18 Dec '02 - Letter from Equitable to EMAG

18th December, 2002

Dear Mr Henney,

Re: Vanni Treves

Thank you for your letter of 29 November, which the non-executive directors have now considered. As the Society's two senior non-executive directors, it is appropriate that we respond to you.

You propose that Vanni Treves should stand aside and be replaced by an executive chairman. We profoundly disagree. Since taking office in March 2001 Vanni Treves has made an invaluable and immeasurable contribution to the affairs of the Society on behalf of policyholders. Hehas led the Society during a period of unique complexity with total commitment, tireless energy and an open mind to all views. At each of the AGMs he has received an impressive endorsement from the overwhelming majority of policyholders. He has throughout demonstrated his accessibility through public meetings, road-shows, correspondence, his readiness to appear on TV and radio and to give interviews to the often less than sympathetic and understanding media.

You should be in no doubt that the chairman and chief executive command our total and unreserved support. The board as a whole is equally determined to continue acting in the best interests of policyholders. The board consists of individuals who collectively bring an unusually wide experience to bear upon the many difficulties which have to be addressed. In doing so we have invariably encountered significant legal, regulatory and practical restraints which have limited our options. The policies adopted by the Society are those which have been determined unanimously after consultation, advice, detailed analysis and thorough debate.

Accordingly the executive and non-executive directors are of one mind that it would be folly to change the chairman or his role.

Finally, may we respectfully suggest that it would be in the interest of all concerned if future letters from you and your organisation were to be expressed in less antagonistic terms. The personal nature of your attacks is unjustified, unnecessarily confrontational and inhibits the possibility of a more constructive dialogue.

Yours sincerely