TC91237(0816)3 Cat No 64355 (0816)

2016 CORPORATE

SOCIAL RESPONSIBILITY

REPORT

Our VisionTo bring peace of mind to everyone we touch.

Our MissionKeeping our promises.

Our mission is simple, to deliver on our promises each and every day. Our job since day one has been to create a better future for every customer through innovative fi nancial solutions. We pledge to continue to keep those promises and to deliver on those commitments. Our long record of fi nancial strength and our reputation for integrity have enabled National Life Group to deliver on millions of promises. We pledge to deliver on ours to you, too.

National Life Group has a 168 year history with a fresh perspective and a strong commitment to the future.

Our ValuesDo good. Be good. Make good.

Our corporate values are simple: Do good. Be good. Make good. Only six words. But they truly defi ne who we are. They refl ect the principles that guide us in all that we do. Whether it is helping to do good through our charitable foundation, being good at what we do so we can provide the most comprehensive and competitive products for our clients, or simply making good on our promises. At the end of each day, that’s our yardstick. Judged not by how well we do for ourselves but how much good we do for our customers and each other.

Corporate Social ResponsibilityThis report is a demonstration of our overarching corporate social responsibility (“CSR”) strategy and commitment. Reporting on National Life Group’s CSR eff orts provides an opportunity to see inside the company, to highlight where we have been, where we are, and where we are going. More importantly, it shows how we at National Life Group strive to achieve our vision, fulfi ll our mission, and live our values with everything we do.

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LETTER FROM MEHRAN

My guiding principle in life – Respect All – came from my father. I learned servant leadership from him. His philosophy was to respect everyone, no matter who they are, what town they come from, what they do or what is their spirituality. You respect all. My mother and my father had such an authentic respect and love for those they worked with and those within their community.

I came to this country from Iran as a teenager and many of my views have been colored by that immigrant experience and perspective. I have tremendous respect, for example, for the founding fathers of this country. They were leaders with a powerful yet simple vision. There are lessons for us all in how they crafted the Constitution of this brand new country – keeping the document simple and yet able to stand the test of time.

As CEO of National Life I have worked hard to keep the vision, mission and values of National Life Group as simple as possible. Our value statement is made up of six words: Do Good. Be Good. Make Good. Everyone in our company knows our value statement and lives by it. The beauty of Do Good, Be Good, Make Good, is that it talks about our intentions, our actions and our outcomes. All in six words.

Once you decide that you will live your life with a servant’s heart, once you decide that you will respect all, then it becomes second nature to apply those values to everythingin your life.

That’s why National Life is a leader in environmental sustainability. Our initiatives in solar, biomass heating, alternative transportation all grow out of respect for our planet. We must be responsible stewards.

That’s why National Life is a leader in doing good in the communities we serve. Our core values require us to do everything we can to strengthen our communities. Grants to non-profi ts by the National Life Charitable Foundation and company-paid volunteer time are two of the most visible ways we Do Good in our communities.

Taking a long-term view is something National Life has been doing since 1848. Our company is built on the conceptof sustainability; that we will be here 10, 20, 50 years down the road to deliver on promises we make today.

Sustainability is part of our DNA. Our business requires us to focus on the future, to think long term. Our company’sroots in Vermont give us a keen appreciation for our environment and our natural resources.

As the president and chief executive offi cer of a 168-year-oldcompany I appreciate the stewardship opportunity I have been given. My job is to never lose sight that I have been entrusted with something very special, an organization that was chartered in 1848 and has survived the Civil War, two World Wars, the Great Depression, and many other challenges. That sense of stewardship, that long view, also colors my view of corporate responsibility to our employees, to our communities, and to our planet.

I am very proud of our company. And I am very excited to share our story of corporate responsibility with you.

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National Life Group is a company with a cause. Our cause is a very simple one, directed at the people who live and work on America’s Main Streets: To do good in our communities and with the individual families we serve. Jackie and Kevin Freiberg’s latest book, Cause! features mission-driven companies, including our own. To quote Jackie Freiberg, “This book is a reminder of what it means to be part of something special . . . a company grounded in LOVE and a community of peoplewho are committed to a cause to make the world better.” We’re proud to be featured.

Our cause is not new and it has deep roots. The National Life Group story dates back to 1848 with the founding of National Life Insurance Company in Montpelier, VT. Since then, the Group has grown to include Life Insurance Company of the Southwest, established in 1955; Equity Services, Inc.; and Sentinel Investments.

Throughout our 168 year history, we have never lost sight of the needs of our customers. An industry innovator, we develop life insurance, annuity, and investment products for our customers – individuals, young families, small business owners, and educators. Our agents provide fi nancial solutions such as estate and business succession and retirement planning strategies, deferred compensation plans, and other key executive benefi t plans. Our place is Main Street,

not Wall Street, where we strive to bring peace of mind to everyone we touch. That is our commitment to our customers. That is our cause.

Learn more by going to our 2015 Annual Report.

1 Consolidated results of the National Life Group companies, which include National Life Insurance Company, Life Insurance Company of the Southwest, Addison, TX, Equity Services, Inc., Sentinel Investments, and NLV Financial Corporation. National Life Group is a trade name representing various affi liates that off er a variety of fi nancial service products. Each company of National Life Group is solely responsible for its own fi nancial condition and contractual obligations. Sentinel Investments is the unifying brand name for the Sentinel Financial Services Co., Sentinel Asset Management, Inc., and Sentinel Administrative Services, Inc. Sentinel Funds are distributed by Sentinel Financial Services Company, Member FINRA, One National Life Dr., Montpelier, VT 05604 (800) 233-4332. Equity Services, Inc., Member FINRA/SIPC, is a broker/dealer and registered investment adviser. National Life Insurance Company is licensed to do business in all 50 states and the District of Columbia. Life Insurance Company of the Southwest, Addison, TX is licensed to do business in 49 states and the District of Columbia. It is not licensed to do business in the state of New York. National Life Distribution, LLC also conducts business as National Life or, in some states, National Life Insurance Agency. All companies referenced are affi liated and located in Montpelier, VT unless otherwise indicated.

CORPORATE PROFILE

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Our Operations

As of December 31, 2015, National Life Group1

had $31.1 billion of assets under management and served in excess of 829,000 customers. At year-end, approximately $21.5 billion was attributable to life insurance policy and annuity contract values with more than 724,000 policy and contract holders. Approximately $6.1 billion was attributable to mutual fund and other client-managed assets representing approximately 105,000 customers. The remainder was attributable to the corporate segment, including the fair value for the investment portfolio, the disability income business, and company-sponsored pension plans.

At the end of the 2015 fi scal year, National Life Group’s capital and statutory surplus totaled approximately $1.9 billion. This is an important reserve that helps ensure company stability, and ensure that we can meet the commitments we make to our clients.

Insurance Financial Strength RatingsFor National Life Insurance Company and Life Insurance Company of the Southwest as of August 1, 2016.

A.M. Best – A (Excellent)It is the third highest of sixteen rankings.

Standard & Poor’s – A (Strong)The sixth highest of the 21 categories used by S&P.

Moody’s – A2 (Good)The sixth highest of 21 categories.(Ratings are subject to change.)

Ratings RationaleAccording to Moody’s Vice President – Senior Analyst, Shachar Gonen, “The affi rmation of National Life Group’sratings and stable outlook are based on the company’s growing life insurance franchise, consistent profi tability, and well performing investment portfolio. In addition, the company’s capital levels are strong and expected to remain at solid levels.”2

2 Press Release dated July 29, 2015, https://www.moodys.com/research/Moodys-affi rms-NLV-Financial-Baa2-sr-debt-stable-outlook--PR_330631

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Sentinel Asset Management, Inc. Signs United Nations-Supported Principles for Responsible Investment

Sentinel Asset Management, Inc. has recently joined 1,500 other asset owners, investments managers, and service providers worldwide in signing the United Nations-supported Principles for Responsible Investment (PRI). PRI is recognized as the leading global network for investors and fi nancial industry participants who are committed to integrating environmental, social, and governance considerations into their investment practices and ownership policies. By becoming signatories to the PRI, Sentinel has demonstrated its on-going commitment to responsible capital stewardship and good corporate citizenship.

“We are delighted to welcome Sentinel Asset Management to the PRI. They have long demonstrated a commitment to ESG [ environmental, social and governance ] and sustainability issues and are an excellent example of investment managers who understand that taking a long-term view of the market, which looks at ESG considerations, can lead to attractive returns for investors.”

Fiona Reynolds, Managing Director of PRI3

3 Press release dated March 24, 2016, https://www.NationalLife.com/OurValues?id=8589948401

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At National Life Group, we have over 1,000 employees who, through teamwork, respect, integrity, and diligence, exemplify our “Do Good. Be Good. Make Good.” values.

COMMITMENTTO OUR PEOPLE

Gallup Q12 Survey

National Life Group is committed to sustaining high employee engagement and actively listening to the voice of our colleagues. In 2015, we introduced the acclaimed Gallup Q12 Employee Engagement survey. The survey consists of 12 questions that Gallup developed and tested over decades of research to measure employee engagement. The Gallup Q12 is a benchmark globally used by thousands of companies.

In 2016, the Gallup Q12 survey was used again which provides the opportunity to measure year-over-year progress. In both years, close to 90% of the employees voiced their opinion. We have been working on initiatives that directly aff ect engagement factors:

• work expectations

• recognition

• development opportunities

• commitment to quality

In 2016, our employee engagement index jumped meaningfully over the already favorable 2015 results, a signifi cant factor in cultivating a work environment where opinions matter, employees can learn, grow and develop, and where the cause-based mission and purpose of the company is fulfi lled by all.

Some factors that were ranked most favorably by employees were:

• overall satisfaction with the company

• having someone to discuss progress with

• having a best friend at work

• opportunities to learn and grow

• having someone at work who cares

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Employee Development and Training

NLGroup UniversityNLGroup University is the company development and training program, which provides a wide variety of learning opportunities to Vermont, Texas and virtual employees. These educational programs help employeesacquire skills and competencies needed to execute company strategies, raise their level of performance, and grow professionally.

In 2014, NLGroup University off ered 512 sessions on 217 topics with an attendance of 4,725 employees. In 2015, the educational off erings were 563 sessions on 130 topics with an attendance of 6,352 employees.

NLGroup University courses cover a wide range of topics. Below are some sample course off erings:

Dear World

Dear World is an interactive, award-winning portrait project that unites people by allowing them to share their story or message using temporary body art.

National Life Group participated in the Dear World project in March of 2016. The project was a huge success with National Life Group, allowing employees to share powerful and moving messages not only with each other, but with the rest of the world. National Life Group has been making many strides in recent years to increase the sense of community among employees, and the Dear World project allowed many employees to tear down walls and open up to one another in ways which they otherwise would not have done.

• Coaching for Development • Business Writing

• Just-in-Time Feedback • Customer Experience  

• DiSC Personal Profi le • Women Leadership

• Enterprise Value Initiative • Technology

• Life, Wellness, Fitness    • Living Our Value

Tuition Reimbursement and Continuing EducationNational Life Group off ers a Tuition Reimbursement Program, designed to allow employees to take advantage of opportunities to improve skills needed in present jobs and to prepare for positions of greater responsibility. The program covers any job related undergraduate or graduate courses off ered by an accredited college, university or school. NLGroup University partners with colleges, universities and Ashford University Leadership Grant program to off er aff ordable access to online degrees and certifi cations at the undergraduate and graduate level.

Life Offi ce Management Association (LOMA)National Life Group also supports employees in obtaining certifi cations through the Life Offi ce Management Association (LOMA) for growth within the insurance industry. These courses are 100% paid by National Life Group.

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Employee Recognition: Many Ways to Say “Well Done!”

National Life Group celebrates its employees doing good around the company by identifying and recognizing their accomplishments. Throughout our offi ces, there are brag boards for people to brag about their co-workers and share how they are doing good in the company. This encourages our employees to do the best that they can every day and to recognize others when they are making a difference!

KUDOSOur Kudos Customer Service Award recognizes employeeswho provide exemplary customer service following the tenets of Do Good – Outstanding Achievement; Be Good –Leadership & Teamwork; Make Good – Engagement – all areas that are crucial to our success. A committee of employees representing National Life Group reviews eachnomination and selects the recipient(s). The employee is then celebrated with an in-person presentation at their workstation in front of co-workers, management and Kudos committee members.

SHOUT OUTSHOUT OUT recognizes the outstanding achievement of a group of employees. This recognition is shared with others throughout the organization using a SHOUT OUT board. These boards include a picture of the team and a short write-up about what they did. They are also prominently displayed on both campuses and published in the weekly newsletter.

Above and BeyondAbove and Beyond is another peer to peer recognition program that highlights employees who go “above and beyond” by doing the unexpected for co-workers or clients, or stepping up to meet unplanned work demands.

Milestone AnniversaryThe Milestones service award program recognizes cumulative years of service in fi ve-year employment increments. To recognize this achievement, employees are invited to select a gift from one of our customized catalogues. They also receive a personalized certifi cate presented in an engraved 5” x 7” silver frame.

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The 7 Cs of LeadershipOur CEO Mehran Assadi often talks about the seven “C”s of leadership: comprehension, competency, confi dence, conviction, courage, communications and character. Annually, he recognizes leaders within National Life Group who exemplify these qualities, and in 2015, fi ve leaders were celebrated as part of our leadership conference.

Performance Achievement AwardPerformance Achievement Award (PAA) is a spot cash bonus for outstanding individual eff orts. Mangers use the PAA to reward employees for outstanding contributions during the year.

SPOT-edSPOT-ed is a recognition program that provides each manager with a “toolkit” of ideas for recognizing their employees when they see them doing something good. This type of recognition is intended to be spontaneous, or “on the spot.”

Internship ProgramEvery summer, National Life Group welcomes a group of intelligent and motivated college students to participate in our intern program. In addition to valuable on-the-job training, interns participate in a seminar series to expand their knowledge of the fi nancial services industry, as well as giving them the opportunity of interacting with our executive team and other company leaders. Finally, interns work together in small groups on cross functional projects, culminating in a presentation at the end of the summer.

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Health and Safety

Wellbeing

The wellbeing of the employees at National Life Group has been a long standing priority. Our approach is to Think fi rst, Envision the future, and Connect the dots for all our employee benefi ts. Through unique vendor partnerships and teams of National Life Group employeesworking through various committees, we are able to off er benefi ts and opportunities to our employees which support not only physical health, but emotional, fi nancial, career, social, and environmental wellbeing.

Wellbeing is not just a goal, it is our culture. To focus on the physical health, we have gym facilities on both campuses that provide fi tness classes like yoga and spinning as well as the opportunity to work out with an on-site personal trainer. Other wellness activities include the LIFE (Lifestyle Improvement for Employees) Committee that oversees the company’s fi tness facilities,classes and events, par course, chiropractors, massage therapists, reiki, seminars on various health and wellness topics, participation in the Corporate Cup, company sponsored outings and events, and a yearly Health and Wellness Fair with vendors from around the state.

National Life Group has regularly been awarded the Vermont Governor’s award for Worksite Wellness, and in 2016, was awarded the Wellbeing Award from Cigna New England. The award is given to an employer who is dedicated to building a culture of health and wellness within the workplace. Through the award, Cigna acknowledges that National Life Group actively and positively impacts the overall health and wellbeing of our population.

The Employee Assistance Program and wellness seminars support emotional wellness while the National Life Recreation Committee, volunteer programs, Spirit Committee, Community Garden, Young Professionals Network, and more off er programs to support social wellness. From the National Life Group 401(k) plan, the pension plan, a variety of benefi ts including tuition reimbursement and education programs for fi nancial wellness to our many recognition and reward programs and the NLGroup University for career wellbeing, National Life Group continues to look for ways to support employee wellness.

We strive to provide life balance to our employees. To continue to grow and improve, we align ourselves with partners that have the vision, strength, tools, and resources to help us challenge the way we think. It is partnerships that help National Life Group’s commitmentto our mission of keeping our promises, especially to our employees.

National Life Group partners with the New England Culinary Institute (NECI) to provide healthy food options to employees at our Vermont campus. For all food options, nutrition information is available before purchase. Also, vending machines throughout the building off er alternative options, including cheese and crackers, hummus, yogurt, and water. Additionally, National Life Group provides local farms with the opportunity to drop off fresh food through Community Supported Agriculture (CSA) programs.

“ People who achieve good standards of wellbeing at work are likely to be more creative, more loyal, more productive, and provide better customer satisfaction. Wellbeing comes from a sense of purpose which is the core of our culture. Being part of National Life Group is more than a job, it is a chance to be part of something great, to help others, to ‘experience life.’ Be well.”

Michele Granitz,People Center Director of Benefi ts

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Smoke-Free CampusThe Vermont campus became tobacco-free in July 2016 in hopes of encouraging people to quit smoking and be healthier. National Life will be off ering programs going forward to support and help employees work through this transition time.

SafetyNational Life has both a Corporate Emergency Response Team and a Business Continuity Disaster Recovery Program who work in concert to encourage and support safety awareness and improve enterprise-wide response to business interruption events or local emergencies.

Texas Modernization Project

We have been working to modernize and expand the Texas campus to improve the working environment, increase natural light, and maintain the sense of One Company, One Culture.

General NLG Population

58% 42%

Diversity and Inclusion

Cultivating a diverse and inclusive workforce is critical to the success of National Life Group.

A diverse team provides us with a wide array of diff erent world views that are shaped by myriad experiences, perspectives and cultures. These varying world views breed better decision making and problem-solving thus spurring innovation.

It is for this reason we hire and promote individuals throughout our organization who represent the rich diversity of the world in which we do business.

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National Life Group Foundation

The National Life Group Foundation is a 501(c)(3) non-profi t organization, funded completely by National Life, with the sole purpose of charitable giving. Since its inception in 2006, the goal of the National Life Group Foundation is to do good in the communities in which we live and work by supporting non-profi t and educationalorganizations. We do this in a number of ways, including providing grants through our Foundation, giving our employees 40 hours of paid volunteer time annually, sponsoring events, and off ering in-kind donations.

The Foundation finances over 100 grant requests annually. With an annual budget of $750,000, we fund grants for non-profi ts in central and northern Vermont as well as the Dallas, Texas area where National Life Grouphas campuses. We also support educators through the LifeChanger of the Year program.

In addition, we encourage philanthropy within our company through our annual Community Giving Campaign. This campaign allows National Life Group employees to donate to the 501(c)(3) organizations of their choice through payroll deduction. We then match three of their donations up to $500 through the Foundation. This campaign has grown by 74% from 2014 to 2015.

Corporate Sponsorships

Another way National Life Group supports the communities in which we live and work is through corporate sponsorships. These typically also help non-profi ts do more good for those they serve. In the fi rst six months of 2016, we approved more than fi fty sponsorship requests.

We believe in the benefi ts of strong and vibrant communities. At National Life Group, our goal is to improve the quality of life wherever possible. We do this through the work of our Foundation, as well as through the volunteer time of our employees. We have developed strong relationships with non-profi t organizations, such as COTS (Committee on Temporary Shelter serving Vermont), Vermont Foodbank, North Texas Foodbank, Communities in Schools, and many others.

COMMITMENTTO OUR COMMUNITIES

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Volunteerism

Each National Life Group employee is encouraged to take 40 hours of company-paid volunteer time annually. One of our largest volunteer events happens in early spring, when we have our volunteer day to encourage our employees to get out and do good in our local communities. In 2016, we expanded the day to a week and included events with both our Vermont andTexas community partners. More than 150 volunteers participated in this event which included a number of non-profi ts that we regularly support, donating more than 600 hours of volunteer time.

4,035hours

of volunteer worktotal donated during 2015

“ I’ve served as a volunteer for numerous organizations, including Meals on Wheels, the Vermont Food Bank, Home Health and Hospice, The Red Cross, and the Humane Society. There are so many wonderful organizations that need our help, and I’m proud to work for a company that provides its employees with every opportunity to Do Good in our community. Becoming a volunteer will not only touch the lives of others, but your own life as well!”

Kris Clark, Financial Analyst IV, Corporate Actuarial

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Do Good Fest

National Life Group organized its third annual Do Good Fest in 2016. This benefi t concert supports Branches of Hope, the Cancer Patient Fund at Central Vermont Medical Center’s National Life Cancer Treatment Center.

This year we showcased Big Head Todd & The Monsters, Brett Dennen, Steady Betty, and Dave Keller Band. Additionally, the day-long event featured two dozen local non-profi ts, local food vendors, and activities for families. Over the fi rst two years, we welcomed over 4,500 guests and raised over $26,000 for Branches of Hope. In 2016, we broke records for attendance and for doing good, attracting more than 5,000 people and raising $30,000.

“ If we didn’t have it I don’t know what we would’ve done. In all reality Branches of Hope gave us the ability to live. It saved us.”

Amy HillRecipient of aid from Branches of Hope

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LifeChanger® of the Year

We are dedicated to giving back to the communities in which we serve through corporate initiatives like our LifeChanger of the Year Program. This program recognizes outstanding teachers and school district employees who are making a diff erence in the lives of today’s students.

In the 2015-2016 program cycle, we received more than 620 nominations from all 50 states and the District of Columbia. We were humbled by the selfl ess dedication and passion of so many educators and school employees.

After the exceptionally difficult task of paring the nominations down based on set criteria, a panel comprised of past winners and education leaders chose our 15 winners, including our grand prize winner and fourgrand prize fi nalists. In April 2016, we proudly announced that Shane Thill, Assistant Principal of Mitchell High School and Director of the Second Chance program in Mitchell, South Dakota was awarded the grand prize of $10,000, which was split between a $5,000 individual award and a matching $5,000 donation to his school.

Harpoon Point to Point

The Harpoon Point to Point is a charity cycling event presented by National Life Group. This bike event raises awareness and funds for the Vermont Foodbank, which aims at ending the problem of hunger in Vermont. Over the years, the event has raised over $1.1 million. The Harpoon Point to Point gives an opportunity to riders looking for a challenge with a 25, 50, or 100 mile road ride, or a 20 mile mountain bike ride, while raising money to contribute to a great cause.

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Our four fi nalists included Amanda Reyes of Georgetown,Texas; Dennis Kass of Chicago, Illinois; Marla Cosner of Ridgecrest, California; and Theresa Barkhimer of Shawnee,Oklahoma. Each fi nalist received a cash prize of $5,000 to be split with their school and, along with grand prize winner Shane Thill, were recognized at an awards ceremony during the annual LifeChanger excursion in Los Cabos, Mexico.

Ten additional LifeChanger awards were given out to educators across the country with cash prizes of $3,000 split between winners and their schools.

A 16th award, new this year, was given out to a nominee who not only met the LifeChanger criteria but whose community showed tremendous support for her nomination. The LifeChanger Spirit Award was givento Dana Ford during a celebration at her school in New Site, Alabama. The prize, which was $5,000 for Dana and her school, recognized the spirit that the school community had for Dana and her nomination.

Learn more by going to

National Life Group LifeChanger of the Year

We are dedicated to giving back to the communities in which we serve.

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LEED Certification

In 2009, the US Green Building Council (USGBC) awarded National Life Group Silver Certification in the Leadership in Energy and Environmental Design, Existing Building (LEED-EB) program for our eff orts in renovating the Montpelier campus to improve energy effi ciency, generate solar power, and reduce waste during operation. The LEED-EB program is a nationally recognized certifi cation for fi rms and individuals that strive to minimize the impact of daily business practices and activities on the natural environment.

The LEED certifi cation is a voluntary standard that

identifi es buildings meeting rigorous criteria based on

effi ciency, energy usage, and waste production. We plan to continue our progress towards carbon neutrality by continuing to build on carbon-off set

programs.

Renewable Energy

Over the years, National Life Group has been committed to expanding its use of renewable energy.

SolarIn 2008, we completed our fi rst major solar project, a 418-panel photovoltaic system that provides solar energyto our Vermont campus. These panels, constructed from high-quality crystalline silicon and installed by local contractors, contribute over 6,000 kilowatts of power to our campus per month.

Complementing the initial solar array, we also installed 20 solar thermal panels that provide energy for approx-imately 50% of the hot water demand for the Montpelier campus. This includes hot water for the restrooms, cafeteria, and dishwashing. In addition, we laid a white membrane roof at our headquarters which reduces energy costs by refl ecting the heat from the sun.

COMMITMENTTO OUR ENVIRONMENT

Our values drive our commitment to environmental stewardship, as we aim to live and work sustainably. We encourage energy effi ciency, renewable energy, recycling and alternate transportation, leading toward a sustainable society.

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SolarGeneration 2014

63,7842015

638,942kilowatt-hours

National Life Group’s newest solar project was installed at the southern end of the Montpelier campus in 2015. The 500 kilowatt project produces 725,000 kilowatt hours of power, which is roughly equivalent to the amount used annually by 125 homes in the city of Montpelier, Vermont. Not only does this new venture make great fi nancial sense, it also underlines our commitment to our community and our environment.

Biomass BurnerWith one of the largest offi ce complexes in Vermont, providing adequate heating to our 500,000 square-foot campus during the harsh winters, while maintaining our commitment to energy effi ciency, is a real challenge. In December of 2010, we were able to address this concernby installing a state-of-the-art, twin-boiler woodchip heating system. This system, consisting of two biomass boilers (7,000,000 Btu and 5,000,000 Btu) and an electrostatic precipitator (ESP), allows for greater fl exibility to run the system more effi ciently with the seasonal changes in heat demand.

The installation exceeded our initial projections of thermal-output from the biomass system, reaching well over 95% after the fi rst winter of operation. We burnt 3,056 tons and 3,512 tons in 2015 and 2014, respectively. With our previous oil-fueled heating system (which is now used as backup), we were consuming about 210,000 gallons of No. 4 heating oil per year.

In keeping with our commitment to recycling, almost 98% all of the waste ash produced by the biomass system is collected using the ESP (without continuous manual ash removal) and emptied biannually. The ash is then transported to local farms, where it is commingled with manure to be used as fertilizers.

Emissions

Maintaining a healthy carbon footprint is something that remains a top priority for National Life Group. We are constantly searching for ways to reduce our impact on the environment. When tracking our emissions, we monitor CO2 output across nine categories, including energy, fuel oil, propane, diesel, accommodations, waste, shipping, ground travel, and air travel. Through various initiatives noted above, we have cut our CO2 emissions by 33% since 2010. The drastic decrease in emissions since that time is largely due to our biomass heating installation, which displaced the demand for high carbon-emitting fuel oil during the winter months. National Life Group reduced its carbon emissions by 4% between 2014 and 2015.

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2,263gallons

2,458gallons

2014: 2015:

Water Use Per Employee

Recycling

At National Life Group, recycling and the proper disposal of waste generated by our Vermont and Texas campuses are key components of our environmental management program. Paper, cardboard, glass, and plastic products all have a place in our comprehensive recycling program. Our kitchen composts all food waste so it can be used as fertilizer. With the help of our employees and maintenance staff , our recycling rate is approximately 70% of total waste production. We are striving to become a zero waste facility, meaning a recycling rate of 90% or greater.

Water Usage

Water usage is also an aspect of our consumption that is closely monitored. In 2009, National Life Group replaced inefficient water taps in our cafeteria and restrooms, and added low-fl ow toilets and reduced our landscaping water footprint signifi cantly.

Alternate Transportation Program

The National Life Group Alternate Transportation Program was established in 2007 to encourage employees to seekalternate ways to travel to work. This was an initiative taken to lessen our contribution to CO2 emissions by automobiles and other forms of transportation.

This innovative program encourages the use of alternate “green” forms of transportation, including walking, biking, carpooling, vanpooling, remote access, and public transit. To further support this eff ort, we matched funds necessary to provide local public transit service on one of the most widely used routes.

National Life Group employees in both Texas and Vermonttake part in RideShare, a transportation program that encourages and facilitates carpooling and vanpooling among its members. By working to cut down on the number of cars and transport vehicles on the road through RideShare, National Life Group demonstrates its commitment to maintaining a healthy environment, both locally and globally.

For our cyclists, a bike repair station was built at the Vermont campus in 2015 to help employees have a smooth daily ride. Loaner bikes are available for those who want to try cycling, or want to run an errand at lunchtime. In the near future, we plan to have 18 bike parking stations out of which six would be fully covered. Finally, National Life has installed four EV charging stations, with the aim of increasing to ten, to promote the use of electronic vehicles amongst our employees.

Total Recycling (lbs)

2014 ...450,7532015 ...514,978

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Key Performance Indicators 2012-2015KEY PERFORMANCE INDICATOR 1 UNIT 2012 2013 2014 2015

Personnel on site2 # 1,564 1,948 1,974 1,998

Building square footage square feet 543,992 543,992 543,992 543,992

Revenue $(000,000) 1,763 2,023 1,960 1,706

Net income $(000,000) 125 142 144 109

Total electricity use mWh 10,362 10,416 9,915 9,200

Electricity use/person mWh/person 6.625 5.347 5.023 4.605

Electricity use/square foot mWh/s.f. 0.019 0.019 0.018 0.017

Electricity use/revenue mWh/$(000,000) 5.877 5.149 5.059 5.393

Total solar generation kWh 75,061 67,972 63,784 638,9423

Total water use gal (000) 6,092 6,354 4,853 4,522

Water use/person gal/person 3,895 3,262 2,458 2,263

Water use/square foot gal/s.f. 11.199 11.680 8.921 8.313

Water use/revenue gal/$(000,000) 3,455 3,141 2,476 2,651

Total CO2 emissions tons 1,377 1,366 2,855 2,741

Emissions/person tons/employee 0.850 0.701 1.446 1.372

Emissions/square foot tons/s.f. 0.003 0.003 0.005 0.005

Emissions/revenue tons/$(000,000) 0.781 0.675 1.457 1.607

Total recycling pounds 589,118 559,010 450,753 514,978

Recycling/person pounds/person 377 287 228 258

Recycling/square foot pounds/s.f. 1.083 1.027 0.829 0.947

Total employees4 # 994

Gender diversity - all % female – – – 58%

Gender diversity - AVP and above % female – – – 24%

1 Unless otherwise noted, all data is for our Montpelier, VT campus

2 Personnel on-site includes our employees as well as contractors and other building tenants

3 The increase in solar generation is due to additional panels installed in 2015 – see page 19 for more information

4 All full-time National Life Group employees across all locations as of 6/30/2016

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Board of DirectorsNational Life Group’s board of directors is comprised of eight independent directors and our president and chief executive offi cer.

Executive ManagementNational Life Group’s executive management team consists of key executives who are dedicated to creating and executing a successful corporate strategy for the company. Meeting weekly, this group discusses objectives to achieve corporate goals, address issues that arise, and evaluate performance. With years of experience across the Group this select team ensures a strong business alignment with excellent communication throughout the company to optimize results.

Leadership

Mr. Mehran AssadiPresident and CEO

Ms. Ruth B. SmithExecutive Vice President, Customer Innovation Group

Mr. Tom BrownellExecutive Vice President, CEO Sentinel Investments

Mr. Bob CottonExecutive Vice President, Chief Financial Offi cer

Mr. Sean N. WoodroffeSenior Vice President, Chief People Offi cer

Mr. Greg WoodworthSenior Vice President, General Counsel

Mr. Tom AnfusoSenior Vice President, Chief Information Offi cer

Mr. Chris GraffVice President, Corporate Communications

Mr. Harris H. Simmons

Mr. Thomas H. MacLeayChairman

Mr. Mehran AssadiPresident and

Chief Executive Offi cer

Ms. Kim Goodman Mr. Bruce Lisman Ms. V. Louise McCarren Dr. Roger B. Porter

Carol A. Carlson Mr. David R. Coates Mr. James H. Douglas

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ABOUT THIS REPORTThis report refl ects National Life Group’s on-going commitment to corporate social responsibility and continuous improvement. It includes a full update of key programs and performance metrics during the period from January 1, 2014 through December 31, 2015. All fi nancial data are presented in accordance with US generally accepted accounting principles (GAAP) unless otherwise noted. Environmental data are for our Montpelier, Vermont campus. This is our third biennial report; our previous reports were published in 2012 and 2014.

Please contact us at CSRcommittee@NationalLife.com with any questions or comments. We welcome your feedback.

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Centralized Mailing Address: One National Life Drive, Montpelier, VT 05604 | 800-732-8939 | www.NationalLife.com

www.NationalLife.com