Good morning ladies and gentlemen and welcome to Genworth Financial, Fourth Quarter Earnings Conference Call. My name is Judy, and I will be your coordinator today. At this time all participants are in a listen-only mode. We will facilitate a question-and-answer session towards the end of this conference call. As a reminder, the conference is being recorded for replay purposes. [Operator Instructions]. I would now like to turn the presentation over to Alicia Charity, Vice President, Investor Relations. Ms. Charity, you may proceed.

Thank you and welcome to Genworth Financial’s Fourth Quarter 2007 Earnings Conference Call. As you know our press release and financial supplement where both released last night and are posted on our website. We also scheduled a conference call for 11 o'clock this morning, where Kevin Schneider, the President of our US Mortgage Insurance business will go into some detail on the US Mortgage Insurance business, including the expected benefits from lender captive reinsurance and provide some stress scenarios designed to answer investor questions around those value. The presentation will be posted at 10 a.m. and the webcast again will begin at 11. We look forward to your participation given the limited events noticed. This morning, you will first hear from Mike Fraizer, our Chairman and CEO and then Pat Kelleher, our Chief Financial Officer. Following our prepared comments, we will open up the call for question-and-answer period. Pam Schutz, Executive Vice President of our Retirement & Protection segment; Tom Mann, Executive Vice President of our International and US mortgage Insurance segment: Kevin Schneider, President of US Mortgage Insurance; Vic Moses, our Chief Actuary as well as other business leaders will be available to take questions. With regard to forward-looking statements and the use of non-GAAP financial information, some of the statements we make during the call today may contain forward-looking statements. Our actual results may differ materially from such statements. We advise you to read the cautionary note regarding forward-looking statements in our earnings release, or the risk factors section of our most recent Annual Report Form 10-K filed with the SEC, and the resegmentation Form 8-K filed with the SEC in April 2007. Today's presentation also includes non-GAAP financial measures that we believe may be meaningful to investors. In our financial supplement, non-GAAP measures have been reconciled to GAAP where acquired in accordance with SEC rules. And finally, when we talked about International segment results, please note that all percent changes exclude the impact of foreign exchange. And with that, let me turn the call over to Mike Fraizer.

Thanks Alicia. In 2007, Genworth delivered 10% operating EPS growth and in the year at $3.07 operating earnings per diluted share versus $2.80 for 2006. Overall, I'd characterize our 2007 performance as mix, while we delivered goodness and disappointed that we fell short of our original earnings goals. This morning I will first share perspectives on 2007, covering core strength and some misses. Then looking to 2008, I will review the market environment and share key priorities. Let's start with the progress we made in 2007, shifting our profile to higher growth, higher return businesses, in particular, fee-based retirement offerings and our international lines. In retirement income, we introduced several new products and executed well on a distribution strategy that focuses on top revenue and profit generating distribution partners. This group of what we call focus firms delivered more than 40% sales growth for the year. In managed money, combining our existing platform with the acquisition of AssetMark has given us a terrific unified approach to the fee-based adviser market. And we will fuel strong growth going forward. We have filed a guaranteed income offering for our managed account platform and see some prospects for expansion here. Turning to international, growth has been substantial. We made sound progress towards our goal of driving half of our earnings from non-US based businesses by the end of the decade with this segment representing 39% of the earnings for the year. More specifically, Canada and Australia mortgage insurance continue to grow from increasing customer penetration. And payment protection saw strong sales growth in continental Europe, plus our expansion into markets including Poland and Mexico brought attractive growth as well. We also made sound progress in driving profitable universal life and new long-term care production, while redeploying capital effectively through both share repurchases and…

[Operator instructions] Your first question comes from the line of Andrew Kligerman with UBS.

Hi, good morning, everyone. Few questions, first with respect to your comments about 10% growth in international and you alluded to some issues in Spain and Italy. What did you say... I mean the loss ratio was a superb 29% in international mortgage insurance. What might we be looking to see during the course of 2008 given your more cautious comments about international?

Thanks, Andrew. Let me turn that over to Tom Mann.

Andrew again as we wrapped up 2008, very pleased with what we saw, we did see an ... Andrew Kligerman – UBS: 2007.

Excuse me, I'm sorry, 2007. Andrew Kligerman – UBS: Sorry [ph], I'm really excited.

Well, I'm excited about 2008 too. I'm sorry about that. We did wrap up 2007 in very good shape. We did have an up tick in our European loss ratio in the fourth quarter. If you focus on the supplement where they provided, it actually touched about 59%. As we look towards next year, we have provided in the outlook or is reflected in the outlook that Mike provided to you. We are looking for continued strong performance in Canada and Australia and we're looking for increased loss ratios in Europe. They do reflect the slowdown that we are seeing in Spain. Andrew Kligerman – UBS: I mean when you say increased in Europe, you are thinking something 100% range like we're seeing in the U.S. or does it sort of stabilize something--.

Andrew, it’s... we currently there... our pricing levels in Europe was about 62% to 65% level. We will expect to see it increase over that next year and we provided that in the outlook. But I'm not going to get into the exact range that we may see there. But, it will be above pricing and I want to remind you that when you think about Europe, it's only about 5% of our global risk in force and Spain is about 2% and so our risk in force in Europe is comparatively small because of very low coverage levels that we have on a prolonged basis there. And as you look at the total European equation, again Canada will be very sound. We're actually expecting Australia to maintain similar levels to 2007, possibly come down. So I think we're going to have a very, very strong global performance in 2008 and again the diversity of the book and the global economy is what we've strived to have to help us offset individual issues that we may have on a country-by-country basis. Andrew Kligerman – UBS: And then, just my other question is with regard to capital. The commentary, the outspread annuity, life insurance, or potential capital redeployment. Could you give us a sense of how much capital you're thinking in aggregate of unlocking and what is there [ph]?

Yes Andrew as we talked about at the Investor Day, we were looking at some blocks that in total add up to about 1.4 billion across some of the life and annuity lines and then look within those and see, what portion of those where tapped any more specifics on that?

No, that's exactly right. Andrew Kligerman – UBS: And you feel like there is some high likelihood this year that you are unlocking some of this?

Again... as you know we unified retirement and protection and put them all under single leadership, early last year and as we did that and integrated all of the teams and the functions, we just took a fresh look, a fresh reassessment of where do you get relative return in, where our opportunities. And as we completed that in the fall time frame, that's where we identified this. So, yes, we work intensively on attacking a portion of that. Andrew Kligerman – UBS: Thanks a lot.

Your next question comes from Darin Arita with Deutsche Bank.

Good morning. Just a question on Canada and on Australia, it sounded like, Genworth is tightening it's underwriting there and I was just wondering if that's a reflection of... seeing any fundamental deterioration in those markets or is it really a response to what's happening on a macro level?

Tom you want to take that?

Hi, Darin it is entirely precautionary, we have not seen a material deterioration in any way, shape or form really in the Australian or the Canadian economies. In fact, Australia, the consensus in Australia is going to be continue to perform very well despite what may happen in the United States environment. But again when we look at the region of this concentrations that we have there and also particularly areas around New South Wales, we want to make sure that we are precautionary and it's really the same story in Canada as well. Canada is a little bit more directly linked to the United States, in other words when we do have slow downs in the U.S., you would see… find it's way to Canada, a little bit more directly. But again the consensus in Canada is per of degree of slow down, nothing immaterial but the moves entirely precautionary.

Thank you, and just a question on capital, it sounds like we're slowing the growth appetite in international here, at least in the mortgage insurance side, so, can we take that, I mean there will be increased excess capital generation in 2008?

At this point in time, we are seeing a bit of a slow down as you described. But at the same time, we're seeing some uncertainty in kind of looking at the U.S. economic environment. So, we haven't updated our projection at this time and will give you a more complete view or more updated view at the first quarter.

Okay, thank you.

Your next question comes from the line of Ed Spehar with Merrill Lynch.

Okay, good morning. I had a few questions. I guess, I'm sorry if I missed it. But in terms of capital, I think you've said you're going to update projections down in the first quarter. What about the... what you said about share buyback, the 500 per year for the next couple of years, is there any change there? Patrick B. Kelleher- Senior Vice President – Chief Financial Officer: Ed, let me give you a couple of perspectives on capital. Again we ended up with about the same capital capacity we talked about at Investor Day, $900 million overall. Going through where we are right now, that's probably roughly $800 million, and now when we look at capital deployment, of course we're going to be selective as I talked about in business where we think it make sense. So we will first go there. When it comes to the share buyback, we bought back at this point probably about $100 million worth of shares that we will do that gradually as we have see the… see it making sense in the market. I would rather use for example capital from lower return blocks of business to buy back shares with. This is not a market when you look at the pricing where you would use things like debt or hybrid financing and we deploy that to share buyback. I just don't think that, I don't think that it’s prudent, I don't think that it is very economically attractive given how some of the debts in the hybrid markets are priced as well. So, we will stay looking at this on a gradual basis preferring to redeploys capital from low return blocks to fund any buybacks as we move through the year.

So that, to be clear, $100 million is that sort of what you are saying done in January? Patrick B. Kelleher- Senior Vice President – Chief Financial Officer: I'm just saying, that’s from December.

Okay. Patrick B. Kelleher- Senior Vice President – Chief Financial Officer: We had 24, plus an incremental amount that we brining total to date since we announced the two-year billion-dollar organization to $100 million.

Okay. And then the other question I has, I wanted to get some clarification Mike on the comment you made, I think up front about, something like we may serve as a conduit to bring the capital to the industry as the whole. Could you talk about what you mean?

Sure. In fact, Kevin why don’t you take that since you've been looking at this area.

Good morning Ed, Mike’s comment, I think given the current credit environment and the potential for higher quality business growth that we see out there as guidelines get firmed up and tighten and pricing improve. There is obviously some discussion that more insurance industry could be looking for some capital. At the same time, there are others looking to provide capital in that same type environment as a look at the same opportunity. And since Genworth is viewed as a good manager of risk and of capital, we could provide the expertise to more effectively deploy some of that capital. That can be accomplished in a couple of different ways. It could be accomplished through reinsurance entities, it could be accomplished through ventures, so we are exploring a number of things there and will remain… will update as we proceed on that.

Ed just to be clear, doesn't change our capital allocation, we see new interest… new capital interested in coming in. So again we consider this an avenue.

Okay. That's what I wanted to be clear, and then the final question is we sort of seen how the US MI business can deteriorate in a very challenging environment. Can you help us understand… if you had a really bad year in international and let's say your geographic diversification did not work as you would expect it to overtime. Can you give us any sense of what a really bad year in international is in terms of loss ratio to deterioration? Is it possible for it to be up 10 points in a year, 20 points in the year, I mean, just the thing on that I think would be helpful.

I guess Ed, let me ask you a clarifying question is, when you point towards a really bad year I think you're pointing towards… are you talking mild recession, deeper recession on a global basis.

I'd say, let's just say a deeper recession. Mild to deeper recession on a global basis and we don't have the benefits of diversification that maybe you would assume.

Let me then just give you a general perspective on a recession. I think that might be a way for you to think about it. First of all, technical definitions of recessions and look at... what I'll call practical definitions of recessions. So you look at corporate performance what that mean to equity markets and credit performance and investment portfolios. You look at employment levels, you look at consumer buying and payment behaviors because either it impact spending or their investing and protecting behavior or the default risk on forms of loan. We'll of course look at interest rates and then we look at real estate markets. Both residential on the one hand and commercial on the other, residential for mortgage insurance, commercial saying how do you feel about your investment portfolio though I think Pat made it quite clear, we feel just fine on that basis. When you put that all together, if you cut across international, you would see sort of something like about in a mild scenario about $0.07, $0.75 of pressure in a heavier scenario you might be looking at $0.13 of pressure in international with a severe global recession and how that would play through. I think that might be one way to look at and Tom you want to provide any more specific color?

This is Tom. I'll like to go back to something they also pointed out in the first quarter earnings call and I think it's very important to remember that the global housing markets are virtually nothing like those that we do have in the United States. They are not... the number we announced with non-prime originations globally with the exception of that would possibly be the United Kingdom. The global markets are categorized by larger banks, some reliance on the capital markets, but much less on the mortgage-backed security markets. And as of this moment we are seeing some liquidity impacts but very, very manageable in Australia and Canada and a little bit deeper in Europe. And when you think about the fact that it is the liquidity issue that is driving the issues in United States that to me gives me a relative degree of comfort when I look globally. Now there is a question that if you have US slowdown, what is the contagion impact globally, and I want to keep reminding everyone that we have already reflected some economic slowdown in the projections that Mike and Pat gave you earlier. I want to continue to point out that about 95% of our risk in force is in Canada and Australia, and I if I bring it down, work through those for you very, very quickly, the Australian economy, while historically somewhat linked to the United States has not been linked in a big way. We do expect, and I think Australia expects a very limited impact. Home price depreciation actually accelerated in 2007 and the buyers in Australia today is actually towards raising rates and that's what we've seen in other words there are growth and inflation concerns. So we are watching what's in Australia because of…

Thank you, very helpful.

Your next question comes from the line of Steven Schwartz with Raymond James.

Hi, good morning everybody. Just three, three questions. First, just looking at the revised outlook, Mike or Pat, I'm kind of interested... in the Investor Day you provided... you provided a split off between USMI and the rest of the businesses, do you see both segments down at the lower end of the range, or do you see this being much more driven by USMI?

We have seen two things. One is as I said, we would see USMI at a moderate loss, in other words, that could be between, some place between a breakeven performance and the down side scenario, we're losing about $100 million that we showed at Investor Day. I'd say it is too early to call that, you have to look at the market factors. And then the other factors, interest rates, some slowing economies, you look at the equity markets here. That had some moderating impact and you have to put those all together, and that is why we talked about the lower end of the range.

Okay, fair enough. Pat what are you using for the base for international to come up with that 10% number?

We're basically... we basically took out the FX. If you look at the year-over-year we had, first of all we of course had some pickup with the earnings curve adjustment.

I'm talking about '08 versus '07, presumably you are not assuming the FX.

Yes, that is my point though, if you're looking at the 10% lead, first of all you have to say what is coming off of it, it's coming off of ‘07. So when we take out the FX, '07 came in a little higher with the earnings update. So the assumption then is basically a little slower growth from 14% to 10% on a comparable basis, when you strip out the FX impacts and recognize that we were little heavier in the fourth quarter than anticipated as far as delivering profits with earnings curve update.

Okay, got you. And then...

Hold on, Pat may have some additional color on it. Patrick B. Kelleher- Senior Vice President – Chief Financial Officer: If you're just looking for a number, we are looking for the growth of $585 million.

Okay that is good. And then, Tom, you just touched upon with Ed, the market is so different in Europe. They don't have the products maybe even the same products that we have here in the United States. So what entails slowing your business down in Europe. What kind of steps do you have to do to make that happen?

Steven, again a great question. It is very important as you said; you remember that the products around the world are very different than in the United States. You've got to remember that our European growth has been recent and therefore we have been growing the business over the past two years in face of some very nice economies. So what we're seeing in Europe, particularly in Spain, is a slowdown. And we are expecting some upward pressure on unemployment. We do believe that Spain is going to experience and is experiencing a more material liquidity impact than the rest of Europe, and certainly the rest of the world. And we've seen home value soften in the fourth quarter, and we expect them to fall next year as well. So, which attempted to be proactive in that regard and some of the items, the areas that we'd focused on is very similar to what you've seen in the United States is a significant reduction in our high loan-to-value products levels, for instance we are capping those at 95% max and limit into 90% in many of the areas of Spain and Italy. We have tightened underwriting guidelines. We are working to reprise many of our product there as well. So I think as I believe Pat mentioned to you earlier those are the actions that we are taking and will continue to take. It did result in a 50% reduction of our new insurance written in the fourth quarter and again that is a measure of the effect of those actions. And in addition to that, based on the actions that we are taking and we will take, we do expect that for instance our Spain new insurance written level to decline approximately two thirds in 2008. So in summary, it's really loan-to-value differentiation, underwriting and regional dispersion of new product.

Okay. Great. Thank you.

You're welcome.

Your next question comes from the line of Dan Johnson with Citadel.

Thank you very much. Just a clarification and go back to this 10%. Was this referring purely to the International MI outside of Canada and Australia? Still trying to tie what's the base is that we are talking about. Patrick B. Kelleher- Senior Vice President – Chief Financial Officer: This is Pat. It's total International.

Total International. Got it. Got it, got it. Okay. Let's see here. On the portfolio what were you seeing in the Alt-A environment? I can't recall exactly what other people have done. I haven't seen a whole lot of write-downs, I think of Alt-A. What are you seeing in the marketplace that… on the investment side that led you to revalue those assets? Patrick B. Kelleher- Senior Vice President – Chief Financial Officer: Let me turn it over to Vic Moses, who is our Chief Actuary and leads our risk management organization. Victor C. Moses - Senior Vice President – Actuarial & Risk: This is Vic. Looking at Alt-A we think actually the performance on Alt-A has held up fairly well. To date, we are seeing some slowdown in prepayments and some rises in delinquencies. We cash flow tested any of our securities that were below investment grade and actually tested many of that were above investment grade for performance. In the end, in the Alt-A portfolio, we took year-end impairments of only about $34 million pre-tax. And that number reflects some securities that actually didn't show principle impairments, they just showed cash flow failure or due to the timing of the actual receipt of funds. And that securities purchased at a premium for example that are extending in this environment. So overall Alt-A still continues to perform reasonably well and we hope that continues to do so.

When you look at the actions of the rating agencies that you're somewhat busy in the fourth quarter. But, got really busy here in January. Can you tell us within the sub-prime portfolio, how much of that portfolio got downgraded during the fourth quarter and then how much of it ahs being downgraded since the fourth quarter, since that looks like where most of the action has happened? Victor C. Moses - Senior Vice President – Actuarial & Risk: I don't have the actual numbers for downgrades in the fourth quarter that is already going to factor in the year in the analysis that we've done. We did take a hard look at securities that were downgraded in the first quarter and S&P took actions in January those actions effected 22 of the securities in our portfolio. Looking back at the impairment analysis we did on those, we had impaired 12 of those, I think three to four of them are already non-investment grade, that amounted to about $42 million of our right downs for the quarter, there were 10 securities we didn't impair and the book-to-market on those 10 securities is about $37 million.

And the underlying value of those securities? Victor C. Moses - Senior Vice President – Actuarial & Risk: Book values?

Yes, roughly. Victor C. Moses - Senior Vice President – Actuarial & Risk: On the portion that we impaired about a 100 and... total population about $125 million of book value.

Can you remind us what your OTTI policy, how long the things have to stay down before you have to take it through the income statement. If it's… at all mechanical? Victor C. Moses - Senior Vice President – Actuarial & Risk: I think, I can... I'm not the accountant here but let me just give you my take on it. We don't impair these on a time and distance basis, these are impaired on a cash flow testing basis. So any securities that goes below AA, we will cash flow test each quarter. So, we are actually looking at our best estimates of the return on the cash flows.

Great. And then one last one on the mortgage side of the HPA outlook. What are we... what's our best estimate now in light of all the economic data we've seen, what do we thinking about HPA for '08 and '09? Thank you very much for taking the questions.

Yes, Dan first, I just want to Pat to finish answering your question on the valuation approach then we'll go to HPA. Okay. I just wanted to give you very specific answer, we don't have a bright line test with respect to looking at those securities that Vick was talking about, but we take a very hard and detailed look at everything that significantly impaired beyond the six months period. Okay Kevin let's, Kevin you want to pick up on Dan's HPA question.

Yes. I think the best way to think about HPA continues to be... to think about it in terms of, sort of peak to trough [ph] declines and we had last started to total run in that peak to trough was going to be about in that range and our current view is that's going to continue to extend out to about 14%. So as I think about that it's about 3% that we realized in 2006 roughly another 6% that we realized in 2007 really from the end of '06 to '07. So another 6% or so to go and that continues to be a fluid number and we updated accordingly as inventory supply seem to continue to grow in the market.

You'd expect that remaining 6% mainly or I guess exclusively to fall into '08 at this point?

I think that 6% is primarily '08 with some recovery presented with... beginning to recover in '09, but obviously there is pressure on that 6%.

Yeah, understood. Thank you very much.

Thanks, Dan.

Your next question comes from the line of Mark Finkelstein with FPK.

Hi. I have got a few questions. Just to go back to international, I think you covered EMI side. I am actually curious about payment protection. I guess what is the historical sensitivity to earnings from change in the economic environment? That's my first question.

Tom, do you want to take that?

Sure, I'd be happy to. Let me just step back for a little bit and remind you that in our payment protection business the coverage that we provide is triggered by several events, if you will, death, accident, disability and very importantly involuntary unemployment. And also remind you that of our portfolio insurance in force if you will only about 25% of that is dependent on unemployment. The other reminder is that as part of our risk management process, as we have discussed we use exclusions, waiting periods and our claim payments are also capped typically on unemployment basis of 6 to 12 months and we also enjoy lender risk sharing arrangements. So, as you look to next year we have reflected unemployment in the European market and I guess a broad rule of thump for you on that is that, 1% to 2% changes in unemployment it will impact earnings next year as Mike said about $0.01 to $0.02. Mark Finkelstein – FPK: Okay, great. Just going over to traditional life real quick, you talked a little bit about the… I guess the lapsation in some early to mid 90s blocks of term business, I guess just looking at the earnings impact in this particular quarter where we at in terms of that lapsing? Are we kind of pass the trough or... what can we expect gong forward and I guess remediation efforts are you looking at right now?

We've have Bill Goings here who leads our Life business. Bill, do you want to take that?

Yeah, just stepping back a little bit over the past several years we have seen declining retail prices on the term business. We've also seen consumers shift to Universal Life and probably some recent potential recessionary pressures we are experiencing higher lapses versus pricing in certain business underwritten in the early 90s as it enters the post-level term period. Overall lifetime persistency remains in line with or better than pricing, so this is really a timing issue in terms of when new profit actually emerges from this book. We experienced some pressure on the fourth quarter of about $10 million versus the prior year, these blocks are still in the very early periods of coming out of post level period and if the trend continues we could see pressure… further pressure in 2008. We are pro-actively monitoring these blocks and we are evaluating options to reduce the impact should the trend continue such as for the conservation efforts or exchange products or pricing adjustments. Mark Finkelstein – FPK: Okay, great. And I guess if you can address this on the call later today, that's fine. I'm just curious about, in the US MI business, I mean some more kind of cautious outlook and kind of updated thinking in terms of delinquency experience, severity et cetera. Does that have any impact on any changes on how you thought about the sensitivities on '09 earnings that you… December Investor Day?

Well, I'll just give you a general perspective, and I would encourage you to look at all of the leverage Kevin will layout on the 11 AM call is, I think the real dynamic is we still see the value of the captives coming late in the year and then providing a positive impact in '09. As Pat stated, as I've stated and Kevin as well as if you see loss acceleration, the cap is simply going to attach earlier and that provides more of an '09 impact. So we will have to see how the next couple of quarters play out, but if you go back over several quarters, even you are seeing an accelerating trend towards attachment. Mark Finkelstein – FPK: Okay. Thank you.

Your next question comes from the line of Eric Berg with Lehman Brothers. Eric Berg – Lehman Brothers: Thanks very much. Good morning Mike, and good morning to everybody else and I guess Richmond. So can you hear me, by the way?

Yeah. We can hear you. Good morning Eric.

Good morning. Thank you. So, first question relates to domestic MI. Tom has made very clear over the last couple of years, how different your book-of-business is from that of competitors. But one of things, we calculated last night is sort of how much you are holding in reserves, current dollar of delinquency and it does appear to be currently dramatically less but no visibly less than your competitors? My question is... my first question is , I have couple more after this, what could cause your reserves per dollar delinquency to be less than competitors?

Kevin you want to take that.

That's really... in my mind there is a couple of things. Eric, one is when you look at our reserves for delinquency, it probably has, it's much lesser impacted due to the business we've done in our bulk channels than some of our competitors having not done the bulk sub-prime and some of the other products. I believe, that is probably reducing the number. Additionally, we have experienced nice growth over the past two years off of the lower insurance in force base and as the delinquencies develop through a normal seasoning pattern on that new production as those are new younger delinquencies that come online, as would be expected, and generally based upon our reserving process those are, as they hit the number are being reserved at a lower level until which point, they might age through the delinquency channel.

Okay, a couple of questions, related questions, for Pat to finish up here. When you talk about loan-to-value calculation, the loan-to-value on CMBS. Is this the original loan-to-value on the underlying loans, and is it sort of an average of the loan-to-values or weighted-average. Is this just, what exactly are we talking about here in terms of timing and calculation when, if you talk about loan-to-value ratios?

Pat, yes, its original and yes it's basically a weighted average.

Why would it then be, why is it helpful statistic, if, I think let's say there had been significant depreciation in the value of properties. I would think, be most warranted [ph] in current loan-to-value.

Not all securities reporting particularly on CMBS type investments, provides that information as part of the package. So we were trying to give you consistent measures, which would be useful in helping you to understand the risk profile of the portfolio.

I'll just add to that, as you may know I'm an old commercial real estate guy from the '90s and we've always taken very conservative stands in how we wanted to approach commercial real estate lending. How we underwrite the cash flows, wanting to have good equity cushions. So the fundamental principal there is to give you an idea how much cushion you're starting at, with again not all of these being like just recent CMBS, we've layered them in over the years. So on a number of these markets you had appreciation. So even if there is an adjustment overtime in the commercial market, it gives you a sense of how much buffer is there in a debt structure. That is the only point that we try to convey on that and as Pat said, if we could have current, I' mean, all the services provide the current information that will of course be a statistic that could be a valuable and aggregated as well. But we do monitor that. We just don't have that padded up from an individual monitoring standpoint for you.

Fair Enough. Last question for Pat again. When you talk about the… with respect to the model on guarantors, financial guarantors and how you are not only looking to… of course, you are not only looking to their guarantee and are doing underwriting of the underlying securities and they are rated, I don’t remember the percentage of traded A or AA, but whose rating is this? Is this Genworth rating this single A or is this… when you talk about the underlying rating being A, is this in almost every instance coming from an independent source or this your assessment of the credit worth of the underlying credit? Patrick B. Kelleher- Senior Vice President – Chief Financial Officer: Well, the numbers that I reported are coming from kind of an independent kind of rating service. But what I would also say is that consistent with kind of the analysis of how we price these securities and value them that we shared with you kind of in, I guess, prior disclosures, the important thing to kind of highlight is that we do underwrite each of these securities. We make our own evaluation of their value and then we take a look at what we’re being paid and how the security is rated and we only make those investments where we think they make economic sense. Okay?

Yes, I got it. Thanks very much.

Ladies and gentlemen, the last question will come from the line of Tom Gallagher with Credit Suisse.

Good morning. Couple more on USMI and then one on long-term care. The first one is, and I think you're going to talk about this bid in your call later, but I do know if you can simplify and put it in kind of high-level terms? In light of the deterioration that you're seeing in USMI, can you talk a little bit about the sensitivity and the probability of loss ratios piercing through the back end of some of this captive reinsurance? You're not so much on the 4 to 14 coverage, but more on the 5 to 10. Is there… even on discretionary, you still having a very good buffer and it relates to your expectation there? That's my first one?

All right, Tom. This is Kevin and you are correct, we will cover that in detail at 11 o'clock. However, I think the simple way of thinking about it is when we look in aggregate and sort of average the attachment point in and the attachment point out for both the 40s and the 25 excessive loss agreements and all the various other similar structures. Our view, basically you'd have to run at sort of a 15-type frequency rate for the entire 2005 to 2007 books to pressure you, to sort of come out the back-end aggregate captive here. We view that as highly unlikely and there is a lot of room between where we are today and what it would take to experience that. And I'll drill down on that further with additional sensitivities at 11 o'clock.

Okay. And that 15%, Kevin relates to a delinquency or a default?

No, it's... and let me try and clarify that. It doesn't relate to a delinquency, it’s ultimate claims frequency. And so we will also talk about the distinction between delinquencies, defaults, and frequency on this afternoon. Delinquency is a sort of an early indicator of loans that are behind on the payments, claims frequency is a loan on which we make a claim. And that would be talking about claims frequency when we talked about that 15% number.

Okay. And the... and just I don’t know if there is any historical context you can put on a 15% number, is that...

I can. It's a great question. The last time we saw a 15% claims frequency, for any even individual book of your business was back, I think, in ‘82 during the oil patch crisis. So, in one year, back then... one book year that aged through the oil patch crisis grew to a 15.

Okay. And that was.... that was the worse we’ve pretty much seen and that was in ‘82 and that was just one book year.

You never had three book years in a row. I don't think, and what I was talking about is three collective book years all hitting 15 in that sensitivity.

Great. Okay. And then, the other question is, did I hear... did I hear you or someone else on the call mentioned, I think, that you're seeing more deterioration in your prime book. Just curious, you should think about that experience and if you're seeing a real change there? Patrick B. Kelleher- Senior Vice President – Chief Financial Officer: What we're pointing towards was the Florida… was Florida delinquencies and that Florida delinquencies and the Florida, in general, was one of the clear pressure markets. And that the delinquency you'd see in Florida would be high for a prime book when you look on a national basis. But beyond that when you look nationally, as Kevin said, and we will walk through, we should expect Florida to be an exceptional market as it's shown it has been. So, that's fair with the context.

Okay. So, it’s very much a regional comment as opposed to across the book? Patrick B. Kelleher- Senior Vice President – Chief Financial Officer: I mean that was a specific state comment explaining again, where have we seen a disproportionate level of the pressure coming from.

Okay. All right, that's helpful. Last question I have is just long-term care run rate, if I understood the numbers correctly, was in sort of the high $20 million range for the quarter, and I don’t know if that… I guess there were a lot of true-ups. So, I just want to make sure that I’m understanding this one. That was below the run rate we’d had for the prior nine months. So, I should look toward '08 should we assume to use more of a run rate, should we average them all, and is your 10% to 15% growth guidance still pretty much intact for long-term care?

Let me turn that over to Buck Stinson.

Yes, hi. The core business is going to be in that high 20, 30 range for the quarter. But what we're going to benefit from in 2008 obviously is the rate action on the in-force blocks. And so you’ll have the additional premium, we’ve also got continued strong growth across our individual and group lines in the linked benefits, so you'll start to see the benefit from that as well. So, the 10% to 15% growth guidance that we gave you is still intact.

Okay. And Buck, would that be roughly… it will be 10% to 15% of full year, not kind of where we ended the year.

Yes, of the full year. Patrick B. Kelleher- Senior Vice President – Chief Financial Officer: This is Pat. I would add that use the full year and use the averages because when we look at this, we see that kind of lapse rates on the block, termination rates on the block tend to down some quarter to quarter, so you have to look at it over a series of quarters.

Great. Thank you.

Okay. Well, thank you all for joining us this morning, and look forward for your participation in our call at 11. Materials for that call are posted on our website now if you wanted to take a look at them early, and again thank you for joining us.

Ladies and gentlemen, this concludes Genworth Financial’s fourth quarter earnings conference call. Thank you for your participation. At this time the call will end.