption Amount with respect to this Security. Any monies
held by the Fiscal Agent for the payment of the principal of, interest on or Redemption Amount with respect to
any of the Securities remaining unclaimed for two years after such principal, interest or Redemption Amount has
become payable in accordance with the Payment Restrictions (whether at the Scheduled Maturity Date or
otherwise) and monies sufficient therefor shall have been duly made available for payment shall, together with
any interest made available for payment thereon, be repaid to the Issuer upon written request and upon such
repayment all liability of the Fiscal Agent with respect thereto shall cease, without, however, limiting in any
way any obligation the Issuer may have to pay the principal of, interest on and Redemption Amount with respect
to this Security, subject to the Payment Restrictions.

                  (b)       In any case where the Scheduled Interest Payment Date, Scheduled Maturity Date or
redemption date of any Security shall be at any place of payment a day on which banking institutions are not
carrying out transactions in U.S. dollars or are authorized or obligated by law or executive order to close,
then payment of principal of, interest on or Redemption Amount with respect to any Security need not be made on
such date at such place but may be made on the next succeeding day at such place which is not a day on which
banking institutions in the applicable jurisdiction are generally authorized or obligated by law or


                                                      11



executive order to close (a "Business Day"), with the same force and effect as if made on the Scheduled
Interest Payment Date, Scheduled Maturity Date or redemption date thereof, and no interest shall accrue for the
period of such delay.

                  7.        The Issuer shall pay all stamp and other duties, if any, which may be imposed by
the United States of America or any governmental entity or any political subdivision thereof or taxing
authority of or in the foregoing with respect to the Fiscal Agency Agreement or the initial issuance of this
Security. Except as otherwise specifically provided in this Security, the Issuer shall not be required to make
any payment with respect to any tax, duty, assessment or other governmental charge of whatever nature imposed
or levied by any government or any political subdivision or taxing authority thereof or therein.

                  8.        For so long as any of the Securities remain outstanding or any amount remains
unpaid on any of the Securities:

                  (a)       Except with respect to transactions covered by paragraph 9 hereof, the Issuer will
do or cause to be done all things necessary to preserve and keep in full force and effect its corporate
existence, material rights (charter and statutory) and franchise; provided, however, that the Issuer shall not
be required to preserve any such right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of the Issuer and that the Issuer
has used its best efforts to not disadvantage in any material respect the holders of the Securities, or that
not preserving such right or franchise is in the best interest of the policyholders of the Issuer having
considered the interests of the holders of the Securities.

                  (b)       The Issuer will not be or become an open end investment company, unit investment
trust or face amount certificate company that is or is required to be registered under Section 8 of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), if such action would cause the
Issuer to be in violation of the Investment Company Act at any time prior to payment in full of the Securities.

                  (c)       The Issuer shall use its best efforts to obtain the approval of the Superintendent
in accordance with Section 1307 for the payment by the Issuer of principal of and interest on the Securities on
the Scheduled Interest Payment Dates or Scheduled Maturity Date thereof, and, in the event any such approval
has not been obtained for any such payment at or prior to the Scheduled Interest Payment Date or Scheduled
Maturity Date thereof, as the case may be, to continue to use its best efforts to obtain such approval promptly
thereafter. Not less than 45 days prior to the Scheduled Interest Payment Date or Scheduled Maturity Date
thereof (excluding any such Scheduled Maturity Date that arises as a result of the obtaining of an order or the
granting of approval for the rehabilitation, liquidation, conservation or dissolution of the Issuer), the
Issuer will seek the approval of the Superintendent to make each payment of principal of and interest on the
Securities. In addition, the Issuer shall notify or cause to be notified the Fiscal Agent no later than 5
Business Days (as defined herein), and the Fiscal Agent will notify each holder, prior to the Scheduled
Interest Payment Date for interest on or the Scheduled Maturity Date for principal of any Security (excluding
any such Scheduled Maturity Date which arises as a result of the obtaining of an order or the granting of
approval for the rehabilitation, liquidation, conservation or dissolution of the Issuer) in the event that the


                                                      12



Superintendent has not then approved the making of any such payment on such Scheduled Interest Payment Date or
such Scheduled Maturity Date, and thereafter shall promptly notify the Fiscal Agent, and the Fiscal Agent will
notify each holder, in the event that the Issuer shall have failed to make any such payment on any such
Scheduled Interest Payment Date or such Scheduled Maturity Date. Without limiting the Issuer's obligations set
forth in this paragraph, it is understood that, to the extent authorized by the Issuer's Board of Directors,
the Issuer may continue to declare and pay dividends to its stockholders and to declare policyowner dividends
and to make dividend payments on its participating policies, in each case even though payments on the
Securities may not have been approved by the Superintendent, regardless of the effect any such declaration or
payment may have on the Superintendent's decision regarding payment of principal of, interest on or Redemption
Amount with respect to the Securities.

                  9.        For so long as any of the Securities remain outstanding or any amounts remain
unpaid on any of the Securities, the Issuer may convert itself in any legal manner from a stock life insurance
company into a mutual life insurance company, merge or consolidate with or into any other corporation or sell,
convey, transfer or otherwise dispose of all or substantially all of its assets to any person, firm or
corporation, if (i)(A) in the case of a conversion, merger or consolidation, the Issuer is the surviving
corporation or (B) in the case of a conversion, merger or consolidation where the Issuer is not the surviving
corporation and in the case of any such sale, conveyance, transfer or other disposition, the successor
corporation is a corporation organized and existing under the laws of the United States or a State thereof and
such corporation expressly assumes by supplemental fiscal agency agreement all the obligations of the Issuer
under the Securities and the Fiscal Agency Agreement, (ii) at the time of any such conversion, merger or
consolidation, or such sale, conveyance, transfer or other disposition, the Issuer shall not have failed to
make payment of principal of, interest on or Redemption Amount with respect to the Securities after having
received the Superintendent's prior approval to make such payment and, in the case of any payment of the
Redemption Amount, the Issuer has given notice of redemption pursuant to paragraph 4(a) hereof and (iii) the
Issuer has delivered to the Fiscal Agent an Officer's Certificate stating that such conversion, merger,
consolidation, sale, conveyance, transfer or other disposition complies with this paragraph and that all
conditions precedent herein provided for relating to such transaction have been complied with. In the event of
the assumption by a successor corporation of the obligations of the Issuer as provided in clause (i)(B) of the
immediately preceding sentence, such successor corporation shall succeed to and be substituted for the Issuer
hereunder and under the Fiscal Agency Agreement and all such obligations of the Issuer shall terminate.

                  10.       No "employee benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") that is subject to Title I of ERISA, or "plan"
within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), as to
which the Issuer or any of its affiliates is a "party in interest" within the meaning of Section 3(14) of ERISA
or a "disqualified person" within the meaning of Section 4975(e)(2) of the Code (each a "Plan"), and no person
using the assets of any such Plan, may acquire this Security, unless the acquisition and continued holding of
the Security is exempt under one or more of Prohibited Transaction Class Exemptions ("PTCE") 84-14, 90-1,
91-38, 95-60 or 96-23 issued by the United States Department of Labor ("DOL") or another applicable prohibited
transaction exemption issued by the DOL. The purchase by any person of this Security shall constitute a
representation by such person to the Issuer and the Fiscal Agent


                                                      13



that such person either (i) is not a Plan or a person using the assets of any Plan or (ii) is a Plan or is a
person using the assets of a Plan to purchase this Security and such Plan is (x) a "Qualified Institutional
Buyer" as defined in Section 144A of the Act and (y) may acquire and hold this Security under PTCE 84-14, 90-1,
91-38, 95-60 or 96-23 or another applicable prohibited transaction exemption issued by the DOL. The
restrictions on purchases (and continued holding) of the Securities set forth in this paragraph 10 are in
addition to those otherwise set forth in Section 6 of the Fiscal Agency Agreement and under applicable law.

                  11.       (a) The Issuer agrees, and each Security holder by accepting a Security agrees,
that the indebtedness evidenced by the Securities is subordinated in right of payment, to the extent and in the
manner provided in this paragraph, to the prior payment in full of all Indebtedness, Policy Claims and Other
Creditor Claims (each as hereinafter defined), in accordance with Section 7435 of the New York Insurance Law
(together with any successor provision, and as may be hereafter amended from time to time, "Section 7435").

                  (b)       Upon any distribution to creditors of the Issuer in any rehabilitation,
liquidation, conservation, dissolution or reorganization proceeding relating to the Issuer or its property, the
priority of claims of Security holders shall be determined in accordance with Section 7435. In a proceeding
commenced under Article 74 of the New York Insurance Law, claims for principal of, interest on or Redemption
Amount with respect to the Securities constitute Class 7 claims under Section 7435, as currently in effect. If
the Superintendent approves a payment of principal of, interest on or Redemption Amount with respect to the
Securities in an amount that is less than the full amount of principal of, interest on and Redemption Amount
with respect to the Securities then scheduled to be paid in respect of the Securities, payment of such partial
amount shall be made pro rata among Security holders as their interests may appear.

                  (c)       If a distribution is made to Security holders that, because of this paragraph,
should not have been made to them, the Security holders who receive the distribution shall hold it in trust for
holders of Policy Claims, Indebtedness and Other Creditor Claims-and pay it over to them as their interests may
appear.

                  (d)       The Issuer shall promptly notify the Fiscal Agent and the Paying Agent of any facts
known to the Issuer that would cause a payment of principal of, interest on or Redemption Amount with respect
to the Securities to violate this paragraph.

                  (e)       This paragraph defines the relative rights of Security holders, on the one hand,
and holders of any other claims, in accordance with Section 7435, on the other hand. Nothing in this Security
or the Fiscal Agency Agreement shall: (i) impair, as between the Issuer and Security holders, the obligation of
the Issuer which is, subject to the Payment Restrictions, absolute and unconditional to pay principal of and
interest on the Securities in accordance with their terms; (ii) affect the relative rights of Security holders
and creditors of the Issuer, other than holders of Policy Claims, Indebtedness or Other Creditor Claims; or
(iii) prevent the Fiscal Agent or any Security holder from exercising any available remedies upon a breach by
the Issuer of its obligations hereunder, subject to the rights of holders of Policy Claims, Indebtedness or
other Creditor Claims to receive distributions otherwise payable to Security holders.


                                                      14



                  (f) No right of any holder of Policy Claims, Indebtedness or Other Creditor Claims to enforce
the subordination of the indebtedness evidenced by the Securities shall be impaired by any act or failure to
act by the Issuer or by its failure to comply with the terms of the Fiscal Agency Agreement.

                  (g) Each holder of Securities, by acceptance thereof, authorizes and directs the Fiscal Agent
on its behalf to take such action as may be necessary or appropriate to effectuate the subordination provided
in this paragraph and appoints the Fiscal Agent its attorney-in-fact for any and all such purposes.

                  As used herein, "Indebtedness" of the Issuer shall mean (i) all existing or future
indebtedness of the Issuer for borrowed money, (ii) all existing or future indebtedness for borrowed money of
other persons, the payment of which is guaranteed by the Issuer, (iii) all existing or future obligations of
the Issuer under any agreement obligating the Issuer to cause another person to maintain a minimum level of net
worth, or otherwise to ensure the solvency of such person and (iv) any expense or any claim or amount, to the
extent that payment of principal of, interest on and Redemption Amount with respect to the Securities is
required by law to be subordinated to the prior payment thereof. Any indebtedness of the Issuer which by its
express terms is subordinated in right of payment to, or ranks equally with, the Securities shall not
constitute Indebtedness. However, under current law the Issuer cannot issue any indebtedness that by its terms
is subordinate to the Securities. In addition, any other surplus notes or similar obligations of the Issuer
shall not constitute Indebtedness and will rank pari passu with the Securities.

                  As used herein, "Policy Claims" shall mean all existing or future claims of policyholders or
beneficiaries, as the case may be, under any and all existing or future policies, endorsements, riders and
other contracts of insurance, annuity contracts, including, without limitation, guaranteed investment
contracts, and funding agreements issued, assumed or renewed by the Issuer on or prior to the date hereof or
hereafter created, all claims under separate account agreements to the extent such claims are not fully
discharged by the assets held by the Issuer in the applicable separate accounts and all claims of The Life
Insurance Company Guaranty Corporation of New York or any other guaranty corporation or association of New York
or any other jurisdiction, other than claims described in clause (i) of the definition of "Other Creditor
Claims" below and claims for interest.

                  As used herein, "Other Creditor Claims" shall mean all other claims that, pursuant to Section
7435, have priority over claims with respect to the Securities. Under Section 7435 as currently in effect, such
other claims include: (i) claims with respect to the actual and necessary costs and expenses of administration
incurred by a liquidator, conservator, rehabilitator or ancillary rehabilitator under Section 7435; (ii) claims
with respect to the actual and necessary costs and expenses of administration incurred by The Life Insurance
Guaranty Corporation or The Life Insurance Company Guaranty Corporation of New York; (iii) claims of The Life
Insurance Company Guaranty Corporation for certain funds loaned to the Superintendent under Section 7713(d) of
the New York Insurance Law; (iv) debts up to $1,200 due to employees for services performed within one year of
the commencement of rehabilitation, liquidation, conservation, dissolution or reorganization proceedings; (v)
claims for payment for goods furnished or services rendered in the ordinary course of business within 90 days
of the


                                                      15



declaration of the impairment or insolvency of the Issuer; (vi) claims of the federal or any state or
local government (provided that claims for a penalty or forfeiture shall be included only to the extent of
pecuniary loss and reasonable costs occasioned by the act giving rise to the forfeiture or penalty); and (vii)
claims of general creditors and all other claims having priority under Section 7435.

                  12.       For so long as any of the Securities remain outstanding or any amount remains
unpaid on any of the Securities, the Issuer shall, in accordance with Rule 144A, comply with the terms of the
agreements set forth in Section 8 of the Fiscal Agency Agreement. The provisions of Section 8 of the Fiscal
Agency Agreement are hereby incorporated mutatis mutandis herein.

                  13.       In case this Security shall become mutilated, defaced, destroyed, lost or stolen,
the Issuer will execute and upon the Issuer's request the Fiscal Agent shall authenticate and deliver a new
Security, having a number not contemporaneously outstanding, of like tenor (including the same date of
issuance) and equal principal amount, registered in the same manner, dated the date of its authentication and
bearing interest from the date to which interest has been paid on this Security, in exchange and substitution
for this Security (upon surrender and cancellation thereof) or in lieu of and substitution for this Security.
In the case where this Security is destroyed, lost or stolen, the applicant for a substituted Security shall
furnish to the Issuer such security or indemnity as may be required by it to save each of it harmless, and, in
every case of destruction, loss or theft of this Security, the applicant shall also furnish to the Issuer
satisfactory evidence of the destruction, loss or theft of this Security and of the ownership thereof;
provided, however, that if the registered holder hereof is, in the judgment of the Issuer, an institution of
recognized responsibility, such holder's written agreement of indemnity shall be deemed to be satisfactory for
the issuance of a new Security in lieu of and substitution for this Security. The Fiscal Agent shall
authenticate any such substituted Security and deliver the same only upon written request or authorization of
the Issuer. Upon the issuance of any substituted Security, the Issuer may require the payment by the registered
holder thereof of a sum sufficient to cover fees and expenses connected therewith. In case this Security has
matured or is about to mature and shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer
may, subject to the Payment Restrictions, instead of issuing a substitute Security, pay or authorize the
payment of the same (without surrender thereof except if this Security is mutilated or defaced) upon compliance
by the registered holder with the provisions of this paragraph 13 as hereinabove set forth.

                  14.       Section 11 of the Fiscal Agency Agreement, which Section is hereby incorporated
mutatis mutandis by reference herein, provides that, with certain exceptions as therein provided and with the
consent of the holders of a majority of the principal amount of the outstanding Securities present at a meeting
duly called pursuant thereto or by written consent of such percentage of the principal amount of all
outstanding Securities, the Issuer and the Fiscal Agent may, with the prior approval of the Superintendent,
modify, amend or supplement the Fiscal Agency Agreement or the terms of the Securities or may give consents or
waivers or take other actions with respect thereto. Any such modification, amendment, supplement, consent,
waiver or other action shall be conclusive and binding on the holder of this Security and on all future holders
of this Security and of any Security issued upon the registration of transfer hereof or in exchange heretofore
or in lieu hereof, whether or not notation thereof is made upon this


                                                      16



Security. The Fiscal Agency Agreement and the terms of the Securities may, with the prior approval of the
Superintendent, be modified or amended by the Issuer and the Fiscal Agent, without the consent of any holders
of Securities, for the purpose of (a) adding to the covenants of the Issuer for the benefit of the holders of
Securities, or (b) surrendering any right or power conferred upon the Issuer, or (c) securing the Securities
pursuant to the requirements hereof, thereof or otherwise, or (d) evidencing the succession of another
corporation to the Issuer and the assumption by such successor of the covenants and obligations of the Issuer
herein and in the Fiscal Agency Agreement as permitted by the Securities and the Fiscal Agency Agreement, or
(e) modifying the restrictions on, and procedures for, resale and other transfers of the Securities to the
extent required by any change in applicable law or regulation (or the interpretation thereof) or in practices
relating to the resale or transfer of restricted securities generally, or (f) accommodating the issuance, if
any, of Securities in book-entry or certificated form and matters related thereto which do not adversely affect
the interest of any Security holder in any material respect, or (g) curing any ambiguity or correcting or
supplementing any defective provision contained herein or in the Fiscal Agency Agreement in a manner which does
not adversely affect the interest of any Securityholder in any material respect, or (h) effecting any amendment
which the Issuer and the Fiscal Agent may determine is necessary or desirable and which shall not adversely
affect the interest of any Security holder, to all of which each holder of any Security, by acceptance thereof,
consents.

                  15.       Holders of Securities may enforce the Fiscal Agency Agreement or the Securities
only in the manner set forth below.

                  (a) In the event that any state or federal agency shall obtain an order or grant approval for
the rehabilitation, liquidation, conservation or dissolution of the Issuer, the Securities will upon the
obtaining of such an order or the granting of such approval immediately mature in full without any action on
the part of the Fiscal Agent or any holder of the Securities, with payment thereon being subject to the Payment
Restrictions, and any restrictions imposed as a consequence of, or pursuant to, such proceedings.
Notwithstanding any other provision of this Security or the Fiscal Agency Agreement, in no event shall the
Fiscal Agent or any holder of the Securities be entitled to declare the Securities to immediately mature or
otherwise be immediately payable.

                  (b) In the event that the Superintendent approves in whole or in part a payment of any
principal of, interest on or Redemption Amount with respect to any Securities and the Issuer fails to pay the
full amount of such approved payment on the date such amount is scheduled to be paid, such approved amount will
be immediately payable on such date without any action on the part of the Fiscal Agent or any holder of
Securities. In the event that the Issuer fails to perform any of its other obligations hereunder or under the
Fiscal Agency Agreement, each holder of the Securities may pursue any available remedy to enforce the
performance of any provision of such Securities or the Fiscal Agency Agreement; provided, however, that such
remedy shall in no event include the right to declare the Securities immediately payable, and shall in no
circumstances be inconsistent with the provisions of Section 1307. A delay or omission by any Security holder
in exercising any right or remedy accruing as a result of the Issuer's failure to perform its obligations
hereunder or under the Fiscal Agency Agreement and the continuation thereof shall not impair such right or
remedy or constitute a waiver of or


                                                      17



acquiescence in such non-performance by the Issuer. To the extent permitted by law, no remedy is exclusive of
any other remedy and all remedies are cumulative.

                  (c)       Notwithstanding any other provision of this Security or the Fiscal Agency
Agreement, the right of any holder of Securities to receive payment of the principal of and interest on such
holder's Securities on or after the respective Scheduled Interest Payment Dates or Scheduled Maturity Date
expressed in such Securities, or to bring suit for the enforcement of any such payment on or after such
respective Scheduled Interest Payment Dates or Scheduled Maturity Date, in each case subject to such payment on
such dates having received the approval of the Superintendent pursuant to the Payment Restrictions, including
the approval of the Superintendent pursuant to Section 1307, is absolute and unconditional and shall not be
impaired or affected without the consent of the holder.

                  16.       No reference herein to the Fiscal Agency Agreement and no provision of this
Security or of the Fiscal Agency Agreement shall alter or impair the obligation of the Issuer, subject to the
Payment Restrictions, to pay the principal of, interest on and Redemption Amount with respect to this Security
at the times, place and rate, and in the coin or currency, herein prescribed.

                  17.       THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REFERENCE TO CONFLICTS OF LAWS PROVISIONS.















                                                      18


                                                                                                     EXHIBIT D

                                  FORM OF TRANSFER CERTIFICATE FOR EXCHANGE OR
                                        TRANSFER OF RESTRICTED SECURITY
















                                                      D-1



                                          FORM OF TRANSFER CERTIFICATE
                                          FOR EXCHANGE OR TRANSFER OF
                                         RESTRICTED DEFINITIVE SECURITY
                                 (Transfers and exchanges pursuant to § 6(b)
                                        of the Fiscal Agency Agreement)


The Bank of New York, as Fiscal Agent
101 Barclay Street
Floor 8 West
New York, New York 10286
Attention:   Corporate Trust Trustee
             Administration

               Re:      Phoenix Life Insurance Company 7.15% Surplus
                        Notes scheduled to mature on December 15, 2034 (the "Securities")

               Reference is hereby made to the Fiscal Agency Agreement, dated as of December 15, 2004 (the
"Fiscal Agency Agreement") between Phoenix Life Insurance Company, as Issuer, and The Bank of New York, as
Fiscal Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Fiscal
Agency Agreement.

               This letter relates to $[       ] principal amount of Restricted Definitive Securities held in
definitive form by [insert name of transferor] (the "Transferor"). The Transferor has requested an exchange or
transfer of such Securities.

               In connection with such request and in respect of such Securities, the Transferor does hereby
certify that (check one of the following):

               [ ] (i) such Securities are owned by the Transferor and are being exchanged without transfer, or

               [ ] (ii) such transfer is being effected pursuant to and in accordance with Rule 144A, Rule 144,
Rule 903 or Rule 904 under the United States Securities Act of 1933, as amended (the "Act"), or

               [ ] (iii) subject to the prior approval of the Superintendent of Insurance of the State of New
York (the "Superintendent"), such transfer is being made to the Issuer or an Affiliate of the Issuer (within
the meaning of the Act),

               I.   if the transfer is being effected pursuant to and in accordance with Rule 144A under the
         Act, that the Securities are being transferred to a person that the Transferor reasonably believes is
         purchasing the Securities for its own account, or for one or more accounts with respect to which such
         person exercises sole investment discretion, and such person and each such account is a "qualified
         institutional buyer" within the meaning of Rule 144A, in each case in a transaction meeting the
         requirements of Rule 144A and in accordance with any applicable securities laws of any state of the
         United States or any other jurisdiction; or



               II.  if the transfer is being effected pursuant to Rule 144, the Securities are being
         transferred in a transaction in accordance with Rule 144; or

               III. if the transfer is being effected pursuant to Rule 903 or 904:

                    (1)   the offer of the Securities was not made to a person in the United States;

                    (2)   either:

                          (A) at the time the buy order was originated, the transferee was outside the United
                    States or the Transferor and any person acting on its behalf reasonably believed that the
                    transferee was outside the United States, or

                          (B) the transaction was executed in, on or through the facilities of a designated
                    offshore securities market and neither the Transferor nor any person acting on its behalf
                    knows that the transaction was pre-arranged with a buyer in the United States;

                    (3)   no directed selling efforts have been made in contravention of the requirements of
               Rule 903(b) or 904(b) of Regulation S, as applicable; and

                    (4)   the transaction is not part of a plan or scheme to evade the registration
               requirements of the Act; or

               IV.  if the transfer is being made to the Issuer or an Affiliate of the Issuer (within the
         meaning of the Act):

                    (1)   such transfer has been approved by the Superintendent; and

                    (2)   such transfer is being made pursuant to an available exemption from registration under
               the Act.


                                                       2


               This Certificate and the statements contained herein are made for your benefit and the benefit
of the Issuer. Terms used in this certificate and not otherwise defined in the Fiscal Agency Agreement have the
meanings set forth in Rule 144A, Rule 144 or Regulation S under the Act.


                                            [Insert Name of Transferor]


                                            By:                                     
                                                Name:
                                                Title:

Dated:                 ,       

cc:   Phoenix Life Insurance Company

EX-99.12

                                                                                                     Exhibit 12

STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
($ amounts in millions)
Years Ended December 31, 2004, 2003, 2002, 2001, and 2000

                                                                 2004      2003      2002      2001     2000
                                                               --------  --------  --------  -------- --------

Income (loss) from continuing operations before income taxes,
 minority interest and earnings attributed to mandatorily
 redeemable noncontrolling interests (1)                        $ 151.5   $  (8.2)  $(191.7)  $(253.5) $ 165.1

Less:  Equity in earnings (losses) of venture capital
       partnership investments                                    19.3      36.2     (59.3)    (84.5)   277.3

Add:   Distributed earnings of affiliates                          1.5       1.2       4.6       6.9      5.6
       Distributed earnings of venture capital
       partnership investments                                    50.4      31.8      14.2      30.5    222.4
                                                               --------  --------  --------  -------- --------

Income (loss) from continuing operations before income taxes,
 minority interest and equity in undistributed
 earnings of affiliates and venture capital
 partnership investments                                       $ 184.1   $ (11.4)  $ (113.6) $(131.6) $ 115.8
                                                               ========  ========  ========= ======== ========

Fixed Charges:
 Interest expense on indebtedness (2)                           $  40.8   $  39.6   $   31.4  $  27.3  $  32.7
 Stock purchase contract adjustment payments                       8.2       8.2        1.0      0.0      0.0
 Rental expense                                                    3.5       3.8        4.0      4.4      4.7
                                                               --------  --------  --------  -------- --------
Fixed charges, exclusive of interest credited on policyholder
 contract balances                                             $  52.5   $  51.6   $   36.4  $  31.7  $  37.4
 Interest credited on policyholder contract balances             195.3     207.9      181.4    133.2    109.5
                                                               --------  --------  --------  -------- --------
Total fixed charges, inclusive of interest credited on
 policyholder contract balances                                $ 247.8   $ 259.5   $ 217.8   $ 164.9  $ 146.9
                                                               ========  ========  ========  ======== ========

Income (loss) from continuing operations before income taxes,
 minority interest, equity in undistributed
 earnings of affiliates and venture capital
 partnership investments and fixed charges                     $ 431.9  $ 248.1    $ 104.2   $  33.3  $ 262.7
                                                               ======== ========   ========  ======== ========

Ratio of earnings to fixed charges                                 1.7      -          -         -        1.8
                                                               ======== ========   ========  ======== ========

Additional earnings required to achieve 1:1 ratio coverage     $   -    $  11.4    $ 113.6   $ 131.6      -
                                                               ======== ========   ========  ======== ========


SUPPLEMENTAL RATIO - ratio of earnings to fixed charges
exclusive of interest credited on policyholder contract balances:

Income (loss) from continuing operations before income taxes,
 minority interest and equity in undistributed
 earnings of affiliates and venture capital
 partnership investments                                       $ 184.1  $ (11.4)   $(113.6)  $(131.6) $ 115.8
                                                               ======== ========   ========  ======== ========

Fixed Charges:
 Total fixed charges, as above                                 $  52.5  $  51.6    $  36.4   $  31.7  $  37.4
                                                               ======== ========   ========  ======== ========

Income (loss) from continuing operations before income taxes,
 minority interest and equity in undistributed
 earnings of affiliates and venture capital partnership
 investments and fixed charges                                 $ 236.6  $  40.2    $ (77.2)  $ (99.9) $ 153.2
                                                               ======== ========   ========  ======== ========

Ratio of earnings to fixed charges                                 4.5      -          -         -        4.1
                                                               ======== ========   ========  ======== ========

Additional earnings required to achieve 1:1 ratio coverage     $   -    $  11.4    $ 113.6   $ 131.6  $   -
                                                               ======== ========  =========  ======== ========



(1) Earnings attributed to mandatorily redeemable noncontrolling interests included in Other operating expenses
for the years 2004 through 2000 were $14.3 million, $12.0 million, $11.9 million, $6.9 million, and $5.6
million respectively.

(2) Interest expense on collateralized obligations is not included as these are non-recourse liabilities to
Phoenix and the interest expense is solely funded by assets pledged as collateral consolidated on our balance
sheet.

EX-99.23

                                                                                                     Exhibit 23

                            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Registration
No. 333-101629), Form S-3 (Registration No. 333-99871), Form S-8 (Registration No. 333-122701) and Form S-8
(Registration No. 333-75346) of The Phoenix Companies, Inc. of our report dated March 8, 2005 relating to the
consolidated financial statements, management's assessment of the effectiveness of internal control over
financial reporting and the effectiveness of internal control over financial reporting, which appears in this
Form 10-K.

/s/ PricewaterhouseCoopers LLP

Hartford, Connecticut
March 11, 2005

EX-99.31.1

                                                                                                  Exhibit 31.1
                                                       CERTIFICATION


        I, the Chairman, President and Chief Executive Officer of The Phoenix Companies, Inc. (the “issuer”),
certify that:

        1. I have reviewed this report on Form 10-K of the issuer;

        2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

        3. Based on my knowledge, the financial statements, and other financial information included in this
annual report, fairly present in all material respects the financial condition, results of operations and cash
flows of the issuer as of, and for, the periods presented in this report;

        4. The issuer’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and
have:

        a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the issuer, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;

        b) designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

        c) evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

        d) disclosed in this report any change in the issuer’s internal control over financial reporting that
occurred during the issuer’s most recent fiscal quarter (the issuer’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to materially affect, the issuer’s
internal control over financial reporting; and

        5. The issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s
board of directors (or persons performing the equivalent functions):

        a) all significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record,
process, summarize and report financial information; and

        b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the issuer’s internal control over financial reporting.

Date: March 8, 2005                                                   /s/ Dona D. Young
                                                         ----------------------------------------------------------
                                                         Dona D. Young
                                                         Chairman, President & Chief Executive Officer

EX-99.31.2

                                                                                                EXHIBIT 31.2

                                                 CERTIFICATION

         I, the Chief Financial Officer of The Phoenix Companies, Inc. (the "issuer"), certify that:

         1. I have reviewed this report on Form 10-K of the issuer;

         2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

         3. Based on my knowledge, the financial statements, and other financial information included in this
annual report, fairly present in all material respects the financial condition, results of operations and cash
flows of the issuer as of, and for, the periods presented in this report;

         4. The issuer's other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and
have:

         a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the issuer, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;

         b) designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

         c) evaluated the effectiveness of the issuer's disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and

         d) disclosed in this report any change in the issuer's internal control over financial reporting that
occurred during the issuer's most recent fiscal quarter (the issuer's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to materially affect, the issuer's
internal control over financial reporting; and

         5. The issuer's other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the issuer's auditors and the audit committee of the issuer's
board of directors (or persons performing the equivalent functions):

         a) all significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the issuer's ability to record,
process, summarize and report financial information; and

         b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the issuer's internal control over financial reporting.

Date:        March 8, 2005                                                /s/ Michael E. Haylon
                                                       ________________________________________________________
                                                         Michael E. Haylon
                                                         Chief Financial Officer

EX-99.32

                                                                                                     EXHIBIT 32

                                                 CERTIFICATION

                                   PURSUANT TO 18 UNITED STATES CODE § 1350

         The undersigned hereby certify that the Annual Report on Form 10-K for the fiscal year ended December
31, 2004 of The Phoenix Companies, Inc. (the "Company") filed with the Securities and Exchange Commission on
the date hereof fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 and that the information contained in such report fairly presents, in all material respects, the
financial condition and results of operations of the Company.

     /s/ Dona D. Young                                    /s/ Michael E. Haylon                    
Name:    Dona D. Young                               Name:    Michael E. Haylon
Title:   Chairman, President &                       Title:   Chief Financial Officer
         Chief Executive Officer
Date:    March 8, 2005                               Date:    March 8, 2005