UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

Provident Companies, Inc., a corporation, and
UNUM Corporation, a corporation.

File No. 991-0101

AGREEMENT CONTAINING CONSENT ORDER

The Federal Trade Commission ("Commission"), having initiated an investigation of the merger between Provident Companies, Inc. ("Provident") and UNUM Corporation ("UNUM"), and it now appearing that Provident and UNUM, hereinafter sometimes referred to as "proposed respondents," are willing to enter into an Agreement Containing Consent Order to submit data, and providing for other relief:

IT IS HEREBY AGREED by and between proposed respondents, by their duly authorized officers and attorneys, and counsel for the Commission that:

1. Proposed respondent Provident is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware with its office and principal place of business located at 1 Fountain Square, Chattanooga, Tennessee 37402.
 
2. Proposed respondent UNUM is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware with its office and principal place of business located at 2211 Congress Street, Portland, Maine 04122.
 
3. Proposed respondents admit all the jurisdictional facts set forth in the draft of Complaint here attached.
 
4. Proposed respondents waive:
 
a. any further procedural steps;
 
b. the requirement that the Commission's decision contain a statement of findings of fact and conclusions of law;
 
c. all rights to seek judicial review or otherwise to challenge or contest the validity of the Order entered pursuant to this Agreement; and
 
d. any claim under the Equal Access to Justice Act.
 
5. This Agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission. If this Agreement is accepted by the Commission it, together with the draft of Complaint contemplated thereby, will be placed on the public record for a period of sixty (60) days and information in respect thereto publicly released. The Commission thereafter may either withdraw its acceptance of this Agreement and so notify the proposed respondents, in which event it will take such action as it may consider appropriate, or issue and serve its Complaint (in such form as the circumstances may require) and decision, in disposition of the proceeding.
 
6. Proposed respondents shall submit, within thirty (30) days of the date this Agreement is signed by proposed respondents, an initial report, pursuant to Section 2.33 of the Commission's Rules, signed by the proposed respondents setting forth in detail the manner in which the proposed respondents are complying with Paragraph II of the Order, including the text of any agreement or condition associated with the use of the Data, as that term is defined in Paragraph I(L). Such report will not become a part of the public record unless and until the accompanying Agreement and Order are accepted by the Commission for public comment.
 
7. This Agreement is for settlement purposes only and does not constitute an admission by proposed respondents that the law has been violated as alleged in the draft of Complaint here attached, or that the facts as alleged in the draft Complaint, other than jurisdictional facts, are true.
 
8. This Agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of Section 2.34 of the Commission's Rules, the Commission may, without further notice to the proposed respondents, (1) issue its complaint corresponding in form and substance with the draft of Complaint here attached and its decision containing the following Order to submit data in disposition of the proceeding and (2) make information public with respect thereto. When so entered, the Order shall have the same force and effect and may be altered, modified, or set aside in the same manner and within the same time provided by statute for other orders. The Order shall become final upon service. Delivery by the U.S. Postal Service of the Complaint and decision containing the agreed-to Order to proposed respondents' addresses as stated in this Agreement shall constitute service. Proposed respondents waive any right they may have to any other manner of service. The Complaint may be used in construing the terms of the Order, and no agreement, understanding, representation, or interpretation not contained in the Order or the Agreement may be used to vary or contradict the terms of the Order.
 
9. By signing this Agreement Containing Consent Order, proposed respondents represent that the full relief contemplated by this Agreement can be accomplished.
 
10. Proposed respondents have read the proposed Complaint and Order contemplated hereby. Proposed respondents understand that once the Order has been issued, they will be required to file one or more compliance reports showing that they have fully complied with the Order. Proposed respondents agree to comply with Paragraph II of the proposed Order from the date they sign this Agreement. Proposed respondents further understand that they may be liable for civil penalties in the amount provided by law for each violation of the Order after it becomes final.

ORDER

I.

IT IS ORDERED that, as used in this Order, the following definitions shall apply:

A. "Provident" means Provident Companies, Inc., its directors, officers, employees, agents and representatives, predecessors, successors, and assigns; its subsidiaries, divisions, groups and affiliates controlled by Provident, and the respective directors, officers, employees, agents, and representatives, successors, and assigns of each.
 
B. "UNUM" means UNUM Corporation, its directors, officers, employees, agents and representatives, predecessors, successors, and assigns; its subsidiaries, divisions, groups and affiliates controlled by UNUM, and the respective directors, officers, employees, agents, and representatives, successors, and assigns of each.
 
C. "Merger" means the combination of UNUM and Provident pursuant to the Agreement and Plan of Merger dated November 22, 1998.
 
D. "UNUMProvident" means the entity resulting from the Merger.
 
E. "Respondents" means UNUM and Provident.
 
F. "Commission" means the Federal Trade Commission.
 
G. "NAIC" means the National Association of Insurance Commissioners.
 
H. "Designee" means any independent entity that has been requested specifically by the NAIC to prepare industry-wide actuarial tables for Individual Disability Insurance, or actuarial studies or actuarial reports that relate to creating or supplementing industry-wide actuarial tables for Individual Disability Insurance.
 
I. "Individual Disability Insurance" means insurance to protect against loss of income due to disability arising from sickness, accident or injury (but not including "accident only" insurance, which insures only losses arising from accidents), individually underwritten and sold to individuals as the policyholders of the insurance, as distinguished from group disability insurance provided to members of a group by an employer or other organization.
 
J. "Incidence Rate" means the rate at which people become disabled as defined in Individual Disability Insurance policies.
K. "Claims Termination Rate" means the rate at which Individual Disability Insurance claims terminate.
 
L. "Data" means all data relating to Individual Disability Insurance Incidence Rates and Claims Termination Rates with respect to policyholders in the United States of the type and in the form as requested from time to time by the Society of Actuaries, the NAIC, or its Designee.
 
M. "Request" means any industry-wide solicitation of Data by the Society of Actuaries, the NAIC, or its Designee from providers of Individual Disability Insurance to be used in the preparation of industry-wide actuarial tables for Individual Disability Insurance, or actuarial studies or actuarial reports that relate to creating or supplementing industry-wide actuarial tables for Individual Disability Insurance.
 
N. "Aggregated Data" means Data provided in response to each specification in each Request by providers of Individual Disability Insurance that has been aggregated.
 
O. "Disaggregated Data" means Data from one (1) provider of Individual Disability Insurance.

II.

IT IS FURTHER ORDERED that:

In response to each Request by the Society of Actuaries, the NAIC, or its Designee, Respondents shall submit Data specified in the Request in the format and within the time period requested of Respondents and other Individual Disability Insurance providers, or within six (6) months of the date the Request is made, whichever is earlier, unless the time period is extended in writing by the requesting entity or by the entity that will receive Data pursuant to any Request; provided, however, that Respondents may limit the use of their Data as follows:

A. Respondents may require that the Society of Actuaries, the NAIC, or its Designee use Disaggregated Data solely for the purpose of creating Aggregated Data;
 
B. Respondents may require a commitment from the Society of Actuaries, the NAIC, or its Designee, whichever will receive Data pursuant to any Request, that their Disaggregated Data will not be viewed at any time by (1) any employee of any firm providing Individual Disability Insurance, or (2) actuarial consultants who provide actuarial consulting services to Individual Disability Insurance firms; provided, however, that for each submission of Disaggregated Data in response to a Request, an individual who provides actuarial consulting services to Individual Disability Insurance firms may view the Disaggregated Data, subject to the prior written consent of Respondents, who may require such individual to agree in writing to preserve the confidentiality of Disaggregated Data.; provided further, however, that if Respondents have not opposed such disclosure, in writing, within ten (10) days after written notice has been provided by the Society of Actuaries, the NAIC, or its Designee, Respondents shall be deemed to have consented to such disclosure;
 
C. Respondents may require that the Society of Actuaries, the NAIC, or its Designee use Aggregated Data solely for the purpose of creating and disseminating industry-wide actuarial tables for Individual Disability Insurance, or actuarial studies or actuarial reports that relate to creating or supplementing industry-wide actuarial tables for Individual Disability Insurance; and
 
D. Before Aggregated Data is used to create and disseminate industry-wide actuarial tables for Individual Disability Insurance, or actuarial studies or actuarial reports that relate to creating or supplementing industry-wide actuarial tables for Individual Disability Insurance, Respondents may require that the Society of Actuaries, the NAIC, or its Designee, whichever will receive the Data pursuant to any Request, certify in writing that:
 
1. Aggregated Data includes responses to the Request, for each specification in each Request, from at least three (3) other providers of Individual Disability Insurance that are among the ten (10) largest providers of Individual Disability Insurance in the industry as measured by direct earned premium; and
 
2. If the Disaggregated Data submitted by Respondents represents 60% or more of all industry data submitted for any particular specification in the Request, Respondents may require the Society of Actuaries, the NAIC, or its Designee to weight the Disaggregated Data submitted by Respondents for that particular specification in accordance with generally accepted experience study practices, so that, when weighted, Respondents' Disaggregated Data represents no more than 50% of the Aggregated Data.
 
III.

IT IS FURTHER ORDERED that within ninety (90) days after the date this Order becomes final and within ninety (90) days after Requests have been made by the Society of Actuaries, the NAIC, or its Designee, and once annually, Respondents shall submit to the Commission a verified written report setting forth in detail the manner and form in which they intend to comply, are complying, and have complied with Paragraph II of this Order. Respondents shall include in their compliance reports, among other things that are required from time to time, a full description of the efforts being made to comply with Paragraph II of the Order, including a description of all substantive contacts or negotiations to submit Data and the identity of all individuals participating in such negotiations. Respondents shall include in their compliance reports copies of all written communications to and from such parties, all internal memoranda, and all reports and recommendations concerning the submitting of the Data.

IV.

IT IS FURTHER ORDERED that Respondents shall notify the Commission at least thirty (30) days prior to any proposed change in the corporate Respondents, such as dissolution, assignment, sale resulting in the emergence of a successor corporation, or the creation or dissolution of subsidiaries or any other change in the corporation, that may affect compliance obligations arising out of the Order.

V.

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this Order, upon written request, Respondents shall permit any duly authorized representative of the Commission:

A. Access, during office hours and in the presence of counsel, to inspect and copy all books, ledgers, accounts, correspondence, memoranda and other records and documents in the possession or under the control of Respondents relating to any matters contained in this Order; and
 
B. Upon five days' notice to Respondents and without restraint or interference from them, to interview officers, directors, or employees of Respondents, who may have counsel present, regarding any such matters.

VI.

IT IS FURTHER ORDERED that Respondents shall not be obligated to comply with this Order if the Merger is abandoned. For purposes of this Order, UNUM and Provident will be deemed to have abandoned the proposed Merger after they provide written notice to the Commission that they have abandoned the proposed Merger and have withdrawn any related notifications filed pursuant to Section 7A of the Clayton Act, as amended, 15 U.S.C. 18a.

VII.

IT IS FURTHER ORDERED that this Order shall terminate on ____ [the date twenty (20) years from the date this Order is issued, to be filled in by Secretary's office].

Signed this _____ day of _______________, 1999.

PROVIDENT COMPANIES, INC., A CORPORATION

By: ________________________
J. Harold Chandler
President and Chief Executive
Officer
________________________
Dean Copeland
Counsel for Provident
Companies, Inc.

UNUM CORPORATION, A CORPORATION

By: ________________________
James F. Orr III
Chief Executive Officer
________________________
Kevin J. Tierney
Counsel for UNUM Corporation

FEDERAL TRADE COMMISSION

By: ________________________
Jacqueline K. Mendel
Attorney
Bureau of Competition

Approved:

_______________________
Ann Malester
Assistant Director
Bureau of Competition

_______________________
Richard G. Parker
Senior Deputy Director
Bureau of Competition
_______________________
William J. Baer
Director
Bureau of Competition