Inherited Estate

Prudential PLC
28 November 2007



08.31am, Wednesday 28 November 2007



Update on possible Reattribution of the Inherited Estate of the Prudential
With-ProfitS Sub-Fund


In March 2007, Prudential plc (Prudential) announced it was considering a
reattribution of the inherited estate held in the With-Profits Sub-Fund (WPSF)
of The Prudential Assurance Company Limited (PAC) if it was in the best
interests of policyholders and shareholders. Prudential continues to explore the
possibility of a reattribution.

No decision has yet been taken to proceed with reattribution and policyholders
need take no action at this stage.

Nick Prettejohn, Prudential UK CEO, said: 'This is an extremely complex process.
We are providing Peter Bloxham, the nominated Policyholder Advocate (PHA), with
detailed briefings regarding both the life fund and inherited estate and we are
also discussing our progress with the FSA.

'We aim to be in a position to determine whether reattribution is in the best
interests of policyholders and shareholders in the first half of 2008.'

Since March, Mr Bloxham has established his own independent office and engaged
legal and actuarial advisers to assist him with his due diligence. His main task
of reviewing and analysing Prudential's with-profits business is underway, with
a programme of regular meetings with both Prudential and with the FSA. The PHA's
office is also preparing plans for consulting with policyholders should the
reattribution proceed.

Peter Bloxham said: 'I am pleased to report that we have made progress and I am
confident that if Prudential does proceed to appointment we will be ready to
move quickly to the consultation stage.'


ENDS



Enquiries:


Media                                          Investors/Analysts
Jon Bunn                  [phone]     James Matthews   [phone]
William Baldwin-Charles   [phone]



Notes to Editors:


1.  Policyholders with questions on the reattribution proposals can call
    Prudential's dedicated Reattribution Service Centre on 0845 300 2641, 
    8am - 6pm Monday to Friday. Alternatively policyholders can write to 
    Prudential, Stirling, FK9 4UE. More information on the proposed 
    reattribution process can be found at www.pru.co.uk/reattribution

2.  The Policyholder Advocate has established a website at
    www.prupolicyholdersadvocate.com


3.  Eligibility

In order to protect the interests of existing policyholders of Prudential's
With-Profits Sub-Fund should reattribution proceed, the Eligibility Date has
been set at the close of business on 14 March 2007, the day before we announced
our intention to explore the possibility of a reattribution of the inherited
estate.

To be eligible to benefit from this possible reattribution, policyholders must:

(i)   have held an eligible policy in the With-Profits Sub-Fund as
      at the Eligibility Date;

(ii)  and continue to hold that policy at the effective date of the
      reattribution.

New with-profits policies taken out after 14 March 2007 will not carry any
interest in any possible future distribution of the inherited estate in the
With-Profits Sub-Fund and therefore will not qualify for any payment from this
potential reattribution of the inherited estate, should it occur.

Further details on eligibility can be found on Prudential's UK website at 
http://www.pru.co.uk/existing_customers/wp_subfund/



1.   About the Inherited Estate and reattribution

The inherited estate - or 'estate' as it is often called - is money that has
built up in the With-Profits Sub-Fund over many years from a number of sources,
including contributions from shareholders. It is essentially an amount of money
in excess of the amount we expect to pay out to existing policyholders. It is
available to support current and future business by providing the benefits
associated with smoothing and guarantees, permitting investment flexibility for
the fund's assets and maintaining the solvency of the fund. Reattribution of the
inherited estate benefits policyholders in the With-Profits Sub-Fund in the
short term, by way of a payment, in return for giving up the possibility of
sharing in any potential future distribution from the estate. Reattribution will
occur only if it is in the interests of policyholders and shareholders.


2.   FSA Guidelines on Reattribution

The FSA's Conduct of Business Rules include rules and guidance on the process
which a regulated firm, such as Prudential, should adopt if it is seeking to
reattribute an inherited estate. They can be found in full in COB 20.2.39 to
COB20.2.52. Under these rules, a firm must nominate, then appoint an independent
Policyholder Advocate. After his appointment, the policyholder advocate should
consult with policyholders in order that he can adequately represent them in
negotiations with the firm on the details of the proposed reattribution scheme.
Following the conclusions of the negotiations, the PHA should write a report on
the negotiations which the firm should send to policyholders with the proposed
reattribution scheme. By their nature, these activities need to be sequential
and are likely to stretch over a period of time.


3.   Peter Bloxham

Peter Bloxham retired as a partner in the international law firm, Freshfields
Bruckhaus Deringer in October 2006. Peter founded the Restructuring & Insolvency
practice at the firm in the mid-1990s, and headed it until 2005. His work
involved complex investigations and negotiations with very large organisations.

He qualified as a solicitor in 1977, joined Freshfields in the same year and
became a partner in 1983.

Peter worked on many high profile cases, including BCCI, Barings, British
Energy, Boo.com, Enron and Eurotunnel. He was a regular adviser to Lloyd's of
London, including major involvement in the formulation and implementation of the
Reconstruction and Renewal proposals.

Peter's clients included the Bank of England, the Royal Bank of Scotland and UBS
and he has advised the Financial Services Compensation Scheme.



About Prudential

Prudential plc is a company incorporated and with its principal place of
business in England, and its affiliated companies constitute one of the world's
leading financial services groups. It provides insurance and financial services
directly and through its subsidiaries and affiliates throughout the world. It
has been in existence for over 150 years and has £256 billion in assets under
management as at 30 June 2007.  Prudential plc is not affiliated in any manner
with Prudential Financial, Inc, a company whose principal place of business is
in the United States of America.



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