Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sun Life Financial Third Quarter 2007 Results Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions]. I would like to remind everyone that this conference call is being recorded today, Tuesday, October 30, 2007 at 11 AM Eastern Time. I'd now turn the conference over to Mr. Paul Petrelli, Vice President, Investor Relations. Mr. Petrelli, please go ahead.

Thank you, Patrick, and good morning everyone. I'd like to start by introducing the members of the management team present for today's call. Hosting the call we have Don Stewart, Chief Executive Officer of Sun Life Financial; and Rick McKenney, Executive Vice President and Chief Financial Officer. Also available to answer questions are Kevin Dougherty, President, Sun Life Financial Canada; Bob Salipante, President, Sun Life Financial US; Paul Carvin [ph], Chief Financial Officer of MFS; Jim Anderson, Executive Vice President and Chief Investment Officer; Bob Wilson, Senior Vice President and Chief Actuary; and Nigel Hodges, Senior Vice President, Finance. As many of you know, while the primary purpose of our call today is to update equity analysts and investors on our results and answer their questions, our audience also includes, media, industry peers, rating agencies, our regulators, our employees, and our distributors, and we welcome them. The slides to which the speakers will be referring are available on the Sun Life Financial website. Turning to slide two, I draw your attention to the cautionary language regarding use of non-GAAP financial measures and forward-looking statements, which form part of this morning’s remarks. This slide reviews the reasons why forward-looking statements could be rendered inaccurate by subsequently events. And with that, I will turn things over to Don.

Thank you, Paul. We are pleased to report a robust third quarter. For the three months ending September 30, 2007, fully diluted operating earnings per share were $1.01, up 9% compared to a year ago. And over the same time frame, operating return on equity was up 40 basis points reaching 14.8%. Both results are in line with our medium-term objectives of 10% annual growth in operating earnings per share and 15% ROE. Before I speak to specific business highlights, I will comment on Sun Life's branding initiatives. In Canada, we continued implementing our integrated brand strategy, launching a national advertising campaign on September the 17th. Slide four displays the campaign’s theme, Life's Brighter Under the Sun. We’ve had very positive reactions to our commercials, and we will be tracking the campaign’s impact as we continue to profile our brand. Today, Canadian and international businesses are characterized by strong global brands. As an international player, we aim to leverage our brand strength in Canada to bolster our international competitive position. The scope of our international operations provides diversification in terms of customers, products, and marketplaces with associated diversity in currency. While the value of the Canadian dollar is important as it is the basis for our financial reporting, we review and monitor the underlying business of each of our units within their own geographies and without the impact of foreign exchange adjustments. Our asset liability risk management policy addresses foreign exchange risks and specifies that assets be currency matched to the liabilities they support. Under the terms of our operating policy on corporate asset liability management, the company does not customarily hedge its income in foreign currencies. We believe our investors recognize that a portion of our earnings is generated in currencies other than the Canadian dollar and are buying…

Thank you, John, and good morning. Turning to slide six, we had another excellent quarter for earnings per share and ROE. Fully diluted operating earnings per share were up 9% to $1.01. As Don alluded to in his remarks, the strengthening of the Canadian dollar continued to be a headwind this quarter, reducing our operating EPS by $0.04 over the same period last year. In constant currency, operating EPS saw a 13% increase over Q3 2006. The underlying results in our North American operations were very good. We weathered well some of turbulence seen in the quarter. The impact of wider credit spreads and volatile equity markets and interest rates came through favorably for the company, in pact due to some of our economic hedging programs. In the quarter, we also saw improved earnings from our Employee Benefits Group acquisition in the US and higher earnings from our Asian operations. Our results were slightly lower than second quarter, which can simply be explained by $0.02 of currency impact and the fact that the second quarter also saw very good performance. Operating ROE for the third quarter was 14.8%, an increase of 40 basis points over the same period last year. The growth in ROE was driven by good earnings and continued effective capital management. On a trailing 12-month basis, our operating return on equity stands at 14.4%, progressing measurably towards our medium-term objective of 15%. Our sources of earnings, which I set out on slide seven, highlight the high quality of our earnings this quarter. Expected profit on our in-force business increased by 14% over last year or 18% on a constant currency basis, driven by excellent performance in our wealth management operations as well as the benefits of our group acquisition, which closed in May of this year. We…

Thanks Rick. Before we open the call to questions, I would ask each of our participants to limit him or herself to one or two concise questions and to then re-queue with any additional or follow-up questions. We will make every effort to take all your questions during the allotted time this morning. But now... I will ask Patrick, our operator, please poll the participants for questions. Question and Answer

Certainly. One moment please for your first question. Your first question comes from Michael Goldberg of Desjardins Securities. Please go ahead.

Thank you. Good morning. Rick, I am just wondering if you could tell us what was split in value of new businesses for MFS and non-MFS for this year and also last year and for trailing 12 months Q2 last year, where the MFS, non-MFS, VNB excludes medium-term notes as you've now started reporting it.

Okay. Let me take you through... let me give you four data points and that should do most of what you're looking for. I think the split, we reported CAN$839 million this quarter for the trailing 12 months. I'd split that CAN$839 million to CAN$237 million for MFS, CAN$602 million for non-MFS. Looking back to Q3 of last year, also on a trailing 12 months basis, MFS was at CAN$191 million, non-MFS at CAN$483 million. Both of them grew in roughly the 25% range, so there is no mix differential between the two.

Okay. And what factors actually account for the year-over-year and sequential changes in VNB split between MFS and non-MFS?

I will give you some rough... If I am answering your question correctly, the biggest factors are really growth across the businesses and maintaining good margins throughout the lines. There is no one particular area I think with good broad-based growth.

Okay, thanks. I will re-queue.

Your next question comes from Dennis Westfall of Merrill Lynch. Please go ahead.

Thank you. A question on new business strain. Can you confirm that this quarter did not include any recovery of prior new business strains? And you're talking about by the end of the year recovering the prior elevated levels, is it safe to say that that might go into '08?

What I have said is actually, this quarter does not include the impact of finalization of implementation of the structure. If you look at what we talked about last quarter, there are some benefits as we start to prepare that block effectively for going into the structure, but it does not go back to prior to 2Q to recapture any of the previous strain that was noted. And we do expect still to complete that structure by the end of this year.

Thank you.

Your next question comes from Eric Berg of Lehman Brothers. Please go ahead.

Thanks very much. Rick, you mentioned as did the narrative of your news release that in the United States, both your individual life and annuities business benefited from some favorable net hedge activity. Could you expand on that? What types of hedges are you talking about and how exactly did this affect the reported results? Thank you.

Sure, let me take... I'll take initial part of that and Bob can add in as well. We do look at our hedging programs across a variety of areas, but the two areas that came into account this quarter, we do put some interest rate hedges relative to our life business as we look at the flow... cash flow there, and those can come through favorably in terms of our overall reserves. And the second piece is a set of hedges, which we have talked about in previous quarters as well, which are hedges against our GMDB block of business and as those hedges actually increased in value over the course of the quarter those will come through into our core overall earnings. So, those are the two sets in which I was mostly referring to, but I would tell you that that is a part of the comprehensive hedging program across many of our lines.

If I could just clarify or sort of follow-up on this, this will be my remaining question... part of the same question. To the extent that the hedges of your interest rate exposure are meant to do precisely that, produce a hedge and not make money for you and to the extent that the GMDB hedges basically are there to do the same thing and presumably the increase in the... Well, let me just pose the question this way. Shouldn't we think therefore since these are... since you're calling them hedges as opposed to businesses per se, moneymaking ventures, would it be analytically reasonable to exclude these benefits from your earnings in the quarter since if they are hedges, definitionally they are not there to make money as much as to protect you from and sort of offset losses?

Yes, I think if you look at both sides of the equation, Eric, in terms of what happened in the quarter to those hedges, these are economic hedges that we look at. Two different things going on there in terms of how we reflect the cash flows that we expect coming in, we call them hedges, but it is really locking in our expected cash flows that we see in the business at a certain interest rate environment, that is real value that was created through locking in those hedges, that is reflected in the quarter. The other piece on the GMDB hedges that you see, economically they do offset, but because our reserves are effectively floored at this point in time we don't see the other side of that hedge coming through. To be fair, we've seen the reverse of that in other quarters as well. So, you will see some volatility there, but I don't... in terms of actually pulling them out of the run rate of earnings, I don't think I'd necessary do that. There is a lot of movements around the [inaudible], and although we've isolated those two in this quarter, there is certainly other things going in different directions.

I'll definitely want to circle back with you. So, thanks very much for this explanation.

Your next question comes from André Hardy of RBC Capital Markets. Please go ahead. André-Philippe Hardy - RBC Capital Markets: This is for Rob Manning, if he is there, two questions related to MFS. One, it looks like the revenue realization on assets was down although some of that would definitely be currency driven, but I'm just wondering if there is an asset mix shift that was negative for your key realization. And secondly, your Lipper numbers are strong, but your sales were not as good. Can you talk about what your Morningstar results look like and what needs to be done to translate that performance into higher sales?

Yes, let me turn it over to Paul Carvin [ph], CFO of MFS. Unidentified Company Representative - Chief Financial Officer, MFS Good morning. On the revenue realization, I assume you mean just revenue? André-Philippe Hardy - RBC Capital Markets: Revenue as a percent of assets, we have Canadian dollar revenue with lower assets. Unidentified Company Representative - Chief Financial Officer, MFS Actually, our revenue run rate on advisory fees has been inching upwards over the last year because of a mix shift and that is less lower fee US mutual funds and more higher fee international. The actual revenue in total is going down for a couple of reasons. One of those is the distribution fee rates on class B shares as B shares have become less popular. There are less fees on most, but at the same time we see less amortization coming through the P&L. So, that's one of the reasons why revenue goes down, but margins are not going down. On the other side, we do get some revenue from the translation. We have been reducing costs there and outsourcing that. The revenue is on basically a cost reimbursement basis. So again, revenue comes down, but it doesn't effect P&L. The advisory fee line is the one I focus on, and that is still relatively healthy. I'm sorry, what was the second question again? André-Philippe Hardy - RBC Capital Markets: Performance, when does it look like on a Morningstar basis as opposed to Lipper and what needs to be done to get… to translate that good Lipper performance into better sales? Unidentified Company Representative - Chief Financial Officer, MFS Yes. Morningstar, as probably most of you are aware, four and five star funds do drive the vast majority, actually probably over 100% [ph] of net sales in…

The next question comes from Tom MacKinnon of Scotia Capital. Please go ahead.

Yes, thanks very much, good morning, good quarter. A clarification and a couple of quick questions. With respect to the funding arrangement, as I understand, it doesn't look like in the quarter I think you have said you haven't recouped any of the strain booked in prior quarters, but at the same time I don't think the funding of the structure is entirely in place. So, does that mean going forward we might see a bit of a benefit from the recovery of prior quarter strain, but at the same time the cost of the structure would be taken into account as well, is that correct?

That is correct, I mean when you look at it, we have not taken the benefit, but… so, there will be… as we implement the structure in its final form in the fourth quarter, there will be multiple factors taken into account. However, your point is very much true that prior to second quarter where we were seeing outside levels of strain, we will be able to recoup some of that if you focus on that exclusively.

And the two quick follow-ups, in the Canadian group business I noticed the earnings were down quarter-over-quarter in the area of about $10 million. I know they were down year-over-year for maybe some reserve issue in the third quarter of '06, but what might be driving… I mean the business in-forces up, what's driving thus, is it just seasonality or just volatility within that business or is there anything else that we should be concerned with here?

It's Kevin Dougherty speaking. So, as you pointed out, there was a big gain last year in Q3 around investment income, which was non-recurring, and the second piece will be slightly weaker mortality experience in Q3, still within the range of normal fluctuations, but lower than last year.

Okay, thanks. And then the final is just... if we look at page 21 of the sup. and talk about other borrowing costs that you are up considerably in the quarter at $43 million. I think they are running in the area of 30-ish million. And this is like… this quarter would be then almost half of the level we saw for last year. What is driving that? Is it an anomaly in the quarter or… maybe you can just refresh me as to what might be the issue there?

Well, we have increased at some of our... as we talked about this historical funding structures in place and as those have increased in size, it would be expected as the historical blocks grow that our funding cost will go up. So, I know that will be a factor. I’d have to give you a more detailed explanation offline on that.

But the funding structure, the cost of that is slightly responsible for the increase, is that... did I hear that correctly?

That is correct. Previous funding structure though--.

Okay.

We’ve issued more senior notes earlier in the year as a result of that, which you would have seen.

All right. Okay. Thank you.

Your next question comes from Darko Mihelic of CIBC World Markets. Please go ahead.

Hi. Thank you. My first question is I think is for Bob Salipante just with respect to sales in the US for individual life. Past three quarters were ranging between $37 million and $41 million. There doesn't seem to be any momentum gathering. I wonder if you can talk to what might your expectations be for sales and maybe perhaps the pricing environment and if that is causing sort of a stagnant level of sales?

Thanks, Darko. Bob Salipante here. As you recall, we introduced competitive products in 2005 and then broadened distribution in 2006 with the addition of M Financial and National Financial Partners, and the past characterized the sales increase in 2006 as being beyond expectations. We also experienced an increase in reinsurance rates and you are familiar with the strain story. So, as a result in the first quarter of this year we repriced the product to lessen strain, improve profitability and implement our funding solution, as Rick has mentioned. And the intent and I think I’ve telegraphed [ph] on these calls is that no-lapse-guarantee sales would tail down to some degree and they have and that reduces balance sheet strain that that product drives. But if you look in a broader context, our sales this year are up 72% over 2005 when this whole initiative began. Our relationships with M and NFP are strong. They’ve picked up our full product set including group insurance and annuities. We are introducing proprietary products with M and introducing a full suite of non no-lapse-guarantee products. And so, our focus is to increase the sales in those areas. I am not going to make a projection on future sales, but our focus is to grow the non no-lapse-guarantee business through the strong distribution relationships that we have.

Okay. Thank you. And just one final question for Rick and maybe Bob Wilson as well with this last question. I'm not sure if you guys are ready to quantify what the recapture would be of excessive strain in Q4, but how should we look at Q4? Should we prepare ourselves for a lot of moving parts with respect to perhaps reserve increases as an offset, given the volatility that we have seen in the markets? I wondering if you can just comment on that. Should investors think about sort of a noisy Q4?

I will take a shot at it, Darko, and Bob can add on it. I think when you look at... we have identified one item here, which is the recapture that we expect to happen at this part of the structure. To project forward in terms of what we think the other pieces of Q4 would be, we wouldn’t do so necessarily at this point. This is obviously only a month into it. So, it is a question I would rather would stay away from at this point relative to what we are seeing today and how the quarter will end up.

I would just add, Darko, that Q4 for most companies in Canada is the quarter when more of the assumptions are looked at. So, there will be a greater number of assumptions changes that will happen in Q4 than would happen in Q3 or Q2. If we've been able to quantify them, we would have put them into the income in Q3 or Q2. Suffice it to say, we’re looking at a whole bunch of assumptions and there will be a lot of assumption changes. The extent to which they will affect income, we'll find out between now and the end of the year.

Okay, fair enough. Thank you.

Your next question comes from Jim Bantis of Credit Suisse. Please go ahead.

Good morning. Just a couple of questions, one on the individual sales in the US, can you quantify the size of that BOLI block please?

Yes, this is Bob Salipante. The absolute amount of that BOLI sale was $1.5 billion.

Got it, Thank you. And then the next question is for Don, it’s a little bit more broader. I think when you look at what investors you've been winning their favor with smaller creative tuck-in deals as you did with Hong Kong in '05 and the US group operations in earlier this year, if you look at what the Canadian banks have been recently doing, they've been taking advantage of their currency, both on the Canadian dollar and as well as stock valuations and excess capital to advance their US platforms to make more sizeable strategic transactions. I guess, Don, seeing that there might be this window of opportunity where things are in favor of Canadian financials, what do you think of doing a larger deal in terms of deviating from this smaller tuck-in strategy in the context of really advancing your platform in US?

We look very carefully at deals pretty much on a continuous basis. At any point in time, we will have a number of deals in the assessment process. We are very driven by the fit of a deal rather than any particular size and range. The deals that we happened to do in the last 24 months have as you pointed out been relatively small deals and have been good fit for existing business. So, I would see us much more focused on the fit of a deal rather than the particular size of the deal at this juncture.

Don, can you just remind us… or perhaps Rick, in terms of the typical deal economics, which you're looking for in terms of when you want the transaction to be accretive and things of that nature?

Well, we're looking at now EPS dilution in the first year is the aim of the deal and EPS accretion from year two onwards. Inevitably, a deal of any size that's not funded by cash flow have some downward pressure on ROE and therefore we’d seek to make that bank over a reasonable period, but really the primarily… first green would be an EPS screen.

Great. Thanks very much. I'll re-queue.

Your next question comes from Timothy Lazaris of GMP Securities. Please go ahead.

Thank you. I've got two questions, one possibly I guess for Kevin. On the SunWise Elite Plus program or the new rider that you implemented, could you comment, give us a bit of just a tracking point as to how that... how sales of that product are going and perhaps even quantify the volumes. I'm not sure that they are separated out in the package, but if so, maybe just direct me to them. I'm trying to get a gauge as to whether sales came out the shoe strong and are tailing off or whether they are accelerating and what the magnitude of that number is. And then number two, I am not sure who is going to answer this one, but maybe Don, how comfortable... not how comfortable, but are you comfortable with your 36.5% ownership in CI and do you intend to raise that ownership piece over time? Thank you.

Okay. It's Kevin Dougherty speaking. In terms of the product, I guess it was launched at the end of April or early May, and I would say it is still gathering steam in the marketplace. There is a fairly steep learning curve for Advisors and for the rollout and for people to get used to the product and to start to use it in their practices. So, we would expect continued growth in the sales of this product. I don’t have the number of right in front of me, I think it is in the range of about $225 million in Q4 of SunWise Elite Plus sales.

Commenting… it’s Don Stewart here, on CI, we like our ownership position in CI. We think Bill Holland and team are doing a great job over at CI. As you recall, our ownership in CI has fluctuated between late 20% to presently 36.5%. I would say, this particular level works well for us and I wouldn't expect to see major shifts in the ownership position any time soon.

Don, this is a follow-up to that. Should CI have to issue equity for a strategic acquisition? Would you then be more inclined to get back to the level of ownership that you have? Is this the optimal level then I guess is my question?

Well, I think if we look at private transactions we have in fact investees in the transaction backing the team’s decision as we look at each transaction on a case-by-case basis. But generally, history has said that we have brought up to our previous ownership positions in prior transactions and I would expect that would be a guideline going forward, but we do look at each transaction as they come along.

Okay. Thank you both.

Your next question comes from John Reucassel of BMO Capital Markets. Please go ahead.

Thank you. Rick, just a couple of clarifications. Did you mention margins at MFS will moderate, you mean we’ll peak in the margins over the next 12 months, is that what you plan to tell us?

Potentially. I think that we are very happy with 36% in the quarter. We do expect it will come back in a little bit next quarter. How it trends up that over the next 12 months and we’ll have to see how the markets and many other factors go, but that is what I'm trying to atone. We are going to spend some money there.

And just to be clear, that's on wholesalers and branding, so advertising.

Correct.

And then, Bob Salipante, you mentioned that the M and NFP are now selling... they are selling variable annuities and group business out of Sun Life, is that what they are doing?

Yes, this is Bob. Variable annuity piece would be modest, but we’ve launched group relationships with both firms. And on the individual side, both firms have picked up a full product suite from core universal life products that we have talked about to our COLI products and our fiber placement products. So, it has been quite good and we are getting the annuity piece of it started, but that is modest at this point.

Okay, so not material. Okay, and then I guess my last question for Don, just is the activity level picking up out there given the uncertain conditions in the US? Have you seen the deal flow pick up or has there not been a lot of change in… we have heard people comment that valuation expectations are still high out there. Is that something you will continue to agree with or not?

From our perspective, John, we see a relatively constant level of activity. It does inevitably fluctuate quarter-by-quarter, but I wouldn't say that we detect a trend upwards or downwards.

Okay. And the valuation, has that changed much what people's expectations are?

Well, I think inevitably any time valuation shifts, you’ve got the attention between it, looking at more attractive deals from the purchasers point of view versus the sellers, [inaudible] as to times passed. So, I think valuations possibly look a little more favorable to purchase, but that doesn't mean to say sellers are going to accept that. So, I see the valuation as also a noisy figuration.

Okay. Great. Thank you.

Your next question comes from Mario Mendonca of Genuity Capital Markets. Please go ahead.

Good morning. I want to drill down into some detail on the higher credit spreads. You referred to that several times as being beneficial to earnings in the quarter, I but it was mostly in Canada [inaudible] others. The disclosure really doesn’t allow us to calculate how much that has changed because of the C dollar, US dollar co-mingled on the balance sheet. Rick, could you give us an understanding of what sort of changes… what the magnitude was and how that contributed to earnings?

Yes. What we have seen is credit help on a couple of fronts, we saw it in the US and it is really just a reflection of expectations of where credits will go and how it will impact and that is roughly... I will give it to you, roughly in the $10 million range benefit there. We also see a little bit in Canada as we… more as we get to higher yields on some of our assets. We have actually been able to see some benefit to that as well, and that is probably a little bit higher, probably in the $15 million to $20 million range.

Now, are you saying it is just the expectation or has the company actually shifted from, say, higher rated securities to lower rated securities?

In the US, it’s probably more of an expectation. In Canada, it's actually a shift of actual... to actual better yielding assets, but I should tell you that the credit spreads is more a reflection of... in the reserves as opposed to the pure yield coming off the portfolio.

But we are talking modest shifts there, we are not… the company isn’t making a major shift into the higher--?

No, absolutely not. If you look across the company, our credit profile this quarter to last quarter is very consistent.

And then, a question on the benefit of hedges, going to back to Eric's question, I was a little confused and I was trying to understand the explanation for how US annuity earnings improved. You stated that the fee income improved because markets were stronger, and then the hedges had a positive impact. The hedges would be… really should go the other way if they are in fact hedges. You'd assume they are to cover you from… for down equity markets. So, the two explanations just didn't jive with me. Can you help me understand that?

Yes. Let me turn that over to Bob Wilson.

Thanks, Rick. If you look at variable annuities, the CIA standards on variable annuity reserving have a concept of term of the liability. We actually purchase our hedges on an economic basis as opposed to an accounting basis. So, for many of our policies… variable annuity policies in the US, the reserve that we’ve established for the guaranteed minimum debt benefits is actually zero because of the term of the liability concept, because a lot of the policies were sold back when the markets were much lower than they are today. So, even at CPE 80, the reserve is zero. But when we hedge, we buy hedges that do not take into account the term of liability concept. But during the quarter, volatilities increased on our hedge portfolio causing the actual hedges to go up in value. Because the reserves have a zero floor on them, we ended up making money. And as Rick has pointed out, in some prior quarters exactly the opposite would happen, the market would go up, the reserve wouldn't go down, and the hedges would go down and that would go through income.

So, this is the case as of the value of the options increasing because volatility went up.

Yes.

Got it, that totally makes sense now. I'm sorry, I just have to get one another quick one in. The hedge funds initiative, you were talking about helping these folks set up their fund for the distribution and everything else, but are you lending any money to these guys, and is there any sort of co-branding of Sun Life and the hedge fund for the purposes of distribution that could create some reputational risks down the road? Unidentified Company Representative - Chief Financial Officer, MFS Now, this is Paul Carvin [ph]. On the Four Pillars, the entity itself is pseudo private equity venture whereby we will seed that, say, a $500 million fund, invest that money with, say, 10 hedge fund managers. The goal of… or the selling points of the seeding will be that we will oversee the security selections underneath that and we’ll put risk monitoring on top of it. So, one of the selling points is that this thing will not be 100 times leveraged and cannot blow up, and from that standpoint I think that reduced the risk of the headline risk to MSF and to Sun Life, because that's part of the reason for selling this. On the lending money front, we will have a small amount of money invested in seed fund, probably in the 5% to 10% range, including some of the individuals involved in the venture. But we won't be lending money per say to any of the sort of hedge funds. That will be through a seed fund, which we will sell to institutional investors.

Rick, how much money do you... sorry for the question, how much do you think of… Sun Life's own capital do you think will be in this initiative?

We’ve got to see how the initiative goes because it is going to start with an initial seeding and we hope to grow it significantly, but it's not going to be a large portion of relative, I should say, of MFS or certainly of Sun Life, but we want it to be successful.

Thanks.

Operator, I think we have time for one more question.

Okay, and it is from Colin Devine of Citi. Please go ahead.

Okay. I was wondering if you could just come back to the VA business a bit. With the sales down a little bit this quarter, Bob, do you really attribute to the market or are you starting to see a bunch of competitors’ products sort of mimicking your Income On Demand? As you may recall, I think you went through this a few years ago with the enhanced death benefit and sales ran up and then sales tailed down. And then, for Don, on the M&A front, is it fair to say that you're looking at both I guess the tuck-in type deals like you've done, but it is certainly our speculation you’ve looked at least one major deal in the US and that still remains something you can… you are very open to?

Colin, Bob Salipante, I'll take the VA stuff. I think in the third quarter we saw both on gross and surrenders some impact. July was the strongest month of the quarter on sales side. And then, we also saw surrender activity drop from prior quarters in an absolute dollar and a percent basis and as the quarter progressed. So, we didn't see some market impact there and it was the summer as well. We see IOD as being distinctive. It is very competitive market, as you know. Lot of product innovation continues to come from our competitors. We haven't seen really too much mimicking of IOD. I expect we'll see more of that come the May 1 release the products in 2008.

And Colin, it's Don speaking to address the question on M&A. I am not sure I can add a great deal to my comments previously in that we're in deal stream. I think it’s perhaps important to point out within the deal stream internationally, it's not solely about the United States, that we do look outside the US as witnessed in our Hong Kong acquisition sometime back. And so, we're looking wherever we see opportunity and fit. I think in the United States, as you well know, transactions don't come along in neatly packaged sizes. And so, we tend to look at whatever happens to come our way that we deem a close fit with good prospects. And I'm not sure I can say much more than that.

Then one follow-up, Don, for you perhaps or perhaps for Kevin. I agree with Don with the above comment that IOD is quite distinctive, and I think it adds tremendous value to clients. But if it's so distinctive, why haven't you rolled it out in Canada or else any of your other regions around the world?

It's Kevin speaking. So, Canada is still a pretty early stage market, and I think you'll see quite a bit of product innovation happening over the next 12, 24 months.

And Colin just to talk about other parts of the world, we're continuing to look at product… what you might call product extensions or product needs, pretty much everywhere we do business. So, stay tuned on that front.

Okay, thank you.

Okay, Thanks Colin. And I would like to thank all our participants on the call today. If there are any additional questions, we'll be available after the call. And should you wish to listen to our rebroadcast, it will be available from our website… on our web page, sorry, shortly after 1 PM this afternoon. With that, I'll say thank you and have a good day.

Ladies and gentlemen, this concludes the conference call for today. Thanks for participating. You may now disconnect your lines.