A+ (Superior) A.M. Best A.M. Best is a large third party independent reporting and rating company that rates an insurance company on the basis of the company's financial strength, operating performance, and ability to meet its obligations to policyholders.

A+ is the second highest rating out of 15 categories and was affirmed for North American Company for Life and Health Insurance as part of Sammons Financial Group on May 26, 2011. For the latest rating, access www.ambest.com.

A+ (Strong) Rating Standard & Poor's Standard and Poor's awarded its "A+" (Strong) rating for insurer financial strength on February 26, 2009 and affirmed on April 6, 2011 to North American Company for Life and Health Insurance as part of Sammons Financial Group.

The "A+" (Strong) rating is the fifth highest out of 22 available ratings.

A Message to You

North American Company finished 2011 on a very affirmative note, aligning with our history of continued financial stability. Our foundation is strong. The basis of this strength is our focus on long-term, sustained growth, along with the outstanding achievements of our distribution partners and employee-owners.

Thank you to our policyowners for choosing North American, a member of Sammons Financial Group, Inc.* We have an obligation to earn the trust of all of our policyowners who depend on us for their financial security. This obligation motivates us in our day-to-day work and promotes the long-term stability of our company.

As a provider of financial stability, we also attach great importance to helping those in need, both in our local communities and those around the world. Our compassionate culture is shaped by our company values—integrity, respect, openness, and accountability. And these values guide us to provide outstanding service and to go above and beyond to honor our commitments.

Whether you’re a policyowner, a distribution partner or a person considering North American for your financial protection needs, your continued confidence and trust remain our highest priority. We never forget that ultimately we’re here for you.

At North American we’re continuing on a journey that began in 1886. Join us on our journey—with your trust and your commitment.

History

Founded in 1886, North American has stood strong to help protect those who count on us for financial security. Through two world wars, the Great Depression, and multiple recessions, North American’s private ownership and focus on the long term has instilled trust and confidence in those that depend on us. North American has over $11.7 billion in assets.

1886 – Founded as North American Accident Association

1890 – A.E. Forest purchased the company for $2,000 and appointed the company’s first general agent

1918 – North American became the first company to offer a disability insurance policy for women

1981 – Actively enters the brokerage marketplace

1982 – North American introduces its first universal life product

1999 – Sammons Annuity Group, North American’s Annuity Service Center, founded

2001 – Achieves $100 billion of life insurance in-force

2011 – North American celebrates its 125th anniversary

Esfand Dinshaw Chief Executive Officer Sammons Financial Group

Steve Palmitier President & Chief Operating Officer North American Company

2011 ANNUAL REPORT

525 W Van BurenChicago IL 60607

www.nacolah.com

Annuity Service CenterPO BOX 79905Des Moines IA 50323

www.nacannuity.com

PR-1291 R4 4/12 PR-1291 R4 4/12 PR-1291 R4 4/12

* Sammons Financial Group is comprised of North American Company for Life and Health Insurance, Midland National Life Insurance Company, including its divisions, Sammons Annuity Group and Sammons Corporate Market Group, Sammons Securities Company®, LLC., Sammons Retirement Solutions, Inc.SM and Sammons Financial Network, LLCSM.

A+ (Superior) A.M. Best A.M. Best is a large third party independent reporting and rating company that rates an insurance company on the basis of the company's financial strength, operating performance, and ability to meet its obligations to policyholders.

A+ is the second highest rating out of 15 categories and was affirmed for North American Company for Life and Health Insurance as part of Sammons Financial Group on May 26, 2011. For the latest rating, access www.ambest.com.

A+ (Strong) Rating Standard & Poor's Standard and Poor's awarded its "A+" (Strong) rating for insurer financial strength on February 26, 2009 and affirmed on April 6, 2011 to North American Company for Life and Health Insurance as part of Sammons Financial Group.

The "A+" (Strong) rating is the fifth highest out of 22 available ratings.

A Message to You

North American Company finished 2011 on a very affirmative note, aligning with our history of continued financial stability. Our foundation is strong. The basis of this strength is our focus on long-term, sustained growth, along with the outstanding achievements of our distribution partners and employee-owners.

Thank you to our policyowners for choosing North American, a member of Sammons Financial Group, Inc.* We have an obligation to earn the trust of all of our policyowners who depend on us for their financial security. This obligation motivates us in our day-to-day work and promotes the long-term stability of our company.

As a provider of financial stability, we also attach great importance to helping those in need, both in our local communities and those around the world. Our compassionate culture is shaped by our company values—integrity, respect, openness, and accountability. And these values guide us to provide outstanding service and to go above and beyond to honor our commitments.

Whether you’re a policyowner, a distribution partner or a person considering North American for your financial protection needs, your continued confidence and trust remain our highest priority. We never forget that ultimately we’re here for you.

At North American we’re continuing on a journey that began in 1886. Join us on our journey—with your trust and your commitment.

History

Founded in 1886, North American has stood strong to help protect those who count on us for financial security. Through two world wars, the Great Depression, and multiple recessions, North American’s private ownership and focus on the long term has instilled trust and confidence in those that depend on us. North American has over $11.7 billion in assets.

1886 – Founded as North American Accident Association

1890 – A.E. Forest purchased the company for $2,000 and appointed the company’s first general agent

1918 – North American became the first company to offer a disability insurance policy for women

1981 – Actively enters the brokerage marketplace

1982 – North American introduces its first universal life product

1999 – Sammons Annuity Group, North American’s Annuity Service Center, founded

2001 – Achieves $100 billion of life insurance in-force

2011 – North American celebrates its 125th anniversary

Esfand Dinshaw Chief Executive Officer Sammons Financial Group

Steve Palmitier President & Chief Operating Officer North American Company

2011 ANNUAL REPORT

525 W Van BurenChicago IL 60607

www.nacolah.com

Annuity Service CenterPO BOX 79905Des Moines IA 50323

www.nacannuity.com

PR-1291 R4 4/12 PR-1291 R4 4/12 PR-1291 R4 4/12

* Sammons Financial Group is comprised of North American Company for Life and Health Insurance, Midland National Life Insurance Company, including its divisions, Sammons Annuity Group and Sammons Corporate Market Group, Sammons Securities Company®, LLC., Sammons Retirement Solutions, Inc.SM and Sammons Financial Network, LLCSM.

Strength

North American’s asset quality is excellent. Overall net investment income provides ample margins to cover contractual obligations to all policyowners.

• Bonds consist of US Government, government agency, and corporate securities.

• Stocks consist primarily of public utilities, adjustable rate preferred, and other publicly related securities.

• Short-term investments consist of commercial paper, money market funds, and other high-quality, short-maturity investments.

BONDS BY NAIC QUALITY RATING

94% Investment Grade

74% NAIC Class 1 20% NAIC Class2 6% Non-Investment Grade

92.9% Bonds 4.2% Other Investments 1.2% Stocks 0.7% Policy Loans

0.8% Cash & Short Term Investments

0.2% Mortgage Loans & Real Estate

INVESTMENTS BY TYPE3

Stability

As part of a privately-held company, we are not subject to the short-term earnings pressures that publicly-held companies face. We are a company with plans to perpetuate itself for hundreds of years, not the next quarter or fiscal year. We focus on the long term. We focus on you.

Ownership

North American offers something that is unique in the insurance industry: private ownership with employee-owners.1 This kind of ownership creates an atmosphere where personal, efficient service is the priority.

Our employee-owner core values:

• Openness

• Accountability

• Respect

• Integrity

North American is part of Sammons Financial Group, Inc. (SFG), whose member companies offer a diverse portfolio of investment services, including life insurance, annuities, and securities.

SFG’s parent company, Sammons Enterprises, Inc., is a multi-faceted, global holding corporation that owns and operates businesses across a diverse range of industries, including:

• Briggs International

• The Grove Park Inn Resort and Spa

• Sammons Equity Alliance

• Sammons Financial Group — which includes North American

Headquartered in Dallas, Texas with assets of approximately $50 billion, Sammons Enterprises ranks among the largest privately-held companies in the United States.2

1. “Employees” of the member companies of SFG and Sammons Enterprises do not include independent insurance producers or managing general agents appointed with or affiliated with North American Company for Life and Health Insurance.

2. Ranked number 121 on Forbes’ 2011 List of America’s Largest Private Companies. The list included 212 closely held corporations that had sales of more than $2 billion.

Balance Sheet4

AssetsAs of December 31, 2011 (In thousands)Bonds .......................................................................................$10,672,342Stocks ..............................................................................................132,296Cash & Short-Term Investments .......................................................93,731Mortgage Loans & Real Estate .........................................................25,000Loans to Policyholders ......................................................................82,715Other Invested Assets ......................................................................477,846Cash and Invested Assets .............................................. 11,483,930Accrued Investment Income ..............................................................99,810All Other Assets ...............................................................................145,184Total Assets ............................................................... $11,728,924

Liabilities and CapitalAs of December 31, 2011 (In thousands)Life and Annuity Reserves ..........................................................$9,597,726Interest Maintenance Reserve (IMR) ................................................80,411Asset Valuation Reserve (AVR) ..........................................................65,081Repurchase Agreements & Other Borrowings .................................981,812Other Liabilities ...............................................................................161,029 Total Liabilities ............................................................ 10,886,059 Capital and Surplus .........................................................................842,865Total Liabilities, Capital and Surplus ........................... $11,728,924

3. Stated as a percent of total invested assets.

4. Information presented is on a Statutory Accounting basis.

PR-1291 R4 4/12

Strength

North American’s asset quality is excellent. Overall net investment income provides ample margins to cover contractual obligations to all policyowners.

• Bonds consist of US Government, government agency, and corporate securities.

• Stocks consist primarily of public utilities, adjustable rate preferred, and other publicly related securities.

• Short-term investments consist of commercial paper, money market funds, and other high-quality, short-maturity investments.

BONDS BY NAIC QUALITY RATING

94% Investment Grade

74% NAIC Class 1 20% NAIC Class2 6% Non-Investment Grade

92.9% Bonds 4.2% Other Investments 1.2% Stocks 0.7% Policy Loans

0.8% Cash & Short Term Investments

0.2% Mortgage Loans & Real Estate

INVESTMENTS BY TYPE3

Stability

As part of a privately-held company, we are not subject to the short-term earnings pressures that publicly-held companies face. We are a company with plans to perpetuate itself for hundreds of years, not the next quarter or fiscal year. We focus on the long term. We focus on you.

Ownership

North American offers something that is unique in the insurance industry: private ownership with employee-owners.1 This kind of ownership creates an atmosphere where personal, efficient service is the priority.

Our employee-owner core values:

• Openness

• Accountability

• Respect

• Integrity

North American is part of Sammons Financial Group, Inc. (SFG), whose member companies offer a diverse portfolio of investment services, including life insurance, annuities, and securities.

SFG’s parent company, Sammons Enterprises, Inc., is a multi-faceted, global holding corporation that owns and operates businesses across a diverse range of industries, including:

• Briggs International

• The Grove Park Inn Resort and Spa

• Sammons Equity Alliance

• Sammons Financial Group — which includes North American

Headquartered in Dallas, Texas with assets of approximately $50 billion, Sammons Enterprises ranks among the largest privately-held companies in the United States.2

1. “Employees” of the member companies of SFG and Sammons Enterprises do not include independent insurance producers or managing general agents appointed with or affiliated with North American Company for Life and Health Insurance.

2. Ranked number 121 on Forbes’ 2011 List of America’s Largest Private Companies. The list included 212 closely held corporations that had sales of more than $2 billion.

Balance Sheet4

AssetsAs of December 31, 2011 (In thousands)Bonds .......................................................................................$10,672,342Stocks ..............................................................................................132,296Cash & Short-Term Investments .......................................................93,731Mortgage Loans & Real Estate .........................................................25,000Loans to Policyholders ......................................................................82,715Other Invested Assets ......................................................................477,846Cash and Invested Assets .............................................. 11,483,930Accrued Investment Income ..............................................................99,810All Other Assets ...............................................................................145,184Total Assets ............................................................... $11,728,924

Liabilities and CapitalAs of December 31, 2011 (In thousands)Life and Annuity Reserves ..........................................................$9,597,726Interest Maintenance Reserve (IMR) ................................................80,411Asset Valuation Reserve (AVR) ..........................................................65,081Repurchase Agreements & Other Borrowings .................................981,812Other Liabilities ...............................................................................161,029 Total Liabilities ............................................................ 10,886,059 Capital and Surplus .........................................................................842,865Total Liabilities, Capital and Surplus ........................... $11,728,924

3. Stated as a percent of total invested assets.

4. Information presented is on a Statutory Accounting basis.

PR-1291 R4 4/12

A+ (Superior) A.M. Best A.M. Best is a large third party independent reporting and rating company that rates an insurance company on the basis of the company's financial strength, operating performance, and ability to meet its obligations to policyholders.

A+ is the second highest rating out of 15 categories and was affirmed for North American Company for Life and Health Insurance as part of Sammons Financial Group on May 26, 2011. For the latest rating, access www.ambest.com.

A+ (Strong) Rating Standard & Poor's Standard and Poor's awarded its "A+" (Strong) rating for insurer financial strength on February 26, 2009 and affirmed on April 6, 2011 to North American Company for Life and Health Insurance as part of Sammons Financial Group.

The "A+" (Strong) rating is the fifth highest out of 22 available ratings.

A Message to You

North American Company finished 2011 on a very affirmative note, aligning with our history of continued financial stability. Our foundation is strong. The basis of this strength is our focus on long-term, sustained growth, along with the outstanding achievements of our distribution partners and employee-owners.

Thank you to our policyowners for choosing North American, a member of Sammons Financial Group, Inc.* We have an obligation to earn the trust of all of our policyowners who depend on us for their financial security. This obligation motivates us in our day-to-day work and promotes the long-term stability of our company.

As a provider of financial stability, we also attach great importance to helping those in need, both in our local communities and those around the world. Our compassionate culture is shaped by our company values—integrity, respect, openness, and accountability. And these values guide us to provide outstanding service and to go above and beyond to honor our commitments.

Whether you’re a policyowner, a distribution partner or a person considering North American for your financial protection needs, your continued confidence and trust remain our highest priority. We never forget that ultimately we’re here for you.

At North American we’re continuing on a journey that began in 1886. Join us on our journey—with your trust and your commitment.

History

Founded in 1886, North American has stood strong to help protect those who count on us for financial security. Through two world wars, the Great Depression, and multiple recessions, North American’s private ownership and focus on the long term has instilled trust and confidence in those that depend on us. North American has over $11.7 billion in assets.

1886 – Founded as North American Accident Association

1890 – A.E. Forest purchased the company for $2,000 and appointed the company’s first general agent

1918 – North American became the first company to offer a disability insurance policy for women

1981 – Actively enters the brokerage marketplace

1982 – North American introduces its first universal life product

1999 – Sammons Annuity Group, North American’s Annuity Service Center, founded

2001 – Achieves $100 billion of life insurance in-force

2011 – North American celebrates its 125th anniversary

Esfand Dinshaw Chief Executive Officer Sammons Financial Group

Steve Palmitier President & Chief Operating Officer North American Company

2011 ANNUAL REPORT

525 W Van BurenChicago IL 60607

www.nacolah.com

Annuity Service CenterPO BOX 79905Des Moines IA 50323

www.nacannuity.com

PR-1291 R4 4/12 PR-1291 R4 4/12 PR-1291 R4 4/12

* Sammons Financial Group is comprised of North American Company for Life and Health Insurance, Midland National Life Insurance Company, including its divisions, Sammons Annuity Group and Sammons Corporate Market Group, Sammons Securities Company®, LLC., Sammons Retirement Solutions, Inc.SM and Sammons Financial Network, LLCSM.