Update on Standard Life’s Strategic Review: The Standard Life Group has approved the domestication of its Canadian Operations

MONTREAL, July 2, 2004 – The Standard Life Group, based in Edinburgh, Scotland, announced today that the UK board of Directors has approved a transfer of its Canadian Operations from its branch in Canada to its wholly-owned Canadian subsidiary, the Standard Life Assurance Company of Canada (Standard Life Canada). The target date for the completion of the transfer of business process, or domestication, is January 1st, 2005.

Under this process, substantially all Standard Life’s Canadian Operations would be transferred to Standard Life Canada, a company incorporated under the Insurance Act (Canada) and a wholly-owned subsidiary of the parent company, The Standard Life Assurance Company, of the United Kingdom. Afterwards, a new Canadian holding company will be created to hold all of Standard Life’s Canadian subsidiaries, including Standard Life Canada.

The domestication process, which is subject to the approval of the Office of the Superintendent of Financial Institutions (OSFI), will allow the Company to restructure its capital and to create a holding company structure. This new structure will provide Standard Life with greater flexibility in the management of its future capital needs, at reduced costs.

All of Standard Life’s Canadian group and individual policies, with the exception of a relatively small number of participating policies formerly offered in Canada, will be transferred to Standard Life Canada. The participating policies will remain in the branch. This process will have no impact on any of Standard Life’s Canadian policyholders or the security of their policies.

Mr. Claude Garcia, President of the Canadian Operations of Standard Life indicated that “the transfer of business will enhance the competitive position of Standard Life Canada, as the reduced cost of capital will help us to pursue our overall growth plan and meet the objectives of our business plan.”

Finally, the process is intended to minimize the demutualization tax impact on the Company prior to the implementation of the demutualization proposal, which is to be presented to members at the 2006 Annual General Meeting. If the demutualization proposal is accepted, it would then be more tax efficient for the Company to have domesticated in Canada prior to demutualization.

The domestication initiative confirms the Board of Directors’ decision to keep Standard Life’s Canadian Operations within the Group with the intent of further developing its operations. “I strongly believe that the change will be well received by our stakeholders who will see in Standard Life Canada a new, distinct and prudently capitalized entity whose financial strength is based primarily on its own Canadian business outlook,” concluded Mr. Garcia.

In Canada, The Standard Life Assurance Company and its affiliated companies have $33.1 billion in assets under management. The Company offers a wide range of financial products, including group savings and retirement, group insurance, individual life insurance, savings and retirement, and mutual funds. We also provide portfolio management and real estate and mortgage investment services. Total premium income and deposits reached $3.9 billion in 2003 with over 1.1 million clients. ( www.standardlife.ca )

The Standard Life Assurance Company, founded in Edinburgh (Scotland) in 1825, is a mutual Company. However, the Company’s status is under review and demutualisation is a possible outcome. The Company has $206.3 billion in assets under management and over 5 million customers around the world. ( www.standardlife.com )